However, the combination A shareholder in an arbitration proceeding conducted by the company, and vice versa, only on the basis of focusing on the nature of the relationship between them, does not provide an answer to the question of whether there was indeed consent of that party to the arbitration proceeding. Even if I assume that there may be certain circumstances in which the nature of the relationship will provide a certain indication of consent to the arbitration proceeding of a person who is not a signatory to the arbitration agreement, it is not sufficient to determine the nature of the relationship and it is necessary to explain how it expresses consent. Focusing solely on the question of the nature of the relationship between the party who signed the arbitration agreement and the party whose joining is requested is inconsistent with the intention to locate the existence of a hidden agreement, and to a large extent misses the purpose of the third circle and the principle of consent underlying arbitration law.
- Second, from the perspective of corporate law, adding a party to the proceeding solely on the basis of the nature of the relationship between the shareholder and the company erodes the status of the principle of separate legal personality and harms the basic distinction between the company and its shareholders. As detailed above, this principle is fundamental and necessary for the proper operation of the company, and it is not for nothing that this court has ruled time and time again - including in the Ronen case - that deviation from it by lifting the corporate veil will be done carefully and sparingly, and only when the conditions that allow it are met. Adding a party to an arbitration proceeding solely on the basis of the scope of holding in the company or the involvement of the shareholder in its management, in practice means raising the screen, while bypassing the need to examine the terms thereof as detailed in Section 6 ofthe Companies Law.
- Therefore, we will take the right path and examine the alternatives of section 6 as possible sources for adding parties to an arbitration proceeding.
- Alternative 1 - Section 6(a) of the Companies Law - On the face of it, a full lifting of the veil by virtue of Section 6(a) of the Law does not constitute a suitable accommodation for adding a party to an arbitration proceeding. Lifting the veil of this type deals with attributing a debt of the company to a shareholder in it, and it is clear that joining a party to an arbitration proceeding is not a "debt attribution". Indeed, such a combination may lead in certain cases to a situation in which in the framework of the arbitration proceeding it will be determined that the company has a debt and that there is justification for attributing it to a shareholder in it by virtue of section 6(a) ofthe Companies Law, but it is certain that the combination is not a debt attribution in itself.
- It is possible to raise an argument that where there is a claim for a full lifting of the veil against a shareholder who did not sign the arbitration agreement, and this is backed up by an appropriate infrastructure, this justifies its inclusion in the arbitration proceeding being conducted with the company. However, in my opinion, this argument raises two significant difficulties.
The first is that the question of whether there is indeed an appropriate infrastructure for lifting the veil requires clarification in itself, and this will lead to the court hearing the application for joining to decide on behalf of the arbitrator on the questions that are supposed to be clarified before it. On the other hand, if the burden of proof is reduced, this will open the door for a party to join an arbitration proceeding only on the basis of a claim to lift the corporate veil (and see in this context the words of the District Court in the decision that is the subject of the appeal, paragraph 12, see also: Civil Case (District-II"Q) 27877-11-23 Carmei Gat Buyers Committee v. Emunah Initiation and Project Management on Appeal Taxes [Nevo] (28.5.2024); Civil Appeal Authority 6574/13 Amram v. Regev, paragraphs 12-13 [Nevo] (December 3, 2013)). Needless to say, this is an undesirable outcome. In this regard, the judge's words are appropriate A. Procaccia In the matter Central Company: