The results of the defect and the status of the defendants to argue in his case
- As stated above, the plaintiff does not dispute that the prescribed conditions were not met in our case In section 104 to the Companies Law. However, according to her, the result of the defect is not the nullity of the decision, but rather the fact that it can be revoked according to Section 109(a) of the Companies Law, which states as follows:
"A decision made at a meeting of the board of directors that convened without meeting the prerequisites for convening it (hereinafter - a defect in the meeting) may be revoked at the request of any of the following:
(1) A director who was present at the meeting, provided that he demanded to refrain from making the decision in respect of which the defect existed, before it was made;
(2) A director who was entitled to be summoned to the meeting but was not present at the meeting, within a reasonable time after he became aware of the decision and no later than the first meeting of the board of directors to be held after he became aware of the decision;
(3) If the defect in the meeting relates to a notice regarding the place or date of the meeting, a director who came to the meeting despite the said defect shall not be entitled to demand the cancellation of the resolutions."
The plaintiff points out that even when there is a defect in the convening of the board of directors' meeting, the board of directors' decision is not automatically null and void, but can be revoked at the request of a director for whom one of the alternatives listed in the section exists. This is similar to the permanent arrangement In section 55(b) to the Companies Law, which deals with other defects in the company's operations, and also restricts the circle of those entitled to demand the cancellation of a decision of the company's institutions that is defective. Therefore, the plaintiff argues, the defendants have no standing to raise claims against the decision of the board of directors to file the lawsuit against them.
- Section 109(a) The Companies Law refers to a case in which the "prerequisites" for convening a board of directors meeting were not met. The question therefore arises as to whether a situation in which a legal minyan did not take place can be treated as a "defect" of the kind it deals with Article 109 The law or perhaps this is a figure that means that there was no meeting of the board of directors at all, and in any case no decision was made by the board of directors at all.
The question of the status of decisions made by the company's institutions without the requirement of quorum being fulfilled was examined in the Supreme Court's judgment in Other Municipal Applications 63/78 Cohen v. Kot, IsrSC 35(1) 337, 342-344 (1980) ("the Kot case"). In the same matter, the question of the validity of decisions made by the company's directors and the general meeting was discussed, inter alia, without the requirement in the company's incorporation regulations regarding the legal quorum for the purpose of making the decision. The court held that the decisions were invalid (pp. 343-344):