Israel updates

Arbitration & ADR

Court dismisses summary procedure claim due to lack of jurisdiction
  • Israel
  • August 10 2017

The Tel Aviv District Court recently dismissed a summary procedure claim on the basis of forum non conveniens (ie, discretionary court power to dismiss a case where a more appropriate forum is available). The court ruled that the jurisdictional clauses found in the chain of agreements between the parties clearly pointed to alternative fora. Therefore, in the absence of any indication that the parties intended to grant jurisdiction to the Israeli courts, the court ruled that they were not the proper legal fora.

Liquidation proceedings in foreign jurisdiction not grounds for staying arbitral proceedings
  • Israel
  • April 20 2017

Israel's pro-arbitration position was recently affirmed by a district court decision refusing to grant injunctive relief that would have the effect of staying International Chamber of Commerce (ICC) arbitration even in the face of foreign insolvency proceedings. The Tel-Aviv District Court rejected a temporary injunction application to prevent an Israeli party from continuing arbitration with the ICC and ordered it to submit claims solely to the South Korean court overseeing the insolvency proceedings.

Supreme Court upholds district court decision to enforce ICC award despite public policy challenge
  • Israel
  • December 01 2016

The Supreme Court recently refused to hear an appeal of a district court decision to enforce an International Chamber of Commerce award in Israel challenged on the grounds of public policy. The Supreme Court supported the district court's determination that a party's agreement to resolve a dispute in accordance with a contractual arbitral provision does not estop it from claiming that the dispute is not governed by the same contract, and that raising such a claim does not constitute bad faith.

Supreme Court stays local proceedings to allow foreign arbitration to proceed
  • Israel
  • April 21 2016

The Supreme Court recently reaffirmed its position in favour of staying local proceedings to allow a foreign arbitration to proceed. The court rejected a request to appeal a stay issued by the district court based on a claim under the New York Convention. As a result, the court upheld recent Israeli jurisprudence, whereby the termination of a contract does not necessarily terminate the arbitration agreement contained therein.

Supreme Court sets aside arbitration award for non-disclosure
  • Israel
  • January 07 2016

The Supreme Court recently affirmed that an arbitral award may be set aside where a party has breached its obligation to disclose information, even if no other grounds exist for setting the award aside. The decision emphasises the importance of consent as the basis of arbitration. Due to the consensual nature of arbitral agreements, a flaw in consent may lead to an award being set aside, including one caused by the breach of a party's disclosure obligation.


Aviation

Contributed by Levitan, Sharon & Co
What is considered an 'accident' under Montreal Convention?
  • Israel
  • December 13 2017

The Tel Aviv Magistrates Court recently declined a passenger's claim for bodily injury damages after it concluded that the event which was the subject matter of the claim was not considered to be an 'accident' as defined by the Montreal Convention. The plaintiff had filed a claim against El Al, arguing that he had been injured after eating a cake served to passengers.

Interpretation of cancelled flight under Aviation Services Law
  • Israel
  • October 11 2017

The Rehovot Magistrate Court recently ruled that a flight that had departed on time, but been forced to return to the point of departure following a five-hour flight due to technical malfunctions, was a cancelled flight in accordance with the Aviation Services Law. Although there is no binding precedent, the courts have – in lower-instance decisions concerning the law – applied it in cases where the circumstances did not meet the literal interpretation of the law regarding cancelled flights.

Montreal Convention prevails over local law on limitation period
  • Israel
  • August 09 2017

The Jerusalem Magistrates Court recently dismissed a claim for bodily injury caused to a passenger during a flight, as the claim had been filed more than two years after the plaintiff had reached his destination. The court referred to the Montreal Convention and the Carriage by Air Law, which provide that the right to a claim will be extinguished after a two-year period, despite the local Limitation Law providing a seven-year limitation period from the date of an admission of liability.

Skyfail: technical malfunction which delayed flight considered special circumstances
  • Israel
  • May 17 2017

Since 2012 various lower court judgments have held that technical malfunctions which cause delays or cancellations to flights are not considered 'special circumstances' which exempt the carrier from paying the monetary compensation set by the Aviation Services Law. However, the Netanya Small Claims Court recently denied a claim and determined that a technical malfunction in an aircraft which caused a flight delay constituted special circumstances.

Montreal Convention does not apply to internal flight in Spain
  • Israel
  • January 04 2017

The Petach Tikva Small Claims Court recently held that the Montreal Convention did not apply to an internal flight between two destinations in Spain, and that an Israeli court had jurisdiction to hear the claim. The court held that the convention does not apply in the case of an internal flight where the place of departure and destination are in the same country.


Competition & Antitrust

Contributed by Tadmor & Co Yuval Levy & Co
Major overhaul of Restrictive Trade Practices Law proposed
  • Israel
  • November 23 2017

The Antitrust Authority recently published a draft amendment to the Restrictive Trade Practices Law for public comment. The amendment proposes a broad reform of the law as regards restrictive arrangements, monopolies and mergers. According to the authority, the amendment aims to decrease the existing regulatory burden that applies to legitimate and efficient practices and strengthen anti-competitive enforcement.

Setback for private enforcement against alleged international cartels
  • Israel
  • September 14 2017

The Supreme Court recently confirmed that Regulation 500(7) of the Civil Procedure Regulations, which concerns court approval for service outside Israel, is not met where the alleged act or omission occurred outside Israel and only the anti-competitive effects are alleged to have taken place in Israel. The court further ruled that the effects doctrine – the governing doctrine for applying local antitrust law to foreign conduct – pertains only to the substantive applicability of such law to foreign conduct.

