\u00a9 2016 Sherby & Co., Advs.<\/p>\n
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Does a non-Israeli litigant have an advantage<\/em> when it, as the prevailing party in Israeli litigation, seeks an order for the payment of legal costs?\u00a0 Based upon a recent judgment from a Tel Aviv District Court, the answer is sometimes<\/em>.<\/p>\n By way of background, Israeli courts are not known for issuing large awards for the payment of litigation costs. \u00a0The general rule in Israeli litigation is that the losing party pays at least some<\/em> amount of its adversary\u2019s legal costs.\u00a0 See Encyclopedia of Int\u2019l Commercial Litig.<\/em> (Israel Chapter) \u00a7 A.10.7 (explaining how Israeli law differs both from US law and UK law). \u00a0Under Israeli procedure, some<\/em> amount of costs is routinely<\/em> awarded in favor of the prevailing party.\u00a0 See id<\/em>.\u00a0 Under Israeli practice, when determining the amount of costs, a court is required to take into account the amount at issue in the litigation as well as the amount of the relief that was actually awarded.\u00a0 The court is also authorized to consider the manner<\/em><\/strong> in which the litigants conducted the case.<\/p>\n It is on that issue \u2013 the manner<\/em><\/strong> in which a litigant conducted itself in the course of the litigation \u2013 that makes the recent (April 2016) District Court case of Alstom Transport S.A. v. Israel Railway Ltd<\/em>. et al.<\/em> of interest.<\/p>\n The French company Alstom had submitted a bid in a tender issued by Israel Railway (in connection with one of the largest infrastructure projects in Israel\u2019s history).\u00a0 Alstom lost the tender to the Spanish company Sociedad Espa\u00f1ola de Montajes Industriales SA (\u201cSEMI\u201d), whereupon Alstom decided to challenge the tender process in court.<\/p>\n Alstom lost its legal challenge, and the court found that its conduct<\/em> \u2013 which included \u201cspying on a business competitor\u201d \u2013 was \u201cfundamentally improper.\u201d<\/p>\n Prior to issuing its substantive ruling regarding the tender process, the District Court ordered each party to notify it, in writing, as to the amount actually spent (by that party) on the litigation.<\/p>\n That information proved to be significant.\u00a0 In its final judgment, the court observed that all of the litigants had acknowledged that, because of the intense timetable of the litigation and the need to present testimony from non-Israeli witnesses, the costs were high.<\/p>\n As part of its judgment, the court ordered Alstom to pay legal costs to Israel Railroad in the amount of NIS 83,000 and to SEMI in the amount of NIS 691,000.<\/p>\n By Israeli standards, those amounts were unusually high.<\/p>\n Was the <\/em>Alstom<\/em> case <\/em>sui generis<\/em>?\u00a0 Assuming <\/em>that \u201cspying\u201d is the exception and not the norm, then perhaps Alstom<\/em> was sui generis<\/em>, which would suggest that <\/em>Alstom\u2019s conduct justified a relatively high award of costs.<\/p>\n But aside from the specific (and possibly unique) facts of Alstom<\/em>, there is one procedural \u201ctake away\u201d from this case:\u00a0 that the presence of \u201cunusual\u201d circumstances \u2013 such as the need to present testimony from foreign witnesses, or a tight schedule for evidentiary hearings \u2013 could cause an Israeli court to issue an order for an unusually high payment of costs.<\/p>\n An additional observation:\u00a0 It is common for an Israeli court\u2019s order of costs to be expressed in a round number<\/em>.\u00a0 When an Israeli court uses the round number method, it commonly does so without requiring the prevailing party to submit any written evidence as to its actual costs.\u00a0 However, when an Israeli court issues a costs award in an amount other<\/em> than a round number, it usually does so after the submission of evidence<\/em> concerning actual costs.<\/p>\n Yet in the Alstom<\/em> case, there is no indication that the written notices (which, as noted above, the court required<\/em> all parties to submit) concerning amounts actually spent on the litigation included any declaration (affidavit).<\/p>\n Perhaps Alstom made it easy (ironically) for the court to accept the (apparently) unsubstantiated amounts claimed by SEMI and Israel Railroad \u2013 Alstom had informed the court that its<\/em> actual costs were approximately NIS 1 million.\u00a0 Because SEMI sought under NIS 700,000 in legal costs, the court might have reasoned that Alstom got off \u201ccheap.\u201d<\/p>\n In all events, it can be expected that Alstom<\/em> will (if not appealed) be cited by non-Israeli litigants when they prevail before Israeli courts.<\/p>\n","protected":false},"excerpt":{"rendered":" \u00a9 2016 Sherby & Co., Advs. Does a non-Israeli litigant have an advantage when it, as the prevailing party in Israeli litigation, seeks an order for the payment of legal costs?\u00a0 Based upon a recent judgment from a Tel Aviv District Court, the answer is sometimes. By way of background, Israeli courts are not<\/p>\n