Ground Breaking Decision awarded to the Liquidators of Eldon Ventures Limited (In Liquidation) regarding Client Attorney Privilege in Israel

Press Release–On 2 May 2011 the Tel Aviv Magistrate’s Court (the “Court”) in Israel rendered its decision granting the British Virgin Islands (“BVI”) based Liquidators of Eldon Ventures Limited (the “Company”) the right to examine the company and shareholder information held by the Company’s former legal advisor. The Company’s former legal advisor claimed that as he jointly represented both the company and its shareholders client attorney privilege prevented him from sharing this information and the Liquidators were obliged to seek directions from the Court. This is the first time that a decision of this type has been rendered by the Israeli courts in pursuance of a request for judicial assistance originating from a foreign legal authority and going forward it is likely to be an additional tool for Liquidators to use in future Israeli company investigations.

The Liquidators, Mr. Kenneth Krys and Mrs. Charlotte Caulfield of KRyS Global, identified several parties of interest in Israel during their investigations into the affairs of the company. In order to obtain access to these parties and the Company information in their possession the Liquidators were required to make an application to the BVI Court to issue a formal Letter of Request (a letter rogatory) to the Minister of Justice in Israel, on behalf of the Liquidators for the examinations of these parties pursuant to the powers set out in Section 284 of the BVI Insolvency Act 2003. This application was successful and the BVI Court issued a Letter of Request in this regard. The Israeli Court subsequently granted the Liquidators leave to execute the Letter of Request and the Liquidators proceeded to conduct interviews of several parties including the former legal advisor in Israel. It was during the course of this examination that the legal advisor claimed that the majority of documents within his possession were subject to client attorney privilege and could not be shared. The legal advisor confirmed that he would cooperate fully with any Court directions should it be determined that no such client privilege exists. The Liquidators applied to the Court to confirm whether any client attorney privilege applies and in its decision the Court ordered the former legal advisor to deliver up all company documents in his possession and make himself available to answer all questions posed by the Liquidators in respect of the Company and its shareholders.

The joint liquidators were represented in this matter by their Israeli Attorneys, Alex Hertman and Noam Zamir of S. Horowitz & Co., Tel Aviv and British Virgin Islands Attorneys, Richard Evans and Dawn Smith of Conyers Dill & Pearman.