Other Municipality Applications 70166-06-25 Arkia International v. Nir Ephraim, which was recently granted (November 7, 2025), the appellants argued that punitive compensation should not be awarded due to non-payment of statutory compensation when there is a sincere dispute regarding entitlement to it (when the appellants referred to the Kagan case above). The District Court accepted their argument and ruled that in view of the infrastructure presented to them, they were entitled to believe in good faith that there was no basis for the payment of statutory compensation and therefore reduced the amount of punitive compensation that was determined due to other violations, when there was no reason to give weight to it when there was an honest dispute about the entitlement to compensation. This determination that there is no reason to award exemplary damages due to the fact that the appellants shared their obligation to pay statutory compensation was also adopted by other municipal applications 44574-05-24 Arkia Israeli Airlines in a tax appeal v. Kokia (February 13, 2025), which preceded the ruling in the Arkia International case above. hereinafter: the Cuckoo case).
- As stated, the legislature in section 11(a)(1)(b) of the law states that the court may award compensation, for example, if an operator or organizer knowingly did not provide the benefits "in contravention of the provisions of section 6" (emphasis not in the original - A.M.). If this is not as controversial as the first two benefits, then there is room for punitive damages. However, if the matter is disputed in light of the existing qualifications and it is explicitly stated that the statutory compensation is not in every situation but subject to it, and there is room for the organizer or the operator to voice his line of defense, then it cannot be said "knowingly" that he did not know at that time whether or not he was in breach, since the restriction can and will apply (ibid.).
It should be noted that the term "knowingly" that appears in section 62 of the Torts Ordinance [New Version] imposes liability for causing a breach of contract - including even "turning a blind eye" when a mental state of turning a blind eye is like actual knowledge and is rooted in the refusal to examine and examine the state of things. Although this was determined in relation to criminal law, as a rule, I do not see any real difference, taking into account what is stated in the import of the Torts Ordinance explicitly by the legislature, albeit in a different matter, in order to fulfill the element of "knowingly".