The parties' arguments
- In her appeal, the appellant reiterated her reasons and arguments as they were brought before the Court for Administrative Affairs. With regard to the authority, it was argued that section 45 does not grant the authority not to renew a license for reasons of promoting competition, but only states that this consideration is one of a list of considerations that must be considered. The interpretation given to him by the court is excessively expansive and contradicts the rules of interpretation. Even if there was room to accept this interpretation, when it is not an explicit authority, it does not allow for a violation of the appellant's basic rights. However, even if the director has the authority to refuse to renew the license in the circumstances of the case, the court erred in determining that the exercise of the authority is lawful even without criteria. The determination of criteria is a prerequisite and binding condition for the exercise of the authority of the administrative authority, which applies even more strongly in the present case where the alleged authorizing norm is vague and general and in which the appellant's basic rights are violated. Moreover, there is no dispute at all about the need to set standards, since the respondent admitted this when he established an inter-ministerial team that recommended setting criteria for splitting brands and defining dominant importers in the two-wheeled vehicle market. In addition, the court went so far as to rule that section 45 cancels the obligation to consult with the Permanent Council, which is explicitly established in section 61(1)(a) of the Law.
- The court also erred in determining that the violation of her constitutional rights was lawful. When it was found that there was indeed a violation of her rights, there was room to shift the burden to the respondent to justify the infringement, but this was not done. Instead, the court tried to justify the infringement, but its reasoning raises many difficulties. Thus, for example, his determination that the promotion of competition requires innovative decisions raises a difficulty, since the promotion of competition cannot constitute an exclusive reason for the revocation of property and the violation of freedom of occupation. This is especially true when it comes to harm based on unfounded hypotheses and assumptions. Another difficulty lies in the fact that the court did not conduct judicial review of the authority's position on the merits of the matter. In this context, while a restriction imposed by the Competition Authority can be attacked before the Competition Tribunal – which examines the facts and professional assumptions on their merits – the Authority's position in our case has not been criticized as aforesaid, and this leads to serious harm to the appellant. Against the background of the aforesaid, the respondent did not meet the burden imposed on him to show that the severe violation of the appellant's rights would advance a proper purpose. The respondent also did not meet the burden of showing that this was a less harmful measure, and in fact did not examine alternatives at all; Nor does it bear the burden of showing that the benefit based on conjectures alone outweighs the heavy damage that will be caused to the appellant.
- Finally, it was argued that the court ignored other aspects that cast aspersions on the director's decision, including the fact that the default in administrative law is to extend a license unless there is a special reason that can justify the harm to the license holder and his legitimate expectation; of the appellant's reliance interest and its arguments in this matter; that the Administrator was supposed to examine all the relevant aspects under the Law already in 2016, and since it did not do so, there was no reason to harm the Appellant and her reliance; from the fact that the manager only took into account the consideration of promoting competition and did not attribute independent weight to the violation of the appellant's rights; from the failures that occurred in the Authority's opinion; and from the violation of the appellant's right to plead.
- The respondent, for his part, argued that the appeal should be dismissed. With regard to the question of authority, as determined by the Court for Administrative Affairs, section 45 of the law grants the Director explicit and independent authority not to renew a license for reasons of promoting competition in the automotive industry, and any other interpretation will void the provision of the section of its content. The respondent agreed with the court's determination that this power should be exercised in exceptional cases, but argued that the case at hand was one of those cases in light of the appellant's large market share in road motorcycles and the substitution between Yamaha and Kawasaki products. In addition, there is no room to intervene in the court's decision to reject the petition even though no proper criteria have been determined. The Director has the authority and expertise to examine applications for license renewal, and there are explicit provisions in the law regulating the manner in which the decision is made and the considerations that must be considered in the framework thereof. In any case, the decision was made after an in-depth examination of the concrete case – as is required to be done even when there are written criteria.
