Government measures in key jurisdictions 3rd edition final - Flipbook - Page 69
Israel
Insolvency
Israel’s insolvency legislation has not changed during the COVID-19 pandemic. However, during the
month of April 2020, the Israeli Ministry of Justice introduced a draft bill for new regulations, allowing
Has the government a company additional time to reach an agreement with its creditors. Under the proposed new
regulations, courts will have the option to order a stay of proceedings for a period of up to three
made any changes
months for a company experiencing difficulties, prior to declaring such company insolvent. This threeto insolvency
month period will allow the company to reach an agreement with its creditors, while simultaneously
legislation?
prohibiting the withdrawal of funds and assets from the company. However, the new regulations have
yet to be adopted, and it is unclear if and when they will be.
Furthermore, additional reliefs were introduced during this period, such as a reduction of the monthly
payments due by debtors under receivership and temporary exemptions from these payment
obligations. However, all such reliefs were provided on a case-by-case basis, and not as a change to
legislation.
Contractual
Issues
The Israeli government has not implemented any specific measures to reinforce contracts. In Israel, the
"freedom of contract" principle is very dominant. Thus, any enforcement of contracts is considered a
commercial issue between the parties.
What measures
have been taken
to reinforce
contracts?
While the force majeure principle exists under Israeli contract law, it has been greatly minimized by the
courts, and is even deemed by some as a dead letter. This principle is thus rarely enforced. That said,
parties are free to agree on any force majeure provisions between themselves. The courts have not yet
been required to examine if the COVID-19 pandemic should be deemed a force majeure event, nor if
the pandemic should allow for the termination or enforcement of contracts.
Property
An inter-ministerial committee has been set up to examine the impact of the COVID-19 pandemic on
general contract law. In particular, the committee will consider if the pandemic constitutes a force
majeure event that justifies the breach or cancellation of a contract by one party without the payment
of compensation to the other. In due course, the laws relevant to property and rent may be amended
according to the conclusions and recommendations of the committee.
Have any changes
been made to
the laws around
property, rent and
enforcement?
Litigation
Are the courts
operating?
In addition, according to the Israeli Rent Law, tenants are exempt from rent payment, provided their
premises cannot be used. Nevertheless, these provisions are not mandatory for non-residential lease
agreements. Many rental agreements for premises serving retail or leisure purposes (which were
completely closed due to government orders) do not apply the Rent Law. Accordingly, such tenants are
not entitled to relief.
On March 15, 2020, the Minister of Justice (MOJ) signed and issued emergency orders affecting most civil
and criminal procedures in Israeli courts. Pursuant to these emergency orders, most hearings in civil cases
were halted, except for special cases such as hearings re motions for temporary and interim remedies.
Moreover, the submission of court papers was also postponed, except if a contradicting and overruling
decision in a specific case was handed down by the relevant court or if a specific date was given to submit
such court papers.
Most of the limitations imposed by the MOJ's emergency orders were lifted on May 10, 2020, thus
resuming any submissions halted due to these emergency orders and allowing most procedural matters to
return to normal, including the holding of court hearings.
Government measures in key jurisdictions
69