The benefits of arbitration in business (In Israel) as a tool for resolving disputes are many. First, these are usually much lower litigation costs than those filed in court. Second, the management of evidence in an arbitration proceeding is immeasurably faster than the conduct of the entire proceeding in the courts. In addition, arbitration proceedings in Israel can be conducted in secret, without fear that information that may harm either party from a business point of view will leak out. These are key benefits in the life of the business world, where efficiency and the good of the business are of particular importance.
Another major advantage of business arbitration in Israel over litigation in the court system stems from the possibility of pre-selection of the arbitrator in a manner agreed upon by both parties. That is, instead of the parties getting a randomly assigned judge to hear the case, the parties agree by appointment on someone they both trust in advance. There are many degrees to this difference, especially in the business world. Think of a business dispute that arose between businessmen over an import deal, in which one of the parties felt deprived: when the hearing comes to court, it is not known whether it will be a judge who was previously a civil lawyer with a branch in the business world, or a judge who grew up in academia or commerce with a background that is not relevant at all.
It is important to say: unless stated otherwise and explicitly in the arbitration agreement, even an arbitrator, like a judge in a court of law, is not allowed to bring his professional expertise to a decision (RAA 300/89 and the Construction and Earthworks Company v. Tiktiner Tamir). In an arbitration proceeding, the parties may choose an arbitrator whom they trust, not only in terms, but also in being familiar with the business norms to which the parties are accustomed; This is why many organizations and institutions, where conflicts are often very similar to each other and very entrenched in the business and cultural world in which the parties operate, often see a regulation that contains arbitration clauses whereby business disputes between parties will be discussed before an arbitrator. This can be seen, for example, in the diamond exchange, industry employment agreements and more.