(See also Civil Appeal 5786/15 Azorim Development and Construction Investments Company in Tax Appeal v. Hassan, para. 15 (Nevo, September 3, 2017)).
- Therefore, the plaintiff must prove the fulfillment of two conditions:
- a) that a binding and valid brokerage agreement was entered into at the time of the investment between him and Cortica or a company related to it;
Second, because he was the effective factor in entering into the deal.
Below, we will examine whether the plaintiff met the burden of proof imposed on him.
Was a binding and valid brokerage agreement entered into at the time of the investment between the plaintiff and the defendants?
- The fact that on May 3, 2014, a locating (brokerage) agreement was entered into between the plaintiff and Cortica (or companies related to it, and in the language of the agreement: "affiliated entities") in the framework of which Cortica (or a company related to it) undertook to pay the plaintiff a commission for a financial investment made by Temasek in Cortica or in its related companies under the terms set out in the agreement, is not in dispute.
- The disputes between the parties in this context focus on the following questions:
- Was the agreement limited to an investment or a specific period, and was it valid at the time of the investment transaction, or was it canceled by Cortica before the transaction was executed?
- Is Tamasek's investment in Autobrians an investment in a "related company" to Cortica?
Was the agreement limited to an investment or a specific period and was it valid at the time of the investment transaction?
- The agreement was entered into in 2014, while Temasek invested in Autobrians in 2021, meaning that there is a gap of about seven years between the date of the parties' engagement in the agreement and the date of the "event" for which the plaintiff claims that his entitlement to the commission arose.
- According to the defendants, the agreement was limited to a certain investment round, which would be executed by Temasek at a date close to the agreement, and there is no reason to apply it to an investment that was made many years later, in another company and in another field.
- A review of the agreement shows that it does not include any provision that restricts it to a specific investment round. The fact that the words "for proposed investment" were mentioned in the preamble to the agreement does not indicate that the intention is to a specific investment round, but rather to any proposed investment that will occur following the acquaintance that the plaintiff will make between the parties. If the parties intended to limit the agreement to a specific investment round, it would have been expected that the agreement would specify specific dates and details about a specific investment round, but this was not done. Therefore, the language of the agreement does not support the interpretation claimed by the defendants, as Yigal also confirmed in his testimony (p. 130 of the transcript of paras. 10-12 and paras. 20-23). The fact that the agreement was drafted by Cortika's counsel also supports the adoption of the plaintiff's interpretation, since in accordance with section 25(b1) of the Contracts (General Part) Law, 5733-1973: "A contract that is given to different interpretations and one of the parties to the contract had priority in shaping its terms, an interpretation against it is preferable to an interpretation in its favor."
- The claim that the agreement was limited in time was also not proven by the defendants.
- As proved by the plaintiff, in the framework of drafts of the agreement, the possibility of limiting the agreement to a period of one year was discussed between the parties (Exhibit 2 of the plaintiff's exhibits, p. 12, paragraph 4), but in the end it was agreed not to set a period of time and the addendum limiting the agreement to a period of one year was deleted (Exhibit 2 of the plaintiff's exhibits, p. 17, paragraph 4).
- Instead of limiting the agreement to a certain period of time, clause 13 of the agreement establishes a mechanism that allows the agreement to be terminated with 30 days' advance notice from one party to the other. In addition, an "tail period" was agreed upon, which entitled the plaintiff to pay a commission for a transaction that was executed up to 18 months after the end of the agreement.
- Therefore, in order to cancel the agreement, the parties had to act in accordance with the cancellation mechanism set forth therein.
- The question that arises is whether the defendants acted, as they claim, to cancel the agreement in accordance with that mechanism? As we will see below, the answer to this is no.
- As stated, clause 13 of the agreement stipulates that a cancellation notice must be sent 30 days in advance. There is no dispute between the parties that no cancellation notice was sent (as confirmed by Yigal at p. 145 of the transcript of paras. 4-8).
- In addition, no formal notice was sent of the termination of the agreement or any other notice implying that the agreement was canceled.
- The defendants rely on their claim that the agreement was canceled on three emails:
The first was an email sent on September 2, 2014 by Mr. Lau of Tamasek to Yigal (Exhibit 14 to the plaintiff's exhibits, p. 72) in which Temasek announced that it was not interested in investing in Cortica in light of its early stages.