On December 2, 2024, additional clarifications were requested from the Respondent relating to the Electronic Signature Law, and the Respondent submitted its clarification on December 23, 2024. The Applicant's response to these clarifications was submitted on December 25, 2024.
The Applicant's Arguments
- The Applicant's arguments are divided into two. Its main argument relates to the possibility of signing a promissory note digitally, and executing it in a track designated for banknotes in accordance with the Execution Law, 5727-1967 (hereinafter: the Execution Law) and the Execution Regulations. According to her, already in the current state of affairs, these bills can be redeemed at the Writ of Execution like any regular bill. The second argument relates to the Respondent's conduct, and its decisions to prohibit the execution of an electronically signed deed in a proceeding intended for promissory notes, in deviation from authority and in accordance with procedures that are not published to the public.
- The Applicant points out that the Electronic Signature Law states that the admissibility of a signature will not be denied merely because it is electronic in circumstances in which the purposes of the signature requirement under that legislation are met. It also notes that there is no specific exception or arrangement in the Electronic Signature Law in connection with banknotes. Hence, an electronic signature fulfills the signature requirement set forth in the Banknotes Ordinance, and we are dealing with a note for all intents and purposes, which can be performed in a proceeding intended for banknotes in the Execution Bureaus.
The Applicant detailed the purposes underlying the signature requirement in the Promissory Notes, and explained that these are consistent with the essence of the digital signature. It discussed the distinction that must be made between the classification of a document as a promissory note, since it is digitally signed, and the defense arguments that can arise in connection with it, and referred to the possibility of identifying the signatory as well as the possibility of forging an electronic signature.
- With regard to the physical dimension of the note, which constitutes a central reason for the Respondent's position, the Applicant clarified that the Check Clearing Law, the Appeal to the Committee - 2016 (hereinafter: the Check Clearing Law) has long recognized the computerized output of a check as one that replaces a note. She clarified that even where a bill is signed electronically, this does not negate its physical dimension, but rather that its signature is electronic. The Applicant also noted that the Banknotes Ordinance does not explicitly require physical possession of the note, and also mentioned the interpretation of the term "written" in the Interpretation Law, 5741-1981, in a manner that allows, in her opinion, an electronic signature as well.
The Applicant emphasized that the Respondent also clarified that the issue of digital signature on banknotes is currently being examined positively, and therefore there was no reason to reject her appeal at all.