Conditions for recognition and enforcement
Which types of judgment (eg, monetary judgments, mandatory or prohibitory orders) are enforceable in your jurisdiction and which (if any) are explicitly excluded from recognition and enforcement (eg, default judgments, judgments granting punitive damages)?
Under Section 1 of the Foreign Judgments Enforcement Law (5718-1958), Israeli courts recognise and enforce judgments rendered in civil disputes (as opposed to criminal cases), including monetary judgments and permanent injunctions. However, a judgment ordering the payment of compensation or damages to an injured party can be enforced in Israel even if was not entered in a civil matter.
Regarding punitive damages, in Greenberg v Bamira (CA 1268/07) the Israeli Supreme Court affirmed a district court judgment which enforced a New York Supreme Court judgment awarding both punitive and compensatory damages for breach of a partnership agreement on the grounds that the obligation comprised punitive damages awarded in civil proceedings. In this regard, the criteria for the enforcement of a foreign judgment under Section 1 of the Foreign Judgments Enforcement Law was applied. In its decision the Supreme Court held that punitive damages do not conflict with Israeli public policy, since under Israeli law courts are authorised and empowered to impose punitive damages, although in practice they rarely do so.
How are foreign judgments subject to appeal treated?
Regarding the enforcement of a foreign judgment, according to Section 3(2) of the Foreign Judgments Enforcement Law, one of the conditions necessary for declaring a foreign judgment enforceable is that “the judgment is no longer appealable”. Provided that the judgment is appealable in the foreign country (regardless of whether an appeal was already filed), it cannot be declared enforceable pursuant to the Foreign Judgments Enforcement Law. However, Section 8 of the law includes certain exceptions to this condition concerning alimony and child-support judgments:
"The court may, if it considers that the circumstances of the case justify it doing so, enforce a foreign provisional judgment or interim order in a matter of maintenance even though such judgment or order may still be appealable, so long as the other conditions imposed by this Law are fulfilled in respect thereof."
In this regard, Section 8 grants the court the authority to enforce appealable provisional judgments or interim support orders, despite the condition set out in Section 3(2) of the law. When a judgment is final, and once the conditions of the law have been met, the burden of proof passes to the party objecting to enforcement to produce evidence of the law’s defences. For an interim order, on the other hand, even after proving that all of the preconditions are satisfied, the petitioner still bears the burden of proving that the specific circumstances justify the interim order’s enforcement.
This requirement is not mentioned in the Foreign Judgments Enforcement Law with respect to the recognition of foreign judgments.
What are the formal and documentary requirements for recognition and enforcement of foreign judgments?
Enforcement Under Section 3 of the Foreign Judgments Law, a foreign judgment will be enforced in Israel provided that all of the following conditions have been complied with:
· The judgment has been rendered by a foreign court, which under the laws of the foreign jurisdiction was competent to render the judgment;
· The foreign judgment is final and not subject to appeal, and an appeal is no longer possible (or an appeal has been rejected and no further appeal is possible);
· The obligation imposed by the foreign judgment is enforceable under the rules of enforcement of judgments in Israel;
· The content of the foreign judgment does not contradict Israel's public policy; and
· The judgment is capable (as a legal matter) of being executed in the jurisdiction where the judgment was made.
Under Section 4 of the Foreign Judgments Enforcement Law , Israeli courts will enforce only foreign judgments which were rendered in a country which would similarly enforce a judgment given by an Israeli court.
It is for the claimant to prove to the Israeli court that all the conditions listed above are satisfied.
A motion for the enforcement of a foreign judgment is required to be filed with the competent Israeli court within five years of the foreign judgment being rendered. Such motion should be supported by an affidavit regarding the facts and content of the applicable foreign law (possibly in the form of an expert opinion), in order to prove that the conditions for enforcement under Section 3 of the Foreign Judgments Enforcement Law have been satisfied.
Recognition The Foreign Judgments Enforcement Law allows two possibilities for the recognition of foreign judgments:
- direct, with the aim of recognition of the foreign judgment under Section 11(a) of the law; and
- incidental, in which a court may recognise a foreign judgment “incidental to a case under its jurisdiction, and for the purposes of that matter”.
