© 2025 Eric S. Sherby
The fifth annual Tel Aviv Arbitration Week took place in late October, and the organizers should be saluted for having put together a quality networking event, featuring top-notch speakers.
At any such conference, it is common for the different speakers to address various sub-issues within the field of international dispute resolution. Yet one issue that was raised repeatedly during the October conference was the aspiration to make Israel a “hub” in the field of international arbitration.
What precisely does “international arbitration hub” mean?
The common use of the term “international arbitration hub” means not merely that arbitration is the method of dispute resolution used regularly by local companies, at home, to resolve their international disputes. Rather, the term “international arbitration hub” means that parties from outside the particular country choose to have their disputes resolved in that country through arbitration – because that country is considered sufficiently neutral and qualified in the field of arbitration.
The aspiration of Israel’s becoming an international arbitration hub is shared by virtually all alternative dispute resolution professionals in Israel (including me).
An aspiration is obviously different from an expectation. Yet to listen to some of the speakers at the Tel Aviv Arbitration Week conference, one might have gotten the impression that there is no difference between the two. More so than at other Israeli conference in recent years in the field of international alternative dispute resolution, at the recent conference, numerous speakers gave the impression that “all that needs to happen” for Israel to become a hub for international arbitration would be for all those assembled at the conference to conclude that such a goal is their priority.
The display of good intentions for Israel to become a hub for international arbitration was evident – but is it realistic?
In this post, we address the main reason that the idea of Israel’s becoming an international arbitration hub is, objectively, unrealistic in the short term – that reason is the effect of Israel’s security situation on air transportation.
Even though multiple speakers at the recent conference expressed the view that Israel has the potential, soon, to become a hub for international arbitration, not a single speaker made any mention of the fact that, during the October 7 war, international air traffic in Israel came to a virtual standstill.
Even before October 7, 2023, the issue of international air travel became a “uniquely Israeli” concern. As far back as July 2014, during Operation Protective Edge, a rocket fired by terrorists from Gaza landed about a mile from Ben-Gurion Airport. Although the Israeli government urged calm, the American Federal Aviation Administration was quick to react, issuing a “Notice to Airmen.” That Notice essentially instructed the American aviation industry that, due to the “potentially hazardous situation created by the armed conflict in Israel and Gaza,” all flight operations into and out of Ben Gurion were prohibited until further notice. That stoppage lasted less than two days, but the precedent was set – rocket attacks near Tel Aviv meant that non-Israeli air carriers would cease service to and from Ben Gurion.
Fast-forward to 2023. Almost immediately after the October 7 war began, the vast majority of non-Israeli airlines that had been providing service to and from Tel Aviv announced that they were suspending such service. Some expressly stated that the suspensions would be “until further notice.”
It was not “just a couple of the foreign airlines” – the non-Israeli airlines that halted service to and from Tel Aviv included British Airways, Lufthansa, Turkish Airlines, American Airlines, Air Canada, Delta, Air France, Air India, Hainan Airlines, and Aeroflot. In other words, the major air carriers from North America, Western Europe, Central Europe, Eastern Europe, India, and China cancelled or suspended service to Israel.
In Israel, we lived with this new air travel reality for almost two years.
It is hard to believe that those speakers at the recent conference who expressed the belief that Israel could, soon, become a “hub” for international arbitration had forgotten the fact that the outbreak of hostilities brought about an almost immediate reduction of air travel to and from Israel.
Almost by definition, international arbitration involves air travel. Indeed, the fifth Tel Aviv Arbitration Week itself was put off in large part because of the concern that non-Israeli participants might not want to fly to Israel because of the war in Gaza.
Equally important is that arbitration is a creature of contract, and all ADR professionals recognize that the likelihood of agreeing on arbitration after a dispute has arisen is far lower than agreeing pre-dispute. A corollary of the above is that, in order for an arbitration clause to be included in an international agreement, the business people – on both sides – need to be comfortable with the idea that any future dispute could be resolved via arbitration in the selected country.
Now let’s apply the “comfort” factor to the question of agreeing to a third-party country. In order for any country to serve as a “hub” for international arbitration, it is necessary that, at the time of execution of the contract that includes the arbitration clause, the businesspeople who sign have at least some level of confidence (comfort) concerning access to the location selected (or to be selected) for any future arbitration.
In the post-October 7, 2023 era, all non-Israeli businesspeople who have given thought to any form of dispute resolution in Israel are aware of the fact that, after the war broke out in October 2023, air travel to Israel was severely curtailed. Any prudent business person who would be asked to consider arbitrating a future dispute in Israel would have to be aware of the possibility that a future armed conflict could lead to disruptions in air travel to and from Israel, like those disruptions that were experienced after October 7, 2023.
In the post-Oct. 7 era, how many non-Israeli business people are there who are prepared to ignore, at the time of entering into an international contract, the possibility that the country selected for the resolution of future disputes might, as a practical matter, be unreachable by air?
To ask the question is to answer it. No international business person would be prepared, at the time of signing, to ignore such possibility.
Bottom line: Over the next half decade, I do not see the “hub” aspiration as achievable.
Future blog posts of our firm will address additional issues regarding Israel’s aspiration to become an arbitration hub.