Foreign Judgments Enforcement in Israel – What Constitutes Unfair Trial?

Preface

World globalization creates international litigation. Plaintiffs win cases in a given jurisdiction, but need to collect in another, since the defendant’s assets are there. As in the United States, Israel also has its Foreign Judgment Enforcement Law 5718-1958 (the “Law”). The law sets the terms and procedure for enforcing a judgment rendered outside of Israel.

The recent FJE (TA) 39241/03, M.R. v. I.R presented an out-of-the-ordinary issue in cases of foreign judgment cases, and accordingly produced a series of novel decisions in various matters.

Plaintiff filed suit in Miami, Florida for divorce and alimony (as well as a monetary action in Tel Aviv regarding defendant’s assets in Israel) against defendant and was awarded judgment in her favour. After the judgment was upheld in an appeal (filed by plaintiff), she sought to enforce it in Israel.

Defendant raised multiple defenses in his objection to the enforcement, of which this article will review only three: (1) Enforceability of personal status rulings in Israel; (2) foreign court’s jurisdiction over assets located outside its forum; and (3) the standard for “reasonable opportunity to present one’s arguments and evidence”.

Foreign Judgment Enforcement: the Basics

As in Many jurisdictions in the US, the Israeli Law is based on comity. As determined in Israeli case law for many years, an application for enforcement of a foreign judgment is not a re-trial. The “enforcing court” will not hear the case and allow the parties to argue for the merits; it does not act as a court of appeals for the original judgment, and it will not review the foreign court’s reasoning for the judgment. It will only refer to the fulfillment of the conditions for recognizing the foreign judgment, or the lack thereof (A (Jerusalem District Court) 3137/04, Ahava (USA) Inc. v. J.W.G Ltd.; CA 221/78, Ovadia v. Cohen; A (Jerusalem District Court) Shoval v. Fartouk). Even clear mistakes will not prevent enforcement of the foreign judgment, if all conditions of the Law are met.

The conditions for enforcement are that the foreign judgment was rendered by a competent court; that it is no longer appealable; that the orders contained therein are enforceable under Israeli law and do not contradict public interest; that it is enforceable in the jurisdiction where rendered; and that the foreign jurisdiction’s law does not prohibit enforcement of Israeli judgments.

Once the plaintiff proves meeting all abovementioned conditions, the foreign judgment is to be enforced…unless defendant can show one or more defenses also set forth in the Law.

One of the defenses is that the defendant did not have a reasonable opportunity to argue and prove his case in the foreign court.

Non Religious Jewish Divorce and the Public Interest

One of the defenses raised by defendant was that the Florida Court’s divorce judgment violated Israeli public interest, since the parties were married according to Jewish Law (Ke-Dat Moshe Ve-Israel), and were Israeli domiciliaries at the time of the judgment. Since Under Israeli law Rabbinical courts have exclusive jurisdiction over divorce procedures of Israeli Jews, the Florida divorce judgment stands against Israeli public interest.

The court rejected these arguments stating first, after long analysis that the parties were Florida domiciliaries, not Israelis. More importantly for the principle matter, the court ruled that the matter involved “foreign public interest”, in which case only extremely unjust results materially harmful to public interest in Israel will justify non recognition and non enforcement of a foreign judgment. Such unjust results may occur when the foreign judgment stands against fundamental beliefs and legal rights of the Israeli public such as women’s equality, children’s welfare, polygamy, severe injury to vital international state interests and others which harm basic fundamental moral, justice, liberty and fairness (CA 1137/93, Eshkar v. Heims; A (Jerusalem District Court) 3137/04, Ahava v. J.W.G. Ltd.).

Therefore, and considering section 4(a)(c) of the Rabbinical Courts Jurisdiction (Marriage and Divorce) Law 5713-1953, marital status judgments of non Israeli domiciliaries can be enforced in Israel and it does not offend Israeli public interest (AA 701/06 (Jerusalem District Court) Haru v. Haru). Moreover, even if the status part of the foreign judgments were unenforceable in Israel, the monetary part is enforceable and may be separated for enforcement purposes from the personal status part of the judgment (CA 566/81, Shmuel v. Shmuel; FC (Jerusalem) 730/04, S.H. v. D.H.).

Following CA 541/77, Rosenstein v. Spartus and ACH 7059/01, FORUM BRUNO KRIESKI v. Marks, the court also ruled that the foreign court IS competent to rule in personal status matters, even with regards to Jews, who’s personal status is altimately decided according to religious law, so long as the foreign court can show personal jurisdiction, which may be as minimally bases as on temporary residence (and perhaps even short term stay or even passage within the foreign jurisdiction at the time of commencement of the action and the service).

Foreign Courts’ Jurisdiction over Assets Outside their Jurisdiction

The court ruled, and that is of significant importance to any person litigating divorce in any given Jurisdiction with assets in other jurisdictions as well, that the Florida court did have jurisdiction over the couple’s entire assets while performing equitable distribution, even though some assets were outside Florida.

Lack of Reasonable Opportunity to Present One’s Arguments and Evidence

In the I.R. case, defendant claimed that he did was not awarded a reasonable opportunity to present his arguments and evidence, thus meeting the defense terms of section 6(a)(2) of the Law, prohibiting enforcement. Defendant argued that he was in a bad medical condition, placed under the threat of arrest if not adhering to the Florida court’s jurisdiction and was mentally unable to properly appear before the Florida court and present his case.

In CA 802/89, Indoorxis v. Indorxis and in CA 4721/95 Rimon v. A.E.L. Leasing Co. the Israeli supreme court had ruled that the reasonable opportunity refers to objective opportunity, i.e. basic due procedure requirements, such as the right to be represented by counsel, the right to present evidence, the right to an impartial judge and/or jury, proper service etc. Subjective hardship in presenting one’s case, and even physical inability not caused by the other party, will not even be considered by the enforcing court. Such arguments should have been made in the original foreign court which rendered the judgment, and failing to raise them there constitutes waiver of any such argument; rejection of such argument by the foreign court creates estopple, and in any event, does not constitute lack of reasonable opportunity to present one’s arguments and evidence.

Negligent legal representation in the foreign court also does not constitute unreasonable opportunity to present arguments and evidence. If anywhere, the place for such argument is in the original foreign court, not in the court where enforcement is sought.

Closing Note

There are many Israelis and former Israelis who live abroad either permanently or for short periods of time. The scenario described above is not a rare one. When planning the legal strategy in the foreign (non Israeli) court, it is wise to consult with an Israeli attorney, so as to foresee the implications of the legal process over the religious marital status and to explore the available options with respect to monetary issues in general and with respect to assets located in Israel in particular.

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