The Limits of Judicial Discretion: Emotive Dispositions of Israeli Courts in Implementing the New York Convention

Abstract

Impelled by the massive growth of cross-border trade and the need to avoid costly and unpredictable judicial proceedings in the resolution of international business disputes, the business community has evinced a growing preference for arbitration as a method for resolving international business disputes. The nearly universally ratified New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides a uniform regime for the enforcement of international arbitration agreements and awards by national courts. By seeking to provide for uniform conduct by national courts in the enforcement of international arbitration agreements, the Convention directs national courts seized of an action governed by an arbitration agreement to refer parties to arbitration, except under limited specified circumstances.

There is a common perception that the New York Convention's regime of mandatory referral of disputes to arbitration has been widely recognized by courts of signatory states as a uniform rule. This article challenges this perception by focusing on a salient example of a country that falls short of the expected normative practice. By meticulously analyzing the Israeli courts' varied approaches towards mandatory referral of agreements governed by the New York Convention, the article concludes that these courts' "emotive disposition" creates a gap between the intent of the Convention to standardize judicial behavior and its implementation by national courts.

The article stresses the role of national courts in implementing the Convention uniformly and in supporting its regime and advises the Israeli courts to follow treaty objectives to promote international arbitration in order to provide predictability in the resolution of disputes to the international business community.

Keywords: International Arbitration, New York Convention, Enforcement of Arbitration Agreements