JSC<\/em> decision is noteworthy in at least two respects \u2013 (a) it is the second time in less than three years that the Supreme Court has dealt with the issue of enforcement of judgments from Russia, and (b) it contains a detailed discussion as to the availability of the statutory defense that the respondent (defendant before the foreign court) did not receive a \u201creasonable opportunity\u201d before the foreign court to present his defense.<\/p>\nThis blog post deals primarily with the Russia-related issues from the JSC<\/em> case, and in a subsequent blog post, we will discuss the Supreme Court\u2019s analysis of the availability of the \u201clack of reasonable opportunity\u201d defense.<\/p>\nEnforcement (again) From Russia:<\/strong><\/p>\nThe first case in which Israel\u2019s Supreme Court dealt with the enforceability of a judgment from a Russian court was in 2014, in Double K Oil Products Ltd. v. Gazprom Transgaz Ltd<\/em>.\u00a0 The Double K<\/em> decision received a great deal of attention (and some criticism), primarily for two reasons \u2013 (a) its \u201cbenefit of the doubt\u201d approach concerning the integrity of the Russian judicial system, and (b) its flexible (or \u201copen to reexamination\u201d) approach to the issue of reciprocity concerning Russian courts.<\/p>\nOn the issue of the Russian judicial system\u2019s integrity, the Court in Double K<\/em> took note of the fact that courts in the United States and in the UK have enforced Russian judgments notwithstanding contentions by some that the Russian judicial system is corrupt.\u00a0 Without closing the door to the possibility that a future litigant could successfully oppose the enforcement of a Russian judgment by proving corruption, the Supreme Court relied heavily upon the fact that the respondent in Double K<\/em> had executed a contract that included a forum selection clause<\/em><\/strong> that expressly authorized the Russian courts to exercise jurisdiction.\u00a0 Essentially the Supreme Court told the respondent:\u00a0 \u201cOnce you consent to the jurisdiction of the Russian courts, don\u2019t come crying to us about that court system\u2019s integrity.\u201d<\/p>\nOn the issue of reciprocity, the Supreme Court in Double K<\/em> held (in a nutshell) that, until proven otherwise, the Israeli judiciary should assume that Russian courts would recognize Israeli judgments.<\/p>\nJSC and Consent to Jurisdiction:<\/strong><\/p>\nAs was the case in Double K<\/em>, the applicant in the JSC<\/em> case was able to point to the signature of the respondent on a contract (actually multiple<\/em> contracts) containing a forum selection clause conferring jurisdiction upon the Russian courts.\u00a0 To a large extent, the existence of the forum selection clauses was a showstopper \u2013 the Supreme Court in JSC<\/em> cited to its longstanding rule that consent to foreign jurisdiction estops a defendant from denying the jurisdiction of the designated court.\u00a0 (Pp. 20-21, para. 22)<\/p>\nReciprocity — Silence is Golden:<\/strong><\/p>\nAs indicated above, in Double K<\/em>, the Supreme Court left open the possibility that, if it were to turn out that Israeli judgments are not enforced \u201cas a matter of principle\u201d in Russia, there might be a change with respect to the enforceability in Israel of Russian judgments.<\/p>\nCiting to the above observation in Double K<\/em>, the respondent in JSC<\/em> asserted that, subsequent to the decision in Double K<\/em>, no Israeli judgment had been enforced in Russia, and the respondent argued that, therefore, the reciprocity requirement in its<\/em> case was not met.<\/p>\nThe Supreme Court made short shrift of that argument. \u00a0The Court observed that the argument was made with little or no proof. (P. 20, para. 21)<\/p>\n
Of course, the Court could have been even more critical of the respondent on this issue \u2013 because the question is not whether any Israeli judgment has been enforced in Russia. \u00a0Rather, the issue is whether enforcement of an Israeli judgment has been denied<\/em> by any Russian court.\u00a0 Apparently the respondent was not able to call to the court\u2019s attention any such case.\u00a0 It is, of course, possible that many judgments have been rendered by Israeli courts in recent years against debtors located in Russia but that there was no need in those cases to seek enforcement in Russia.<\/p>\nAs indicated above, a subsequent blog post will address the Supreme Court\u2019s analysis of the availability of the \u201clack of reasonable opportunity\u201d defense.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
\u00a9 2017 Sherby & Co., Advs. Israel\u2019s Supreme Court has long articulated a liberal interpretation of Israel\u2019s Enforcement of Foreign Judgments Law (1958).\u00a0 See Encyclopedia of International Commercial Litigation\u00a0(Israel Chapter) \u00a7 B11.1.\u00a0 In the recent case of JSC VTB Bank v. Margolis (Civil Appeal 1948\/15, March 6, 2017), the Supreme Court extended that liberal approach.\u00a0<\/p>\n
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