IAA steps up enforcement of financial sanctions
  • Israel
  • June 08 2017

The antitrust commissioner recently announced her intention to impose unprecedented financial sanctions on several monopolies and market leaders in Israel, as well as some of their senior officers. These announcements indicate that the use of financial sanctions to combat the abuse of a dominant position will likely play a key role in the Israel Antitrust Authority's agenda for the coming years.

IAA publishes draft guidelines on resale price maintenance
  • Israel
  • March 02 2017

The Israel Antitrust Authority recently published draft guidelines on resale price maintenance arrangements, following a Supreme Court decision that fundamentally changed the legal standard applicable to vertical arrangements. The draft guidelines survey the main concerns arising from resale price maintenance arrangements, the competition benefits that they may produce and the general methodology that should be used to analyse such arrangements.

IAA publishes new draft guidelines on excessive pricing
  • Israel
  • December 01 2016

The Israel Antitrust Authority (IAA) recently concluded its initial re-evaluation of its policy on the prohibition on excessive pricing by monopolies and published draft guidelines on the factors that it will consider in enforcing the prohibition. The draft guidelines structure the IAA's decision-making process in enforcing the excessive pricing prohibition and are expected to reduce significantly the number of cases in which the IAA will take action on the grounds of excessive pricing.


Employment & Benefits

Contributed by S Horowitz & Co
Lawful marriage does not guarantee that widow will receive deceased employee's social benefits
  • Israel
  • November 01 2017

The National Labour Court recently ruled that the widow of an employee, who had remarried her former husband on his deathbed, was not entitled to the various social benefits which had accrued to the benefit of the deceased's dependants. The employer refused to compensate the widow for severance pay differentials and the redemption of unused sick leave pay, claiming that such benefits were not part of the estate and that the widow was not a 'spouse' for the purposes of the social benefits claimed.

Supreme Court intervenes in state decision to limit employment term of judges' legal assistants
  • Israel
  • September 20 2017

The issue of fixed-term employment – both in general and in the civil service in particular – raises many legal issues. The Supreme Court of Justice recently had an opportunity to provide a ruling in a case involving judges' legal assistants who were employed under special contracts. The ruling is an example of how the Supreme Court can create or force the legislature or the parties to an employment relationship to create special solutions for employment situations that do not fit conventional models.

Employer may re-examine union representativeness
  • Israel
  • June 28 2017

Israeli collective labour relations confer a unique status on unions that are considered to be representative unions. According to a recent National Labour Court decision, the recognition of a union's representativeness must be followed by a period of stability in order to give the union and the employer an opportunity to establish a relationship of trust and cooperation. However, if clear indications suggest that the union is no longer representative, the employer may challenge the representativeness.

Duty to notify candidate that employment is temporary also applies to private sector employers
  • Israel
  • March 29 2017

​The Labour Court recently ruled that employers have a duty to inform prospective employees that the job that is offered to them is temporary and could be terminated at the end of a brief period, irrespective of their performance. The court ruled that, in the absence of other information, a candidate is entitled to assume that if he or she carries out the job satisfactorily, in the absence of unforeseen events, he or she can remain in employment indefinitely.

Employer awarded damages for employee breach of trust and bad faith
  • Israel
  • December 14 2016

A recent employment case found that an employer whose employee started a competing business during his employment was entitled to compensation, even though the employer could not prove unlawful misappropriation of its confidential information or solicitation of its clients. Although the employer was unable to prove the misappropriation of confidential information, it was awarded damages for the breach of trust and bad faith exhibited by the employee.


Insurance

Contributed by Levitan, Sharon & Co
Court declines jewellers' block claim, accepting argument of fraud
  • Israel
  • October 24 2017

The Central District Court recently declined a jewellers' block policy claim after the insurers proved that the claim had been filed with fraudulent intent. The case concerned an Israeli diamonteer who claimed that $10 million worth of diamonds had been stolen from him under the threat of violence. However, following an investigation by the insurers, it was revealed that a number of the stolen diamonds were still in the claimant's possession after the alleged robbery.

Third-party liability or professional indemnity – which policy should apply?
  • Israel
  • July 18 2017

There is a fine line between whether the act or omission of a tortfeasor is covered by a professional indemnity or public liability policy. To complicate the situation in Israel, professional indemnity policies are issued on a claims-made basis and public liability policies on an occurrence basis. The Tel Aviv Magistrates Court recently addressed these matters.

Failure to implement risk mitigation measures results in dismissal of insurance clause
  • Israel
  • May 30 2017

Before the Insurance Contract Law 1981 was enacted, failure to take protective measures could lead to a complete loss of benefits. However, following its entry into force, most court rulings have applied Article 21 of the law, which provides that if the insured fails to take risk mitigation measures as stipulated in the insurance contract, the insurer may be entitled to reduce the insured's benefits or even be discharged from liability.

Draft directive will ensure quick and fair settlement of long-term care insurance claims
  • Israel
  • May 09 2017

The minister of finance and the commissioner of capital markets, insurance and long-term savings recently published a draft directive designed to ensure better treatment of insureds with long-term care insurance policies. The directive intends to shorten and simplify the claims process and increase insurers' objectivity when evaluating an insured's medical situation.

Are adult children considered dependants under Road Victims Compensation Law?
  • Israel
  • March 28 2017

In a recent decision, the District Court examined the Road Victims Compensation Law's scope with regard to a deceased's adult children. The court ruled that even though the Road Victims Compensation Law does not define a 'dependant' as a minor, adult children are generally not considered to be dependants. The court will consider adult children as dependants only in rare circumstances based on evidence proving actual dependence and a lack of financial independence.