Caselaw

Civil Case (Petah Tikva) 38258-01-25 D. Niv Construction and Development Ltd. v. Habonim A.M. - part 6

January 21, 2026
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(1) It is found that the arbitrator is not worthy of the trust of the parties;"

 

  1. Instruction Section 11(1) The Arbitration Law is a derivative of the Fixed Provision In section 30 to the Arbitration Law, according to which an arbitrator appointed by the parties is obligated to act faithfully towards them:

"An arbitrator who has agreed to his appointment must act faithfully towards the parties; Above the arbitrator in the trust placed in him, the injured party is entitled, in addition to any remedy under this law, to compensation given due to breach of contract."

 

  1. In accordance with case law, the test for the disqualification of an arbitrator is the same as the test for the disqualification of a judge. This is an objective test of whether the arbitrator is no longer worthy of the parties' trust, and the subjective feeling of either party is not sufficient to say that the arbitrator is no longer worthy of their trust.  It was also ruled that the court will use its authority to remove an arbitrator from his position only in exceptional cases reserved for extreme circumstances, in which it has been proven that there are real circumstances that raise a concern of bias.  (Civil Appeal Authority 296/08 Art B Limited Guarantee Company (in liquidation) vs.  Estate of the late Jack Lieberman z"l (Nevo, December 5, 2010) as follows: "The Art B Thing"); Civil Case (Tel Aviv) 31724-01-22 Alfred Schechter v.  Members of the United Sarona-B.S.R.  Sarona Purchasing Group (Nevo 24.2.2022) and the references therein, (hereinafter: "The Schechter case").
  2. In the Civil Appeal Authority 6412/18 Rabbi Eliezer Kahneman v. Rabbi Shmuel Markovitz (Nevo November 18, 2018), held:

"A request to remove an arbitrator from his position is examined according to the criteria set forth in the matter of disqualification of a judge...  Even if a judge fails in his language towards one of the litigants, this does not lead to his disqualification except in exceptional cases, in which the statement shows that he formulated his position in a manner that negates the reasonable possibility of conducting the trial objectively and raises concerns about the existence of bias." (Hereinafter: "The Rabbi Kahneman Case").

  1. In the judgment "In the matter of Art B", the court was asked the question, what are the criteria for disqualifying an arbitrator and what is the relationship between them and the tests for disqualifying a judge. In the framework of the discussion of this question, the court is required to meet the criteria when the arbitrator chosen by the parties is not a professional judge, with all that this entails:

"Indeed, one who is not a professional judge must be very careful about the integrity of his character.  However, it can also be argued to the contrary, namely that the fact that the parties chose an arbitrator who is not a jurist should lead to the conclusion that the standards required of an arbitrator are supposed to be lenient than those required of judges, since he is not knowledgeable in the law regarding disqualification tests and the standards required of judges, for example, and the parties to arbitration who chose an arbitrator who is not a jurist were aware of this when they appointed him to the position".  (paragraph 113 of the judgment).

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