Discussion and Decision
- After reviewing the written and oral arguments of the parties, I have reached the conclusion that the application should be granted.
- The relevant clause for our purposes is clause 16.3 of the agreement, which reads as follows:
"Each party hereby undertakes, that as long as it is a shareholder in the company [China-Israel Company - H.B.] or a holder of rights therein or anyone acting on his behalf who is an officer or employee thereof, and for a period of 12 months thereafter, shall not, directly or indirectly: (a) solicit or encourage any employee or service provider employed by the Company to cease to be employed by it; (b) Hire or receive services from an employee or service provider who will be employed or provide services exclusively by the Company; or (c) solicit or cause any of the Company's suppliers or customers to leave or terminate their engagement with the Company. With respect to an engagement with the manufacturer, this clause shall apply to each party as long as it is a shareholder or rights in the company, and for a period thereafter for 60 months. This section shall not apply to the agreement for the marketing of light vehicles (N1 M1) of Automatx [Direct Import - H.B.] With the manufacturer. It is further agreed that as long as both parties hold the Company's shares, representatives of both parties will be invited to participate in any meeting held with the Manufacturer, and will be written to the notice for any correspondence with the Manufacturer, without prejudice to the powers granted to the Company's CEO and the decisions of the Board of Directors."
- This clause is part of clause 16 of the agreement, entitled: "Conflict of interest; confidentiality; Non-solicitation." Despite the awkward wording of clause 16.3 of the agreement, its relevant provisions in our case are clear: as long as the parties are shareholders or rights holders in China Israel, and for 60 months from the date on which they ceased to be shareholders or rights as aforesaid, they are prohibited from causing the manufacturer to terminate its engagement with China Israel and/or to enter into an agreement with any of the shareholders other than through China Israel. The provision of the section excludes only the concession agreement in relation to light vehicles, and only those (since the owner of the franchise in their case is direct imports). It was also agreed that as long as the parties hold shares of China-Israel, representatives of both parties will be invited to participate in any meeting held with the manufacturer, and will also write to the company as part of any correspondence with the manufacturer.
- Traffic Devices argues that from the moment it cancelled the agreement on November 16, 2025, due to the non-fulfillment of the suspension condition regarding obtaining the import license, all the provisions of the agreement, including the provision of the aforementioned clause 16.3, are null and void and no longer bind it.
Indeed, a review of clause 2 of the agreement entitled "The Suspension Conditions" shows that we are dealing with an agreement that is contingent on the existence of all the suspension conditions. Clause 2.1 of the agreement states as follows: