Civil Appeal Authority 17685-01-26 Arkia International (1981) Ltd. v. Lior Bondravsky

Civil Appeal Authority 17685-01-26

Judgment

Judge Alex Stein:

Our Sugya

1. Section 6(a)(2) of the Aviation Services Law (Compensation and Assistance due to Flight Cancellation or Change in its Conditions), 5772-2012 (hereinafter: the Aviation Services Law or the Law), grants a passenger whose flight was canceled the right to choose between refunding the consideration he paid for the ticket and receiving an alternative flight ticket. Does the passenger's failure to inform the passenger of his right to choose between the alternatives - and consequently, the failure to exercise one of them - constitute grounds for awarding exemplary damages within the scope of section 11(a) of the Law?

Copied from Nevo

2. This is the issue in which we are required to decide within the scope of the application for leave to appeal in this case. This request relates to the judgment of the Jerusalem District Court (Justices   Shaham, A.  Rubin andD.  Gidoni), which was granted on November 7, 2025 in Other Municipality Applications 70166-06-25, in which the Applicants' appeal against the judgment of the Beit Shemesh Magistrate's Court (Judge E.  Yehezkel) was partially accepted, which was given on April 22, 2025 inCivil Case 37570-04-22.

Background and Previous Proceedings

3. On January 29, 2022, flight IZ 776 was scheduled to take off from Grenoble, France, to Tel Aviv. Applicant 1 is the flight organizer and Applicant 2 is the flight operator (hereinafter collectively: Arkia).  The passengers were unlucky, and the flight did not leave until the next day.  There is no dispute that the flight was postponed close to the scheduled departure time, without prior notice to the passengers on the flight.
4. After the flight was canceled, passengers were provided with food, beverages and accommodation services only partially; In addition, Arkia did not provide passengers with a choice between restoring the consideration paid for the ticket for the canceled flight and receiving an alternative flight ticket.
5. According to Arkia, the flight was canceled due to a combination of circumstances that included a car accident in the vicinity of Grenoble airport, as well as an illness of the pilot who was in charge of the flight. For this reason, Arkia was of the opinion that the restriction set out in section 6(e)(1) of the Aviation Services Law was met in a manner that exempted it from paying the statutory compensation prescribed in the law, which in this case stood at ILS 2,120.

The Magistrate's Court's Judgment

6. The Magistrate's Court accepted the Respondents' claim and ordered the Applicants to pay compensation. With regard to statutory compensation under section 6(a)(3) of the Law, the court rejected the Applicants' argument that the delay stemmed from special circumstances beyond their control, and therefore they are exempt from payment of compensation under Section 6(e)(1) of the Law; In this regard, it was held that the Applicants did not meet the evidentiary burden when proving that the flight was canceled in light of a road accident or the pilot's illness, and did not show that these circumstances - even if they were proven - had the power to exempt them from paying statutory compensation.
7. It was further held that the failure to grant statutory compensation, deficiencies in the provision of assistance services, and the failure to provide the option of choosing between returning the ticket and receiving an alternative flight ticket, justify a model compensation award by virtue of section 11(a)(1)(b) of the Law. This is because this section authorizes the court to award compensation without proof of damage for a violation of the provisions of section 6 of the law, which deals with the provision of benefits to a passenger whose flight was canceled, if it is found that the violation was done "knowingly".  The court rejected the applicants' argument that the law does not require them to take active action of offering a choice between restitution and receiving an alternative ticket, and that they must grant an option only to passengers who have requested it.
8. As a result of these determinations, the Magistrate's Court awarded each of the respondents compensation consisting of the following components: (a) statutory compensation in the amount of ILS 2,120 by virtue of section 6(a)(3) of the Aviation Services Law; (b) Exemplary compensation in the amount of ILS 2,500 (respondents 18, 19 and 47 were awarded ILS 3,500) in accordance with the provisions of section 11(a)(1)(b) of the Law. It was further determined that the Applicants would bear the Respondents' expenses in the sum of ILS 33,623 and attorney's fees in the sum of ILS 35,000.

