\u00a9 2017 Sherby & Co., Advs.<\/p>\n
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We recently posted a partial summary<\/a> of the March 6, 2017 judgment by Israel\u2019s Supreme Court in JSC VTB Bank v. Margolis<\/em>\u00a0<\/em>(Civil Appeal 1948\/15, March 6, 2017), in which the Court enforced a series of (related) Russian judgments and addressed multiple issues arising under Israel\u2019s Enforcement of Foreign Judgments Law (1958).\u00a0 We noted that the JSC<\/em> decision is significant with respect to the\u00a0circumstances under which an Israeli court would accept the defense (section 6(a)(2) of the EFJL) that the judgment-debtor was not afforded a \u201creasonable opportunity\u201d to present its defense before the non-Israeli court.\u00a0 The March 10 post<\/a> focused on a number of Russia-specific issues, and we indicated that a subsequent post would address the \u201clack of reasonable opportunity\u201d defense.<\/p>\n But first we address, in this post, an issue that had not (prior to JSC<\/em>) been ruled on by the Israeli Supreme Court \u2013 namely, whether an Israeli court should consider a foreign court to have properly exercised jurisdiction solely on the basis of implied<\/em> consent to that court\u2019s jurisdiction.<\/p>\n Coincidentally, in our post of February 8, 2017<\/a>, we discussed a recent District Court case, Otkritie<\/em>, and we observed:<\/p>\n For at least 20 years, case law from Israel\u2019s Supreme Court has recognized two grounds . . . for finding that a foreign court had personal jurisdiction over the foreign (usually Israeli) defendant \u2013 \u201cresidence\u201d or \u201csubmission.\u201d\u00a0 The \u201cresidence or submission\u201d rule has been repeated several times by Israel\u2019s Supreme Court.<\/p>\n In analyzing the issue of the personal jurisdiction of an English court, the [District Court in\u00a0Otkritie<\/em>] made the following observation:<\/p>\n Consent to jurisdiction may be given in different ways, including orally and implicitly.\u00a0 One of the ways to give consent to jurisdiction is when a litigant litigates in a foreign court on the merits.<\/em><\/p>\n Undoubtedly there is case law from other Israeli district courts that supports the above-quoted statement from the\u00a0Otkritie<\/em>\u00a0court.\u00a0 But the\u00a0Otkritie<\/em>\u00a0court did not cite to any\u00a0Supreme<\/em>\u00a0Court case in support of that proposition.<\/p>\n The reason appears to be that there simply\u00a0is no<\/u><\/em>\u00a0such case law from Israel\u2019s Supreme Court.<\/p>\n<\/blockquote>\n We wrote that post on February 8, 2017.\u00a0 Little did we know that approximately a month later, the Supreme Court would address this very issue.<\/p>\n In the JSC<\/em> case, the Israeli-based judgment debtor argued that the Russian court did not have personal jurisdiction over him \u2013 even though he had executed multiple agreements that included a provision in which he expressly consented to the jurisdiction of the Russian courts.\u00a0 (Para. 22)<\/p>\n It was a loser<\/em> of an argument, but it provided a springboard for the Supreme Court to examine generally the issue of the approach, under the Enforcement of Foreign Judgments Law, to the exercise of jurisdiction by non-Israeli courts.\u00a0 Not surprisingly, the Court referred to its multiple decisions setting forth the general rule that a foreign court will be considered to have had jurisdiction over the foreign (usually Israeli) defendant based upon \u201cresidence\u201d or \u201csubmission\u201d (consent).<\/p>\n\n