Foreign-Appointed Administrators and Cross-Border Practice

April 6, 2020

Consider the following scenario: An administrator is appointed by a foreign (i.e., non-Israeli) court to manage the estate of a decedent. After due diligence and investigation, the foreign administrator concludes that he/she must commence legal action in Israel against a creditor of the estate. 

 

Consider the next scenario: a foreign administrator seeks information located in Israel concerning the decedent/estate. The information is in the possession of various government entities and financial institutions.

 

Can the foreign administrator commence legal action in Israel? Does he/she have standing? Does the foreign administrator need to have his/her mandate recognized by an Israeli court prior to commencing a lawsuit on behalf of the estate?

 

The same questions apply – more or less – to the second scenario described above.

 

Several reported decisions in Israel provide some guidance in these matters. 

 

As in most jurisdictions, a foreign judgment is not automatically enforceable in Israel. Rather, the foreign judgment must be either "recognized" or declared "enforceable" through enforcement proceedings under Israel's Enforcement of Foreign Judgments Law of 1958 (the "FJ Law"). See more on this in an older post here. The court-appointment of an administrator to an estate is, for purposes of the FJ Law, a “foreign judgment”. Hence, logic dictates that the foreign administrator’s court appointment would need to be “recognized” under the FJ Law.  

 

Nevertheless, foreign administrators should be able to commence proceedings in Israel without the need to have their foreign-court mandate undergo a separate recognition/enforcement proceeding. For example, in Shaulberg v. Matar, Civ. Act. 312/96 (Jer. Dist. Ct., Jan. 26, 2006), a foreign administrator commenced an action against a judgment debtor of the decedent’s estate. The decedent had a money judgment from a New York court against the defendant and the foreign administrator brought an enforcement action in Israel against the defendant to recognize the New York court's judgment. The defendant challenged the foreign administrator's status under Israeli law and argued that absent any Israeli-court appointment, the foreign administrator lacked standing to commence the action. The Israeli court rejected this argument and found that it had the authority to recognize the foreign administrator under section 11(b) of the FJ Law which allows for the recognition of foreign judgments that are ancillary to the matter before the court.

 

In sum, under Shaulberg v. Matar, a foreign mandate appointing a foreign administrator may be recognized ancillary to the main issue for which the lawsuit is being brought by the same foreign administrator.

 

That takes care of scenario #1 above. What about scenario #2, where the foreign administrator seeks information only?

 

A foreign administrator facing a scenario #2 situation has at least two procedural alternatives to choose from:

 

First, a foreign administrator may seek the information directly from the relevant entity and, if denied, may seek a court order that instructs the entity to provide the information. That is what happened in Gornstein v. Bank HaPoalim, Est. Act. 1030/01 (Fam. Ct., Tel-Aviv, August 19, 2001). While the court did not specifically recognize the foreign appointment, the court invoked its authority to assist a foreign estate administration. In the end, the court instructed the bank to provide the information sought by the administrator.  

 

Alternatively, a foreign administrator may seek information under the Hague Evidence Convention. See, in general, our Hague Evidence Convention Guide.  For example, a foreign administrator may motion the non-Israeli court (presumably the court that appointed him/her) to issue a letter of request to the Israel “competent authority”, essentially subpoenaing the Israeli institute – such as a bank or government entity – for the information. This appears to be what occurred in a recent Hague Evidence procedure in Austria v. The Israel Competent Authority, Chikur Din 57764-08-19 (Mag. Ct., Tel-Aviv, February 6, 2020).

 

A foreign administrator may also consider filing a lawsuit under Israeli Freedom of Information Act of 1998, but that issue exceeds the scope of this post.

 

All in all, foreign administrators can perform several important administrator-related activities in Israel without being appointed by an Israeli court in a separate proceeding. That said, to the extent that the decedent had assets in Israel, the local appointment of an administer may be necessary. It goes without saying that each situation is unique and should be examined independently.  

 

  

 

 

 

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