Where the foreign judgment is the cause of action in a domestic court, direct recognition is preferred. When the foreign judgment's recognition arises incidentally in a case where the cause of action is different, incidental recognition is sought.
Four cumulative conditions must be met in order for an Israeli court to recognise a foreign ruling, in accordance with Section 11(a) of the Foreign Judgments Enforcement Law:
- An agreement with a foreign country applies to the judgment;
- Israel has agreed in such agreement to recognise foreign judgments of that nature;
- Israel’s stated obligation applies solely to foreign judgments enforceable under Israeli law; and
- The judgment complies with the terms of the agreement.
The issue of incidental recognition of a foreign ruling in Israel is governed by Section 11(b) of the Foreign Judgments Enforcement Law. Section 11(b) provides that in hearing a case within its jurisdiction, and for the purpose of that matter, a court may recognise a foreign judgment if it deems such recognition to uphold the interests of law and justice. In Regev v Saadi (DCC (TA) 1802/01) the district court set three conditions for the incidental recognition of a foreign judgment:
- The incidental recognition of the foreign judgment should be within and for the purposes of the case before the court;
- The recognition should be incidental, which is possible only when “the foreign judgment is not the subject of the argument itself”; and
- The court "deems it proper to do so in the interests of law and justice”.
Within the framework of the court's considerations, Israeli case law has held that Section 6 of the Foreign Judgments Enforcement Law (regarding the defences available to the losing party to a foreign judgment) may be used in order to consider whether incidental recognition is deemed proper "in the interests of law and justice" (see Stern v Verifone Holdings Inc (RCA 3973/10)).
What substantive requirements (if any) apply to the recognition and enforcement of foreign judgments? Are enforcing courts in your jurisdiction permitted to review the foreign judgment on the merits?
As a general principle, there is no review of the merits of the judgment given by the court of origin. In Wells Fargo Bank of Minnesota National Association v Zimmering (DCM (Jm) 4052/05) the court held that “the court does not require a new, local investigation of the foreign court proceedings; does not examine the factual or legal correctness of the foreign judgment; and does not even take the reasoning of the judgment into account". However, a judgment which conflicts with Israeli public policy will not be enforced. Further, Section 7 of the Foreign Judgments Enforcement Law protects Israel’s vital interests regarding its international status and foreign relations which, in cases of conflict, will override foreign judgments which are sought to be recognised or enforced in Israel. In addition, the enforcement of a foreign judgment may be refused if the judgment conflicts with another valid judgment, whether Israeli or foreign.
What is the limitation period for enforcement of a foreign judgment?
Section 5 of the Foreign Judgments Enforcement Law provides that the court will not hear an application for enforcement of a foreign judgment if such application is filed more than five years after the day on which the judgment was entered, unless a different period has been agreed between Israel and the state where the judgment was entered or the court considers there to be special reasons justifying the delay. This requirement is not mentioned in the Foreign Judgments Enforcement Law with respect to the recognition of foreign judgments.
Grounds for refusal
On what grounds can recognition and enforcement be refused?
Service of process
To what extent does the enforcing court review the service of process in the original foreign proceedings?
Under Section 6(a)(2) of the Foreign Judgments Enforcement Law , a foreign judgment will not be enforceable if it is demonstrated to the court that the defendant was not afforded reasonable opportunity to:
- present arguments; and
- submit evidence before the judgment being given.
This principle was discussed by the Israeli Supreme Court in JSC VTB Bank v Margolis (CA 1948/15). In that case the defendant (who held dual Russian-Israeli nationality) was a guarantor in favour of certain Russian banks and provided an address in Moscow for the purpose of receiving notices concerning the guaranties, although the guarantor did not actually reside at that address.
One of the banks commenced legal proceedings against the guarantor and served the claim at the address provided by him. In court the bank argued that this was confirmation of valid service. The bank proceeded to obtain a summary judgment against the guarantor and sought to enforce the judgement in Israel. The defence raised by the guarantor was that since he had not been served with the court papers in the proceedings in Russia, he had no knowledge of the proceedings.
