Cross-Border Pre-Judgment Relief in Israel (Part II)
In a previous post we discussed whether Israeli courts have subject-matter jurisdiction to grant temporary pre-judgment relief in connection with an action initiated and pending in a foreign country. We concluded that such a proceeding may be successful if properly done. However, the issue is still not settled in Israel and commencing such a proceeding is not without risk.
An order that was issued this last summer from the Tel-Aviv District court appears to have sided with the position that Israeli courts do not have jurisdiction to grant such pre-judgment relief. Mattel Europa B.V. v. Sakal Toys, Ltd., Civ. Act. 2550-07-19 (Dist. Ct., Tel-Aviv, July 9, 2019).
The petitioner in Mattel sought pre-judgment relief in connection with a legal proceeding pending in Amsterdam. The petitioner relied upon several of the orders that we discussed in our previous post on this matter, i.e. Roth v. International Credit Corporation of New York and Eli Lilly Expory S.A. v. Luxembourg Medicines, Ltd.
The Mattel court was not convinced and went out of its way to distinguish the authorities relied upon by the petitioner. For example, the court pointed out the in Eli Lilly Expory, although a lawsuit was not commenced in Israel simultaneously with the motion for pre-judgment relief, a de facto lawsuit was filed a week after the motion.
We respectfully disagree with the Mattel court's analysis.
While the court was correct in stating that in Eli Lilly Expory a lawsuit, in fact, was commenced in Israel. However, the Eli Lilly Expory court did not consider that fact when it made it general finding that Israeli courts are authorized to grant cross-border pre-judgment relief. The Eli Lilly Expory court's decision makes it clear that Israeli courts have jurisdiction to grant such relief.
Moreover, the Mattel court ignored additional judicial authorities that support the proposition that Israeli courts have jurisdiction, such as Windsoft Inc. v. Intercon Systems, Ltd., Civ. Act. 8786/95 (Dist. Ct. Tel-Aviv Aug. 3, 1995); Laboratories Anios v. Oriel Medical, Ltd., Civ. Act. 52391-11-15 (Cent. Dist. Ct. May 4, 2016). In Windsoft, the lawsuit was filed in New Jersey and there were no proceedings in Israel, save the motion for the pre-judgment relief. in Laboratories, the Israeli court was actually dealing with a completely different matter and, as a side comment, stated that the plaintiff could have filed a lawsuit in France and subsequently seeks pre-judgment relief in Israel (citing Eli Lilly Expory).
When all is said and done, we do not think the Mattel court properly addressed the matter. In the modern age, cross-border relief is becoming the norm and courts should make the effort to retain jurisdiction over these matters. The Mattel court could have justified its authority to grant such relief, yet failed to do so. Moreover, the Mattel court would have been more precise had it said that it was taking the more "conservative" approach to jurisdiction. Instead, adding confusion to this already complicated area of law, the Mattel court made it sound as if there is no authority that supports this type of jurisdiction or as if there is no split among the district courts. This is clearly wrong.
Mattel will certainly be exploited by litigants to support the more antiquated outlook on jurisdiction and sharpen the split among Israeli courts as to whether or not jurisdiction exists. However, our position in our previous post remains relevant, although the chances of success have become somewhat less due to the Mattel decision. Practitioners will need to be ready for this and properly point out why Mattel is wrong and distinguishable.
One thing is clear: the matter is ripe for Israel Supreme Court review.