Legal Updates

An Israeli Court will not honor a foreign Court disclosure order unless under Israeli law such order could have been granted

February 3, 2021

A Canadian company was sued in Ontario, Canada, for CAD 450 million and filed a counterclaim of CAD 550 million against ten entities, including an Israeli company engaged in providing business and industrial intelligence services, for which it was alleged that it was involved in business espionage. After the Israeli company entered liquidation, the Canadian company demanded to receive information about the company from the liquidator for the purposes of legal proceedings in Canada based on an order given by consent in Canada, without first receiving the position of the company in liquidation.
The Supreme Court denied the motion. Under Israel law, a Court in Israel will act to assist a foreign Court and enforce orders of foreign Courts, but this while exercising discretion and the Court in Israel will not grant an order issued by a foreign Court, where the order contradicts basic enlightenments or jeopardized material rights under Israeli law. Thus, an order will not be issued against an Israeli entity that is not a party in the foreign proceeding or, as in this case, was added as a party only so that orders may be obtained against it. It is not possible to obtain a general order for the disclosure of documents that is a “fishing trip in the company's waters”. In addition, in light of the company's involvement in the provision of business intelligence services, the disclosure of the information in its computers may harm third parties and for this reason a general search order of computers will not be possible.