"(g) With respect to apartments purchased in accordance with section 6(b)(1) above, and whose execution was completed after the end of the performance period in the specific contract, notwithstanding what is stated in the contracting contract to be signed or signed between the company and the ministry, an amount equal to 2% of the price of the apartment for each month of delay in execution will be deducted from the purchase price calculated in accordance with subsection (f)."
(h) Notwithstanding what is stated in this section above –
(1) In the event that the purchase obligation is realized after the end of the performance period, the interest as stated above will be calculated only until the end of the performance period; (2) In the event of the realization of the purchase obligation after 18 months from the end of the execution period, an amount of 2% for each month following the end of the aforesaid 18-month period will be deducted from the price of the apartment as stated in subsection (1) above; (3) in the event of the realization of a purchase undertaking in projects for which a purchase undertaking of 100% was given after the end of the execution period, an amount of 5% for each month following the execution period will be deducted from the price of the apartment to be determined as stated in subsection (f) above."
Factual Background and the Scope of the Dispute
- The Respondent is a building contracting company. On March 27, 1991, following an agreement reached between it and the Ministry of Construction and Housing, the Respondent signed the program contract. When the contract was signed (on July 31, 1991) by the State as well, and based on its condition, the parties further entered into two specific building contracts, according to which the Respondent undertook to build 748 housing units in a development area in the south of the country. We were therefore dealing with agreements for the construction of apartments, which, for the purpose of the distinction made in the program contract, belong to projects of the second type.
On February 27, 1992, when the construction of some of the apartments reached the end of "Phase 18", the Respondent presented to the Ministry of Construction and Housing its demand for the fulfillment of the State's undertaking to purchase these apartments from it. The State approved the demand for the purchase of the apartments, but the Respondent did not meet the date agreed upon (within the framework of the specific contracts) as the date of completion of the construction. With the consent of the State, the contractual deadline was extended until November 29, 1992, but in practice the Respondent completed the construction of the apartments only on January 3, 1993