The District Court's Judgment

9. The District Court partially accepted the Applicants' appeal against the Magistrate's Court's ruling, and ruled that ILS 1,500 should be deducted from the exemplary compensation awarded in favor of each of the Respondents.
10. The District Court rejected the Applicants' argument that in the present case there were special circumstances beyond their control, as set out in section 6(e)(1), and ruled that this claim had not been sufficiently proven. Therefore, it was found that there is no reason to intervene in the statutory compensation component determined in the judgment of the Magistrate's Court.
11. With regard to exemplary damages, the District Court accepted the Applicants' argument that the existence of a sincere dispute as to the obligation to pay statutory compensation weakens the justification for awarding exemplary damages for non-payment of statutory compensation.
12. At the same time, the Applicants' argument that it is not possible to award exemplary compensation for not offering the option of choosing between an alternative flight ticket and refund of consideration was rejected. In relation to this, the Applicants referred in their arguments to the judgment given in Other Municipal Applications (Central Districts) 44574-05-24 Arkia v.  Kokia (February 13, 2025) (hereinafter: the Kokia case).  In the Kokia case, it was held that the interpretation of the Aviation Services Law leads to the conclusion that there is no room for awarding exemplary damages for failure to inform a passenger of the possibility of choosing between an alternative ticket and the return of consideration - where there is no argument that if the passenger had known about his right to choose between the alternatives, he would have chosen another alternative.  On the other hand, in the judgment that is the subject of the application, the District Court noted that it holds a different opinion than that held in the Cuckoo case.  According to the District Court, the breach of the duty to offer a choice between restitution and an alternative flight ticket is included among the breaches that are entitled to exemplary damages by virtue of section 11(a)(1).  In addition, the ruling in the Kokia case that the imposition of exemplary compensation for this violation may be considered only in a situation where it has been proven that if the passenger had known about the right to choose, he would have chosen the other alternative that was not offered to him.  It was determined that the very infringement - ipso facto - entitles the passenger to exemplary compensation.  Therefore, given the fact that the Applicants breached this duty, the District Court reached the conclusion that there was no defect in their obligation to pay exemplary damages in relation to the non-offer of an option.
13. At the end of the day, the District Court ordered a reduction of ILS 1,500 from the exemplary compensation amount awarded to each of the respondents. It was further determined that in view of the partial acceptance of the appeal, no order for costs would be made.
14. Hence the application for leave to appeal before us.

The parties' arguments

15. According to the Applicants, the District Court erred in leaving in place an exemplary compensation award due to the failure to provide a choice between an alternative flight ticket and the return of consideration.
16. The Applicants rely on the decision given in the Kokia case; they claim that the District Court justified its ruling in the present case by saying that section 14 of the Law establishes a duty to inform passengers in advance of their rights, while section 6(a)(2) applies after the cancellation of a specific flight. In the Applicants' position, the District Court erred in this interpretation because section 14(b) establishes a duty to inform after a qualifying cause exists in relation to a specific flight.  The Applicants, therefore, are of the opinion that we are dealing with two separate duties: the obligation to inform the passenger of his rights (set forth in section 14(b) of the Law), and the obligation to grant the passenger an alternative flight ticket or refund of consideration, according to his request (set forth in section 6(a)(2) of the Law).  Since section 11 of the Law, which authorizes the court to award exemplary compensation, establishes a closed list of sections that does not include section 14, the Applicants are of the opinion that it is not possible to award exemplary compensation for a breach of the duty to inform on its own.
17. The Applicants further claim that the District Court did not give sufficient weight to the fact that exemplary compensation is punitive compensation, which is reserved for extreme and exceptional cases. It was also argued that it was not proven that the passengers would have chosen to return the flight ticket that was offered to them, and that the matter was not taken into account in determining whether a breach had been committed that would allow for an exemplary compensation award.
18. According to the Applicants, in view of the contradictory ruling between the judgment that is the subject of the application and the judgment in the Cukia case, and in the absence of a binding rule on the subject, we are dealing with a fundamental and substantive question that deviates from the parties' individual interest. This question of principle and the need to put the precedent on the subject on the ground justify, according to the Applicants, the granting of leave to appeal "in a third incarnation" while giving preference to the interpretation given in the Cuckoo
19. On January 15, 2026, I ruled that the application for leave to appeal requires an answer, and I instructed the respondents to submit their response to the application. On January 28, 2026, respondents 71-73, who are not represented, submitted their response to the application; On January 29, 2026, respondents 4 and 14, who are not represented, submitted their response to the application; On February 1, 2026, Respondent 91 - who is also not represented - submitted his response to the application; On February 25, 2026, a response was submitted on behalf of Attorney Eyal Avidan, who represented the respondents in the preliminary proceedings, and who still represents 72 respondents in the current proceeding.  The remaining respondents - who, as far as is known, are not represented - did not submit answers on their behalf.
20. 00The position of the respondents represented is that the application for leave to appeal should be granted; however, the law of the appeal itself is to be rejected. According to them, the judgment given in the Kokia case is erroneous.  This judgment - so it is argued - nullifies the possibility of choice, which, as stated, was granted to passengers in section 6(a)(2) of the Law, and it contradicts other judgments in which exemplary damages were awarded for deprivation of the right of passengers to choose between restitution of consideration and an alternative flight ticket.