- The other claims of flaws in the decision-making process should also be rejected. The appellant was given an opportunity to present her arguments both in writing and orally, and even to refer to additional documents that were forwarded by the Authority; The opinions prepared by the Authority are professional and in-depth and there is no room to interfere with them; In his decision, the Director referred to the appellant's professional claims; This is not a situation in which the Authority's recommendations were adopted as written and worded in a "blind" manner, while the Director refused to adopt them in relation to Sun Yang's products. There is also no room to intervene in the decision on its merits. As the court ruled, the Administration's decision is reasonable and proportionate, and properly balances the public interest in increasing competition with the appellant's interest. Contrary to the appellant's argument, there is a close connection between the decision not to renew the license and the achievement of the purpose of promoting competition, as is also evident from the opinion prepared by the Competition Authority. Finally, with regard to the appellant's claim of reliance, it was argued that the respondent should consider extending the license in light of the provisions of the law, and in particular while giving weight to the purpose of the law which deals with increasing competition in the field of vehicles. Admittedly, when examining the appellant's previous applications in 2016 for the extension of the licenses, consideration was not given to the manner in which the law was implemented, when it came into effect a short time earlier, but this does not prejudice the respondent's obligation at this time to take the provisions of the law into account when making a decision. In any event, the appellant's considerations of expectation do not override the clear public interest in limiting the scope of the licenses it holds.
- In the hearings held before us on March 24, 2025 and October 20, 2025, counsel for the parties reiterated their arguments on one side and the other. In addition, the respondent's counsel updated that staff work is being carried out to formulate criteria for the exercise of the authority set forth in the Licensing Law. Counsel for the appellant, for his part, argued that the criteria that will be determined may lead to the conclusion that there is room to renew the license for the appellant, and therefore, to the extent that there is no room to accept her appeal, it is necessary to wait until the criteria are formulated. It should be noted that at the end of the hearing on October 20, 2025, we proposed to the parties a proposal that would eliminate the need for a decision on the appeal. However, since no agreement was reached for the proposal, the time had come for a decision.
Discussion and Decision
- After reviewing the arguments of the parties and hearing them in the hearing before us, I have reached the conclusion that the appeal should be dismissed, and I will suggest to my colleagues that we do so.
The Administrator's Authority
- One of the main disputes that arose between the parties relates to the question of whether section 45 of the Licensing Law authorizes the Director to refuse to renew the direct import license granted to the Appellant solely for reasons of promoting industry competition. The appellant is of the opinion, as stated, that the provisions of the Licensing Law indicate that the answer to this is negative, while the respondent is of the opinion that the answer to this is positive. The Court for Administrative Affairs adopted the Respondent's interpretation and, as will be detailed below, I found no reason to intervene in this conclusion.
- The starting point for clarifying the interpretive dispute between the parties is to be found, as is well known, in the language of the law. It is the language that defines the boundaries of interpretation (see various plurals: High Court of Justice 28190-08-24 Weistoch v. Property Tax Administration and Compensation Fund, para. 17 (February 12, 2025); Civil Appeal 4603/22 Hapoel Nir Ramat Hasharon v. Kfar Saba Assessor, para. 18 (June 28, 2023); Additional Administrative Hearing 5331/24 Population and Immigration Authority v. Clement, paragraph 35 of the opinion of my colleague Vice-President Sohlberg (December 7, 2025)). Only where it is found that the language can contain more than one interpretation should we look for the purpose of the legislation and examine which of the interpretations best fulfills this purpose (see, for example: Civil Appeal 8511/18 Tax Assessor Netanya v. Delek Hungary Ltd., para. 28 (January 26, 2020); Civil Appeal 8556/21 Tel Aviv Central Value Added Tax Administration v. GFI Securities Limited, para. 29 (February 26, 2024); Civil Appeal Authority 58589-04-25 Zahalka v. Adv. Yaron Oded - The Trustee, paragraph 16 (December 1, 2025)). Let us therefore turn our attention to the provisions of the law that are the focus of the discussion.
- The provisions of section 45 of the Licensing Law and section 11 of the Concentration Law have already been cited above, but due to their importance to the discussion of the following:
- The granting of a license under this Article, the determination of conditions therein or its renewal shall be governed by the provisions of Section C of Chapter B [of the Concentration Law], with the necessary changes.
And:
- (A) In allocating a right and in determining the conditions for that right, the regulator shall take into account, in addition to any other consideration that it must take into account in accordance with the law regarding the allocation, considerations of promoting industry competitiveness.
(b) If the right stated in subsection (a) is included in the list of rights, the regulator shall not assign the said right unless it has considered considerations of promoting sectoral competitiveness as stated in subsection (a), in consultation with the Competition Commissioner.