Zilka v Darwish

JurisdictionIsrael
CourtDistrict Court (Israel)
Date08 February 1954
Israel, District Court of Tel Aviv.
Zilka
and
Darwish.

Recognition of Acts of Foreign Governments — Exterritorial Effect of Confiscatory Legislation — Penal Laws — Whether Valid in respect of Property Situate Outside the Territory — Whether Enforceable in Israel Courts — Anti-Jewish Legislation in Iraq — Public Policy.

The Facts.—Prior to migrating to Israel, the plaintiff, a banker, had supplied credit to the defendant, a merchant, on current account. The transaction took place in Baghdad (Iraq), in which city the loan was to be repaid. A collateral transaction by way of bills also took place. The present actions (consolidated) were in respect of the loan and in respect of the bills. It was common ground that the proper law of the transaction was the law of Iraq, and that the law of Israel applied as far as concerned the remedies. In January 1950, the defendant illegally left Iraq. On March 4, 1950, a law was enacted in Iraq depriving certain Jews of their Iraqi nationality, and on March 10, 1951, another law was passed, placing under sequestration the property of Jews whose Iraqi nationality had been cancelled as aforesaid.1 The plaintiff was not an Iraqi national.

The defendant pleaded, inter alia, that the effect of the 1951 Law was to render illegal the discharge of the obligations by him

Held: that the Iraqi Law could have no effect as regards property situate outside Iraq. The debt was to be discharged in Israel currency at the rate of exchange prevailing in 1949, when it became due.

The Court said: “The argument [that the Laws of 1950 and 1951 cannot be distinguished from the main corpus of Iraqi law as the proper law of the transaction] raises the complicated question of Israel private international law, whether in the circumstances I am free to apply the Iraqi law as if the aforementioned Laws were not part of it, on the ground that a court in Israel is entitled to ignore foreign legislation of a criminal, including confiscatory, character, or a foreign law which runs completely contrary to what the law of Israel regards as consonant with its conceptions of public policy.

“There exists a view according to which an Israel court enjoys some freedom to apply or ignore a foreign law, for the purpose of reaching a just result, after due consideration of all the circumstances. The precedents do not disclose any consistency as to the correct test for this. There are several trends. (A). When Israel private law requires foreign law to apply in...

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