In determining the guarantor's argument, the Israeli Supreme Court stated that as long as the party seeking enforcement of the foreign judgment produces “some” evidence that service was made at an address "reasonably associated" with the defendant, the burden rests with the defendant to demonstrate that such service was not sufficient to put it on notice of the legal proceedings.
This was not the first case in which the Supreme Court approved the enforcement of a foreign default judgment. However, in that particular case the court expressed a relatively low level of interest as to whether the Russian procedures for performing service of process were in fact fully complied with.
What public policy issues are considered in the court’s decision to grant recognition and enforcement? Is there any notable case law in this regard?
Section 3(3) of the Foreign Judgments Enforcement Law states that a foreign judgment will not be enforced if its content “contradicts the public policy in Israel”. In this regard, the term ‘content’ appears to include not only the judgment, but also the factual basis in the particular case. The implication of this is that although the judgment might appear to be compatible with Israeli public policy, the Israeli court will not enforce the foreign judgment if the factual background or circumstances contradict such policy.
Inevitably, the question arises as to what is meant by ‘public policy’. Legal scholar Amos Shapira has stated that the term ‘public policy’ is by its nature flexible, not subject to definitive interpretation and encompasses underlying political, social and economic interests as well as basic social values, longstanding ethical principles and fundamental principles which are considered as being decent and just (Shapira, “The Recognition and Enforcement of Foreign Judgments”, 4 Iyunei Mishpat 509, 530-534 (1974)).
In this regard, Shapira cites the following domestic principles and interests that must be taken into account in the case of foreign judgments which a court is requested to recognise or enforce in Israel:
- Basic lifestyle of the domestic society – foreign judgments that overtly contradict the basic and normative lifestyle found in Israel will not be recognised or enforced in Israel (eg, equal rights for women and the best interests of the child);
- The state’s vital interests with respect to international relations – an Israeli court will not recognise or enforce a foreign judgment that significantly harms Israel's international status and interests, including the security needs of the state and the objective not to adversely affect or unnecessarily criticise the laws of a friendly foreign state; and
- Basic values of ethics, justice, freedom and fairness – foreign judgments that contradict the inherent values found in Israeli society will not be enforced or recognised in Israel. This would include judgments which are characterised by racial discrimination or lack of religious tolerance, as well as judgments that unjustly or arbitrarily confiscate property.
In Ashkar v Hiams (CA 1137/93) the Israeli Supreme Court held that only in exceptional circumstances will a foreign judgment not be enforced due a conflict with Israeli public policy. In this regard, an allegation that a foreign judgment is flawed or unjust will be insufficient. Thus, even when a foreign judgment is based on a norm that diverges from norms of Israeli law, this inconsistency alone is generally insufficient to constitute a conflict with public policy in Israel.
What is the extent of the enforcing court’s power to review the personal and subject-matter jurisdiction of the foreign court that issued the judgment?
Section 3(1) of the Foreign Judgments Enforcement Law prescribes as a precondition for declaring a foreign judgment enforceable that “the judgment was given in a state the courts of which were, according to its laws, competent to give it”.
In this regard, the issue of jurisdiction with respect to the foreign forum that rendered the foreign judgment may arise with respect to both the internal jurisdiction (under the laws of the country where the judgment was entered) and international jurisdiction (under the rules of Israeli private international law concerning the jurisdiction of foreign courts).
Concurrent proceedings and conflicting judgments
How do the courts in your jurisdiction address applications for recognition and enforcement where there are concurrent proceedings (foreign or domestic) or conflicting judgments involving the same parties/dispute?
Section 6(a)(5) of the Foreign Judgments Enforcement Law states that a foreign judgment will not be declared enforceable if it is proven to the court that when the action was brought before the foreign court, a suit on the same issue and between the same parties was pending before an Israeli court. The defence contained in this section, which applies the legal principle of lis alibi pendens (a suit pending elsewhere), is intended to prevent the possibility that a party to a suit pending before an Israeli court will initiate, for tactical or other reasons, parallel proceedings in a foreign court in order to be awarded a judgment that can then be used in Israel.
This requirement is not mentioned in the Foreign Judgments Enforcement Law with respect to the recognition of foreign judgments.
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