Background
Efi Ravivo, a software developer, and B. Connect Computers Ltd., a computing-infrastructure company, entered a cooperation agreement in late 2017. The agreement transferred software Ravivo had developed to the company and provided for mutual profit-sharing. The company subsequently developed additional software, which Ravivo claimed was a continuation of his original work. Their dispute ended the relationship and led to reciprocal proceedings in the Beersheba Regional Labor Court in 2019. The company claimed full ownership of the new software; Ravivo claimed its intellectual property. After being asked to quantify his claim, Ravivo set it at NIS 500,000.
The parties agreed on July 20, 2020 to arbitrate and signed an arbitration deed in August 2020. During the arbitration, Ravivo sought to add A.A.R. Bustap Ltd. and Benny Afrouki as respondents, citing concern that the company’s business had been transferred to Bustap while the company was stripped of assets. He also sought to increase the arbitrated claim to approximately NIS 3.5 million. On April 17, 2023, retired Judge A. Tanenbaum, acting as arbitrator, granted both requests in his award. He found no employer-employee relationship, awarded Ravivo 35% of the new software’s value at termination under the cooperation agreement, and ordered the respondents, jointly and severally, to pay approximately NIS 3.1 million.
The Regional Labor Court (Judge R. Gross) annulled the entire award in TA 13303-06-23. It identified excesses of authority concerning the employment determination, the increased claim amount, and the addition of parties that had not signed the arbitration deed. On October 6, 2026, the National Labor Court—Judges M.M. Acting President A. Itach, S. Davidov-Motola and R. Polyak, with public representatives Ms. V. Edwards and Mr. M. Avrahami—granted leave to appeal but dismissed the appeal in BA 68320-02-26.
The Court’s Holding
The Supreme Court panel—Justices Yael Willner, Alex Stein and Ruth Ronen, with Justice Ronen writing—dismissed Ravivo’s petition without requiring a response from the respondents. It reiterated that the Court does not sit as an appellate court over National Labor Court judgments. Intervention is reserved for exceptional cases involving a material legal error and required by considerations of justice. Ravivo’s arguments, despite their asserted general importance, were appellate arguments rooted in the case’s particular facts.
The National Labor Court had recorded no dispute that the arbitrator exceeded his authority by deciding that no employment relationship existed. It also held that adding the additional respondents exceeded his authority because they were not parties to the arbitration deed and their addition was first granted in the award itself. Although it identified difficulty with the Regional Labor Court’s reasoning about authority to increase the claim amount, it saw no reason to disturb the factual-interpretive finding that the parties intended to submit a defined amount, based on testimony and the circumstances surrounding the deed. It further emphasized that deciding the increase and joinder requests for the first time in the award seriously violated natural justice, supporting annulment under section 24(4) of the Arbitration Law, 1968.
The Supreme Court treated the challenges to those findings as case-specific. It noted that the National Labor Court had discussed infringement of the right to be heard as an additional statutory annulment ground, beyond what was necessary, while emphasizing that the respondents had not pleaded that ground. The Court also rejected the argument that the labor courts had to address every remaining contention. Once they found no authority to increase the claim or add respondents—and, at minimum, a fundamental natural-justice defect—there was no need to decide whether joinder was substantively justified or whether the employment determination affected compensation. The National Labor Court’s circumstance-specific refusal to order partial annulment or return the matter to the arbitrator, after considering that option, was an exercise of discretion not warranting intervention.
Key Takeaways
- The petition and the accompanying request for an interim order were dismissed; no costs order was made because the respondents were not asked to respond.
- The Supreme Court applied its exceptional, material-legal-error standard for reviewing National Labor Court decisions, rather than reweighing factual and interpretive findings.
- The natural-justice discussion concerned decisions first granted in this award; the Court did not announce a universal rule governing every increase in an arbitration claim or joinder of a non-signatory.
- The approximately NIS 3.1 million award remained annulled in full, without partial preservation of the monetary obligation or remand to the arbitrator.
Why It Matters
The decision illustrates the narrow scope of High Court review of National Labor Court rulings in arbitration disputes. Arguments about an arbitration deed’s breadth, unaddressed factual assertions, or possible severance will not necessarily justify intervention where the labor courts’ conclusions rest on case-specific authority findings, procedural fairness and remedial discretion.
The ruling leaves intact the annulment of this award, not a categorical prohibition on arbitrators increasing claims or joining additional parties. Its immediate practical consequence is that Ravivo did not obtain restoration of the award or reconsideration of the labor courts’ refusal to return the dispute to arbitration.