Eject cause and eject defense
- This issue was discussed by the Supreme Court Other Municipality Requests 4576/16 Air vai OOD v. The Flying Carpet in a Tax Appeal (Published in Nevo, December 18, 2018) (Hereinafter: "The Flying Carpet Thing"). The parties there entered into an agreement according to which the appellant, an airline, would provide the respondent, a tourism company, with charter services of a certain and agreed scope from Tel Aviv to Burgas, Bulgaria. The tourism company was given the right to cancel a certain number of flights free of charge. In practice, a larger number of flights were canceled by the tourism company. Therefore, the airline acted to forfeit the collateral entrusted to it by the tourism company. The tourism company filed a claim in the airline's place of residence before an agreed arbitration institution for the return of the cancelled collateral money. In the arbitration award, it was determined that the airline must return about half of the amount forfeited. The airline then filed a financial claim in an Israeli court to award the balance of the cancellation money it claimed was due to it. The tourism company argued that the lawsuit should be dismissed out of hand due to estoppel of grounds. The District Court accepted the argument.
00In an appeal submitted to the Supreme Court, the tables were turned upside down. The Honorable Justice Grosskopf ruled:
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"The first line of argument cannot succeed, for the reason that it cannot be said in this case that the plaintiff (Air Via) was obligated to exhaust the cause of action for the balance of the cancellation fees in the framework of the arbitration proceedings. Even if we assume that Air Via could have filed a counterclaim as part of the arbitration proceedings (a claim that Air Via shared), there is no basis for the claim that it was obligated to file such a claim. To be precise, there are situations in which a cause that a plaintiff should have included in the first proceeding is considered exhausted even though it was not actually discussed. But what is this about? In a situation where the plaintiff chose to file the claim on certain grounds, and refrained from filing it on other grounds with which he should have joined (see, for example, Civil Appeal 461/58 Bitum Company in Tax Appeal v. Mannheim, IsrSC 13(2) 937, 943 (1959); The Klujner case, pp. 593-594; Civil Appeal 9774/05 Reuven v. Rokach, [published in Nevo], paragraph 6 (April 18, 2007); Civil Appeal 7183/13 Barak v. Delta Capital Group Ltd., [published in Nevo] para. 19 (July 12, 2015)). This is not the state of affairs in our case. Air Via did not file any claim in the arbitration, but only defended. In this situation, the claim that she was obligated to exhaust the arbitration proceedings and file a counterclaim is incompatible with neither the parties' agreements nor the law.