0

21. It was further argued that in order for a passenger to be able to exercise his rights by virtue of the law, he must know about the existence of a right to vote from the outset; Therefore, the respondents are of the opinion that the Applicants' argument regarding the separation between the duty to inform of the right to vote and the duty to provide this right in practice, is an artificial separation. In addition, the respondents are of the opinion that the granting of an exemption from exemptions - despite the violation of the passenger's right to choose between the alternatives - is contrary to the consumer purposes underlying the law, and is capable of encouraging unlawful conduct on the part of flight operators and their organizers.  The respondents further argue that section 14 of the law technically determines how the duty to inform is to be fulfilled, but it does not establish a substantive duty concerning the granting of the right to vote to passengers, which, according to them, is learned from section 6 of the law.
22. It was also argued that the determination in the Kokia case, according to which the entitlement to exemplary compensation arises only when the passenger convinces the court that if he had known about the option he would have acted differently, is a determination that has no basis in the language of the law. The respondents further add that there is no substance to this determination, since the damage caused as a result of the failure to offer an alternative is an infringement of the passenger's autonomy.  In the opinion of the respondents, this approach imposes on the passenger the burden of knowing in advance the right of choice granted to him, and demanding its positive realization from the airline.
23. In order not to repeat arguments that have already been detailed at length, it should be stated in summary that respondents 71-73 are of the opinion, inter alia, that there is no reason to grant leave to appeal in this case, since this case does not raise any legal question of principle that should be clarified in the framework of an appeal "in a third incarnation"; that the Applicants knowingly violated the law; and that there is no room for a further reduction in the amount of compensation. On the other hand, respondents 4, 14 and 91 are of the opinion that this case justifies a decision by the court while rejecting the position established in the Cuckoo case; that it is possible that some of the passengers would have chosen to refund consideration instead of providing a flight ticket, but they were denied this option; that the purpose of the law supports the Respondents' position; and that the interpretation of the law established in the Cuckoo case allows the flight operator to confront the passenger to a fait accompli while denying his right to choose.  without this being considered a violation of the benefit itself.

Discussion and Decision

24. After reviewing the writings placed before us, and after considering the arguments of the parties, I have come to the conclusion that we would do well to hear this application as an appeal within the framework of our powers under Regulations 149(2)(b) and 138(a)(5) of the Civil Procedure Regulations, 5779-2018. I would also suggest to my colleagues that we dismiss the appeal on its merits, as detailed below.
25. As stated, the legal question that is brought before us in the framework of this proceeding is whether the passenger's failure to inform him of his right to choose between the alternatives - and as a result, the failure to exercise the alternative desirable from his point of view - constitutes grounds for awarding exemplary damages under section 11(a) of the Law.

This question splits into two sub-questions, as follows:

1. The first is that a flight organizer and operator have an active duty to inform a passenger whose flight was canceled and that he has the right to choose between refunding consideration and an alternative flight ticket?
2. The second - given that there is such an obligation - is it possible to award exemplary damages for its breach?

I will now discuss these questions in order.