"The doctrine of lifting the veil is based on the principle that, under certain conditions, the court may also attribute a debt of the company to a shareholder therein, provided that defined conditions are met for this purpose in the law and case law (section 6 of the Companies Law, 5759-1999, and an amendment to this law from 2005). In order to establish a shareholder's liability for the company's debts despite the existence of a separate legal personality of the company, it is necessary to establish a complex legal cause of action both from the legal aspect and on the factual level. Such a cause of action is not naturally derived from the original cause of action in the action that was directed against the company, which concerns the debt alleged against it. It is not possible to add to the arbitration with nonsense the cause of lifting the veil and to add additional parties to the arbitration proceeding, against whom a claim of personal liability for the company's debt by virtue of the lifting of the veil is alleged when it is a matter of arbitration proceedings based on an agreed-upon arrangement between the parties, and when the additional cause and the joining of the parties clearly deviate from the agreement given" (ibid., para. 20; emphasis added).
The second is that this argument is also inconsistent with the principle of consent in arbitration law and with the purpose of the Third Circuit. As stated above, the Third Circle of Expansion seeks to trace its substantive consent to the arbitration proceeding of the party whose addition is requested. However, it is highly doubtful whether the question of consent to the proceeding can be studied in terms of Conditions for lifting the veil according to Section 6(A) to the law. It is not inconceivable that the set of facts that will be the basis of the arguments for justifying lifting the veil will be different and separate from the set of facts on the basis of which the question of consent to the arbitration proceeding will be decided (and in this context compare to the aforementioned words of the judge Procaccia In the matter Central Company). For this reason, too, I do not believe that a claim for a full lifting of the veil - however well-founded - justifies in itself the inclusion of the shareholder in the arbitration proceeding. This is all the more so in cases where the claim of a full lifting of the veil is placed next to a personal cause that the opponent has against the shareholder (Further Discussion 7/81 Fender, Open & Building Investment Company inTax Appeal Castro v.IsrSC 37(4) 673 (1983); Civil Appeal 1569/93 Maya v. Penford (Israel) Ltd.IsrSC 48(5) 705 (1994); Interest Nashashibi; David Mintz "Studies of the liability of officers of a corporation in insolvency and its justifications" The Book of Miriam Naor 571, 584 (2023)) - Because in such a situation, the fact that the conditions for lifting the veil against the shareholder are met cannot provide justification for clarifying his liability Personal in an arbitration proceeding against the company.
- If so, in view of the variety of reasons aforesaid, I do not believe that section 6(a) of the Law is relevant to the question of whether or not there is room to add a party to an arbitration proceeding.
- Alternative 2 - Section 6(c) of the Companies Law - For reasons similar to those stated above, I also do not believe that the alternative in section 6(c) of the Law serves as a possible channel for the purpose of joining a party to an arbitration proceeding. In this context as well, joining an arbitration proceeding does not fall within the scope of the cases dealt with in this section - the suspension of a shareholder's right to a debt from the company until its debts to its other creditors are repaid - and even if a party to the proceeding claims that the conditions for deferring the shareholder's debt are met, this does not justify joining the proceeding.
- We are therefore left with alternative 3 - section 6(b) of the law. At first glance, one might think that this section is appropriate for cases such as this. This is also the opinion of the District Court in our case. However, a careful examination of the language of the section and the rulings of this court casts a heavy shadow on this conclusion. As detailed above, Section 6(b) of the Law allows the attribution of an attribute, right or obligation from a shareholder to a company, as well as the attribution of a right from the company to a shareholder. Therefore, in order to determine that this section can be used for the purpose of joining a party to an arbitration proceeding, it is necessary to examine whether an arbitration clause is a feature, right or obligation within the meaning of section 6(b) of the Law. However, an examination of case law shows that a "trait" refers to matters relating to the identity or characteristics of its owner (see, for example: Civil Appeal 2773/04 Nitsba Settlement Company in Tax Appeal v. Atar, IsrSC 62(1) 456, 494 (2006-2007); The Bat Yam faction, p. 696; Civil Appeal 218/96 Iskar in Tax Appeal v. Discount Investment Company Ltd., para. 29 [Nevo] (1997); High Court of Justice 430/89 Maor Signage and Outdoor Advertising in Tax Appeal v. Kfar Saba Municipality, IsrSC 44(3) 269, 270-271 (1989); Civil Appeal 417/79 Marcus v. Hammer, IsrSC 37(2) 337, 353 (1983); see also: Licht, pp. 69-70), so it is clear that an arbitration clause cannot be classified in this way. In addition, this Court has already given its opinion as to the possibility of classifying an arbitration clause as a right or an obligation, holding that:
"It has already been said about the arbitration clause in the contract that such a clause is not like the other clauses in the contract that impose obligations or confer rights on the parties [...]. Essentially, it is not a mechanism established by the parties to resolve a dispute or to settle disagreements that have arisen between them, and it does not have an obligation on one side or a right to the other. Such an arbitration clause should not be inserted between duties and rights, and for the purpose of this distinction it is only a neutral provision" (Civil Appeal 256/63 "Atlantic" Fishing Company in Tax Appeal v. Rubin, IsrSC 18(2) 294, 297 (1964) (emphasis added); see also: the Brimer case, para. 23).