With regard to alleged violations of the Competition Law within the framework of an international cartel that has also caused damage in Israel, the case law discusses the possibility of applying Israeli law, inter alia, through the doctrine known as the "Influence Doctrine." This doctrine establishes a basis for the extraterritorial applicability of domestic law to those whose conduct constitutes a violation of domestic competition law and has led to anti-competitive influence within the country whose law is sought to be applied. However, the question of whether and under what conditions this doctrine will be applied within the framework of Israeli law has not been discussed or decided in the Supreme Court's ruling. In this situation, when a dispute is abandoned between the parties on the question of the fulfillment of the conditions for the application of the doctrine and the applicability of Israeli law by virtue of it, for the purpose of concluding that a cause of action has been proven for the purpose of an invention outside the boundaries, it is sufficient that there is a possibility, at the level of a "serious question that is not an idle claim" (as required for the purpose of proving a cause of action, a threshold, which, as recalled according to case law, is lower than the threshold of a "claim worthy of argument" required in relation to the cause of invention) that will be determined in the main proceeding that the doctrine will apply. In view of the aforesaid, the case law also held that the factual and legal clarification required for the purpose of examining the applicability of the effects doctrine must be conducted within the framework of the main proceeding, and not in the framework of interim proceedings, including the invention proceeding (see, inter alia, Civil Appeals Authority 6646/19 R.L.P.I. Agriculture Ltd. v. MAN Truck & Bus AG, (October 12, 2021), paragraph 15, where the Honorable Justice Baron ruled that a decision on the question of the application of the effects doctrine is not required at the preliminary stage of document discovery, and that it should be clarified during the hearing of the motion for approval on its merits; It should be noted that in a class action proceeding, for the purpose of granting a request for discovery of documents, the applicant must lay a preliminary evidentiary basis to substantiate his request, Where "the standard for proving this condition is not limited to the fact that the application for certification is not an idle application" (ibid., para. 14); for the application of this ruling in the context of the law applicable to an extraterritorial invention, see, inter alia: Civil Appeal Authority 1152/20 Royal Philips Electronic N.V. v. Itay Lenoel (July 20, 2021), at paragraph 10; Class Action (Center) 14590-12-22 Ofer Lahan v. KIA CORPORATION (March 15, 2024), at para. 18; Class Action (Center) 13436-01-22 Alexandra Gelber v. Flo Health Inc. (June 20, 2024), at paragraph 18). In this context, it should be noted that I do not accept the Respondent's argument that in our case the conclusion that the doctrine of effects does not apply is a simple and clear conclusion.
- It follows from the compilation that the dispute that arose between the parties on the question of law began to be clarified in the main proceeding, and at this stage it is sufficient that the Applicant has met the burden of proving that there is a possibility, at the level of a serious question, that it will be determined that the applicable law is the Israeli Competition Law, by virtue of which there is no dispute that the Applicant has shown that he has a cause of action at the level required at this stage of the proceedings.
Forum Adequacy
- The Respondent argued that the court in Israel is not the proper forum to hear the proceeding. In this context, it was argued that the burden of proving the adequacy of the forum is on the applicant and that the tests set out in the case law lead to the conclusion that this court is not the proper forum to hear the proceeding. Thus, most of the connections to the proceeding are not to Israel - the Respondent is a company that is based in Japan and does not sell the components that are the subject of the cartel in Israel, and even its customers and its customers' customers do not sell their products themselves in Israel and the engagement with them is subject to the regulations and laws of the countries in which they operate; The witnesses who will be required to testify are foreign residents who do not speak or read Hebrew; And the substantive law that applies to the proceeding is not the Israeli Competition Law. It was also argued that the Applicant did not prove the existence of damage to consumers in Israel, which is the only connection on which his application is based. The Respondent further argued that an examination of the expectations of the parties also leads to the conclusion that the Israeli forum is not the proper forum, especially when the Respondent was not involved in the sale of the products in Israel. With regard to public considerations, it was argued that when the cause of action stems from components that were incorporated into products sold to Israel, the matter to hear the proceeding is that of the legal system where the agreements were reached or the components were sold, and not of the court in Israel. Therefore, it is argued, all the tests and considerations clearly indicate that Israel is not the proper forum to hear the claim.
I am unable to accept the Respondent's arguments.
- As the Respondent rightly argued, the case law established three tests that are used for the purpose of examining the appropriate forum for the hearing of the claim: (1) which forum has the most connections to the dispute; (2) What are the reasonable expectations of the parties with respect to the place of litigation in the dispute; (3) What are the public considerations on the agenda, and especially which forum has a "real interest" to discuss the claim. At the same time, it was held that only when the balance between the affiliations to the Israeli forum and the affiliations to the foreign forum clearly leans significantly toward the foreign forum, will the Israeli court decide that, although it is authorized to hear the claim, it is not the appropriate forum to hear it (see, for example, Civil Appeal Authority 928/18 De Neef Construction Chemicals BVBA v. Gilar Ltd. (May 15, 2018), in paragraph 17 of the judgment, on the case law cited therein). It was further held that over the years there has been a decline in the status of the improper forum doctrine following the development of international means of communication and means of transportation in the age of globalization (Civil Appeal Authority 2705/97 Gypsum A. Sinai (1989) Ltd. The Lockformer Co., IsrSC 52(1), 109 (1998), however, it cannot be said that this is a doctrine that has become obsolete (Civil Appeal 2547/23 Office Textiles Ltd. v. Broklinen Inc Delaware (28.12.2023(). The improper forum doctrine does not negate the court's authority, but rather determines when the court will refrain from hearing the proceeding, even though it is authorized to hear it.
- An examination of our case according to the auxiliary tests set out in the case law shows that the Israeli forum is the appropriate forum to hear the claim.
As for the test of most affinities, there are certainly real connections that ostensibly point to forums other than the Israeli forum as an appropriate forum to discuss the dispute, taking into account that the Respondent is a Japanese company (as well as the other Respondent who was a partner in the cartel), the prohibited actions were allegedly carried out in Japan, and most of the segments of the value chain through which the damage allegedly passed to the Israeli consumer, are outside of Israel (but most of them are not even in Japan, except in the United States or other countries in Asia). The decisions on which the Applicant seeks to be based with regard to the alleged cartel and the Respondent's involvement in it are also decisions of foreign authorities or foreign tribunals. At the same time, since there is no doubt that this is a cartel, whose effects transcend continents, and it is not for nothing that proceedings have even been conducted in various countries (see paragraphs 83-117 of the application for approval, and Appendices 19-29), it is difficult to say that there is a single foreign forum to which the most affinities are clearly inclined.