By Haggai Carmon

On November 16, 2008, the Official Gazette of Israel published the new Foreign States Immunities Law -2008. The new law became effective on that date, except for cases that their hearing has begun prior to that date. The new law regulates civil lawsuits and other proceedings filed in Israeli courts against foreign states. Prior to the passage of the law, Israel followed the doctrines of customary international law. The new law does not affect diplomatic or consular immunities.

Many foreign states would find the new law to be limiting their ability to conduct their affairs in Israel as before. In particular, no labor disputes with local hire employees will be protected by sovereign immunity- that was the case in most matters prior to the passage of the law, but there were exceptions.

The new law denies sovereign immunity even in matters that international conventions and case law had determined to be protected by sovereign immunity such as termination of employment, or refusal to hire for security reasons. The law also denies immunity in lawsuits for accidental death, bodily injuries, or damage to property if the accident occurred in Israel, save for very limited circumstances. Although said  torts exclusion is widely common internationally, Israel went farther and tacitly excluded immunity in lawsuits resulting from accidents involving visiting foreign military, unless there is an existing agreement between Israel and the foreign country.

However, the most damaging article which was included in the draft Bill which gave the Israeli courts an unlimited power to issue against a sovereign injunctions, mandamus, declaratory judgments and “any other remedy deemed fit by the court” – was removed, following my appearance before the Knesset’s Judiciary Committee. Many pertinent issues were still left open and are not covered by the law including reciprocity, Comity, and the most surprising omission: there is no exclusion of immunity for terror sponsoring states.