Civil Appeal Authority 66369-02-25 Tai Investment and Trade Ltd. v. Gideon Fishman and 29 others - part 9

Judge Alex Stein:

I agree.

Judge Khaled Kabub:

1. I have examined the reasoned opinion of my colleague Justice Mintz, and I agree with its strong reasons and arguments, as well as with his final conclusion, according to which the required result in our case, according to the letter of the law, is the acceptance of the appeal while cancelling the District Court's decision regarding the addition of Lifshitz to the arbitration proceeding.  At the same time, I also share the concern that my colleague points out in his opinion, that the result we have reached will allow, in certain cases, the exploitation of the company's separate legal personality - in order to evade the prior consent that was given to resort to arbitration proceedings.  I will add a few words to this regard.
2. As is well known, the institution of arbitration was established against the background of a legal policy that seeks to encourage the existence of an efficient and fair system for resolving disputes, especially disputes characterized by a rapid pace, outside the walls of court. Incidentally, a dual goal is achieved: both to ease the great burden on the courts, and to promote the private interest of the litigants.  The promotion of the parties' private interest stems from their ability to shape the procedural rules in the proceeding and the framework of the powers given to the arbitrator.  This is without limitation to the substantive law, the procedures and the rules of evidence (Civil Appeals Authority 3024/18 TMF Media Force Limited Partnership v.  Nachmani Tsafrir Ltd., para.  13 [Nevo] (June 12, 2018); Civil Appeal Authority 3680/00 Gamlieli v.  Magshimim Cooperative Village for Agricultural Settlement Ltd., IsrSC 57(6) 605, 617 (2003)).  Thus, the arbitration institution allows "litigants who prefer it to clarify their dispute outside of the courts," through a fast, efficient, flexible, and discreet procedure (Uri Goren Arbitration 17 (2018)).
3. Abuse of the corporate veil in order to evade prior consent to the use of an arbitration proceeding as a dispute resolution mechanism, under the auspices of the linguistic interpretation of the law and the application of case law, may be a chilly breeze toward the arbitration process, and harm the important incentive that litigants have to resort to such a proceeding. As stated, the arbitration proceeding, by its very nature as a procedure designed by the parties, is intended to bring about a quick and viable solution between parties caught up in the dispute, while reducing costs and keeping it non-public.  In a situation in which the concern described above about the unfair use of the incorporation veil intensifies, parties may exclude themselves from the arbitration process, in the first place, and thus the will of the legislature will also be thwarted.
4. Therefore, in my opinion, it is right to turn the spotlight on the solution proposed by my colleague to alleviate this concern, arguing that "insofar as there are indications of personal consent on the part of that party who did not sign the arbitration agreement, its addition to the proceeding can be done by virtue of the first circle." In this context, I would like to emphasize that indeed, in order to prevent the same manipulative use of the corporate veil, in situations where it is claimed that such consent was given, the court must carefully examine and exhaust the alleged indications of the existence of that consent, which may be explicit or implied (Civil Appeal Authority 1249/12 Leader Management and Development in Tax Appeal v. Sharbat Malkiel & Sons La'am Ltd., paragraph 16 [Nevo] (05.04.2012)).