Enforcement in Israel Permitted for a U.S. Judgment Awarding $10.9 Million

Nature of the Dispute

The applicant argued that the defendants, who had been appointed to manage the funds of the company he owned, unlawfully used the funds for their personal purposes and caused significant harm to him and the company. The arbitration required them to pay $10,914,731, after which the federal court in California confirmed the arbitration award. Because the defendants did not comply with it and were subsequently located in Israel, together with assets situated here, the applicant applied to an Israeli court.

Conditions for Enforcement in Israel

The applicant relied on Section 3 of the Enforcement of Foreign Judgments Law, 5718–1958. He argued that the U.S. court had jurisdiction, that the judgment was final and enforceable in the United States, and that it could be enforced in Israel as a monetary obligation. In his view, the judgment was also not contrary to public policy.

The Defendants’ Objections

The defendants argued that during the proceedings they resided in Israel and did not consent to the jurisdiction of the federal court in the United States. They further argued that they were not given an opportunity to present their position in the arbitration or in the proceedings to confirm the arbitration award. Accordingly, in their view, there were no grounds to enforce the foreign judgment in Israel.

The Court’s Decision

The court held that the applicant had established the required conditions through affidavits and expert opinions. It determined that the California courts had jurisdiction and that the final monetary obligation was enforceable both in the United States and in Israel through the Enforcement and Collection Authority. The court also noted that the defendants knew of the proceedings and could have filed objections, but did not avail themselves of that opportunity and did not seek to vacate the arbitration award. The application was granted.

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