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Pearl Cohen Wins Landmark Ruling in the Israel Supreme Court

Publications / Sep 11, 2014

The Israeli Supreme Court upheld the Tel Aviv District Court’s ruling that a judgment of the Moscow Commercial Court is enforceable in Israel on the basis of reciprocity.

In an opinion written by Justice Daphne Barak-Erez with Justices Yoram Danziger and Noam Solberg assenting, the Supreme Court rejected the appeal of Double K Fuel Products (1996) Ltd., an Israeli company (“Double K”), against a 2012 ruling by the Tel Aviv District Court in favor of Gazprom Transgaz Ochta Ltd., an Israeli subsidiary of the Russian oil giant Gazprom represented by the law firm Pearl Cohen Zedek Latzer Baratz.

In early 2009, Gazprom sued Double K in the Commercial Court in Moscow, Russia, seeking recovery of approximately € 5 million for gas supplied in 2007. The Moscow Commercial Court ruled in favor of Gazprom, but Double K did not comply with the ruling.

In 2011, Gazprom filed a lawsuit with the Tel Aviv District Court, seeking enforcement in Israel of the Russian judgment against Double K. Pearl Cohen attorneys argued that while there exists no mutual enforcement treaty between the Russian Federation and Israel, Israeli law nonetheless authorizes the Israeli courts to recognize and order the enforcement of foreign judgments, if it is found that the country of origin would in principle enforce Israeli judgments as well. The Tel Aviv District Court agreed, and also found that Gazprom’s attorneys had demonstrated that this was in fact the case with the Russian Federation, as Russian law permits recognition of Israeli judgments on the basis of reciprocity. Convinced that that all other conditions for the recognition and enforcement in Israel of the Moscow judgment had been satisfied, the Court ruled in favor of Gazprom.

Double K appealed to the Israeli Supreme Court against the decision, ultimately unsuccessfully.

Justice Barak-Erez states in her opinion that “there is sufficient basis for a finding that the Russian courts enforce judgments of foreign courts even without a foreign bilateral treaty between their country of origin and Russia…”. She notes, however, that if this situation changes in the future such that Israeli judgments are no longer enforced in Russia, this would affect the continued recognition and enforcement of Russian judgments in Israel.

This is the first time that the Israeli Supreme Court ruled on the enforceability in Israel of Russian court rulings.

Pearl Cohen’s Commercial Litigation Group, headed by attorneys Benjamin Baratz and Eyal Abramov, was assisted by their colleagues from the firm’s Russia desk, attorneys Anna Moshe who heads the Russian Desk and Irit-Karat Segal.