## Facts

- Israel enacted Basic Law: Human Dignity and Liberty and Basic Law: Freedom of Occupation (1992), including a limitation clause for rights restrictions and a savings clause protecting pre-1992 laws.
- After an agricultural economic crisis, the Knesset enacted the Family Agricultural Sector (Arrangements) Law, 1992, creating a “rehabilitator” empowered to settle, restructure, and cancel certain agricultural debts.
- A 1993 amendment extended the covered debt period and broadened which obligations could be restructured or cancelled, affecting creditors’ collection rights.
- Multiple disputes arose between creditors (including a bank and a credit company) and agricultural cooperatives, members, or guarantors regarding whether debts and claims had to be handled by the rehabilitator.
- District courts issued differing rulings, including transferring claims to the rehabilitator in some matters and questioning the amendment’s validity under the Basic Laws in others.
- The Supreme Court consolidated the matters, treated leave-to-appeal applications as appeals, and addressed the Basic Laws’ constitutional status and the Court’s power to review legislation.

## Issues

1. Whether Israel’s Basic Laws protecting human rights have supra-legislative, constitution-like status superior to ordinary statutes.
2. Whether the Knesset has constituent authority to enact Basic Laws as higher-order norms.
3. Whether the Supreme Court may invalidate ordinary legislation that conflicts with Basic Laws.
4. Whether the 1993 amendment’s expansion of debt restructuring and cancellation violated creditors’ property rights contrary to Basic Law: Human Dignity and Liberty, and whether any violation was justified under the limitation clause.

## Decision

- The Court held that the human-rights Basic Laws have quasi-constitutional status and normative superiority over ordinary legislation.
- The Court held that the Knesset acts in a dual capacity—legislative and constituent—when enacting Basic Laws.
- The Court confirmed the judiciary’s authority to review and invalidate ordinary statutes that violate Basic Laws.
- The Court recognized that the 1993 amendment implicated creditors’ property rights and evaluated the interference under the limitation clause (proper purpose and proportionality).
- In the bank’s appeal, the Court rejected the challenge and upheld transferring the claim to the rehabilitator.
- In the other consolidated matters, the Court accepted the appeals and remanded for reconsideration under the constitutional standards articulated.

## Legal Principles

- Basic Laws protecting human rights function as supreme norms that ordinary statutes cannot impliedly repeal.
- The Knesset may enact Basic Laws in a constituent capacity, giving them higher normative status than ordinary legislation.
- Courts may conduct constitutional review and invalidate ordinary statutes inconsistent with Basic Laws.
- Post-Basic-Law legislation (or amendments) that expands or worsens a rights infringement is reviewable, even if earlier related legislation is protected by a savings clause.
- Interferences with protected rights (including property) must satisfy the limitation clause: enacted by law, for a proper purpose consistent with state values, and proportionate (no greater than required).

## Conclusion

The Court constitutionalized Israel’s human-rights Basic Laws, grounded judicial review in the Knesset’s constituent authority, and applied limitation-clause proportionality analysis to legislation restructuring agricultural debts, dismissing one creditor challenge while remanding other disputes for reconsideration under the new framework.


United Mizrahi Bank Ltd. v. Migdal Coop. Vill., 49(4) P.D. 221 (Isr. 1995)