The plaintiffs' arguments
- The plaintiffs claimed that C.A.L. had fundamentally breached the agreement by refraining from paying the entire additional consideration. According to them, the attempt of C.A.L. to adhere to the conditions of Mega constitutes a strict insistence on a contractual right and acting in bad faith in the performance of a contract, contrary to the provision of the Article 39 of the Contracts (General Part) Law, 5733-1973 (hereinafter: The Contracts Law).
- According to the plaintiffs, the language of the condition is fraught with flaws and is unclear, and the term should be interpreted in a purposive mega-interpretation. The purpose of the condition was to protect C.A.L. from a situation in which Mega's activity would cease completely, and not from a recovery process. A stay of proceedings order issued at the request of Mega itself, with the aim of recovering and continuing its activity as a going concern, does not realize the risk against which the condition is intended to protect. The plaintiffs further claimed that the concern about Mega's future was known and apparent at the time the agreement was made, and was well anchored in reality, inter alia, against the background of the creditors' settlement in the case of Mega from July 2015, an additional reason not to allow K.A.L. to rely on Mega's terms as a reason not to bear the payment of the additional consideration.
- The plaintiffs emphasized that the agreement explicitly stipulates that the fulfillment of the conditions must be examined."At the time of the relevant payment" (as stipulated in clause 3.3 of the Agreement). Therefore, even if there was a dispute regarding the first payment, on the dates of the remainder of the consideration payments, after Mega was sold and continued to operate in a stable manner, there was no doubt that the conditions were met, and C.A.L. had to bear the remaining three payments of the additional consideration.
- It should be noted that in the early stages of the proceeding, the plaintiffs raised a claim that C.A.L., which actually managed Diners and had in-depth knowledge of its business, entered into an agreement on the basis of the economic examination conducted by Deloitte, which they claimed was "Lacking and tendentious" and led to the determination of a consideration lower than the real and future value of Diners (see paragraph 45 of the statement of claim). This argument was abandoned and was not included in the summaries submitted on behalf of the plaintiffs.
C.A.L. Claims
- C.A.L. claimed that it was exempt from paying the additional consideration in full. According to C.A.L., the language of the Mega Clause is clear and explicit. It states unequivocally that if an application for a stay of proceedings order was filed against Mega, and the order was not revoked within 60 days from the date of filing the application or the issuance of the order, then the condition was not met, and there is no entitlement to the conditional consideration payments. The plaintiffs' interpretation, according to C.A.L., stands in direct contradiction to the plain and clear language of the agreement.
- C.A.L. argued that the plaintiffs' claim that the language of the agreement is unclear is baseless and baseless and stands in direct contradiction to the plain language of the relevant clauses of the agreement. In any case, even according to a purposive interpretation, Diners' activity was indeed severely harmed as a result of Mega's situation.
- According to C.A.L., the exemption from the additional consideration applies in relation to each of the four payments: the date of the first was at the time when the stay of proceedings order in Mega's case had been pending for more than 60 days, so that Mega's condition for exemption from payment was met; However, when it existed, it also applied in relation to the three consecutive additional consideration payments, and thus denied the plaintiffs' entitlement to future payments as well.
- C.A.L. claimed that its engagement in the agreement stemmed from deception and bad faith negotiations on the part of the plaintiffs. According to her, it was harmed by the concealment of information regarding Mega's situation, which led it to contract at an excessive price for Diners shares. C.A.L. filed a counterclaim to demand the return of the overpaid amounts. This lawsuit, as stated, was deleted.
The course of the discussion
- The lawsuit was filed in September 2019, and was heard before a previous panel, until it was transferred to my care in 2022. In its early stages, the proceeding was characterized by many procedural disputes in connection with the issue of preliminary proceedings. After the procedure is transferred to my care, an order is issued for the submission of affidavits. The plaintiffs testified twice: Mr. Israel Yaniv, who served as the CEO of Alon Blue Square between the years 2015-2021, and Adv. Efrat Karazi-Goff, a partner in the law firm of S. Biran & Co., together with a team on behalf of the firm, represented the plaintiffs in drafting the purchase agreement. C.A.L. also testified twice: Mr. Barak Nardi, who served during the period relevant to the lawsuit as CFO of C.A.L. and later as Chairman of the Board of Directors, and Adv. Alon Levy, who worked at C.A.L. and later served as external legal counsel and was part of the team drafting the purchase agreement on behalf of C.A.L. Investigations were conducted, after several postponements requested, on March 30, 2025.
- The submission of the parties' summaries, also after several postponements, was completed in December 2025. Now the time is ripe for a decision.
Discussion and Decision
- The main question on the agenda is the interpretation of the Mega Terms: Is it sufficient to exempt C.A.L. from paying the additional consideration? The answer, I will preface, is in the affirmative - the language of the agreement is clear and unequivocal. The current procedure is an exemplary example Why should the language of the agreement be given priority in terms of the intentions of the parties? The interpretive step that the plaintiffs petition to carry out is contrary to contract law and the principles underlying them.
- This is the way the judgment works:
- First, we will discuss the basic principles in the interpretation of an agreement, in particular a commercial agreement between the parties, first and foremost: the reference to the language of the contract, as the position of C.A.L.
- Second, we will examine the contractual array between the parties, the formulation of the agreement, and the relationship between the parties. These clearly indicate that this is a case in which the language of the contract must be adhered to, despite the plaintiffs' attempts to resort to the interpretation of the parties' intentions from circumstances external to the language of the contract.
III. ThirdTurning to the language of the contract, it is clear: the Mega clause exempts C.A.L. from paying the additional consideration.
- Fourth, it should be noted that the plaintiffs themselves were also aware that the language of the contract was unequivocal, while they clung to reasons external to the agreement in an attempt to establish the payment of the additional consideration. Accordingly, they are prevented from denying the clear language of the agreement, or from claiming various "flaws" in the way the Mega Terms are worded.
- Fifth:, more than necessary, even if we were required to refer to the "defects" that the plaintiffs claim, in the language of the contract, they are not substantive.
- Sixth, and turning to the language of the contract and the examination of the mega terms: this, clearly, was fulfilled.
VII. SeventhFar more than necessary, even an appeal to the circumstances external to the agreement could not have helped the plaintiffs.