Accordingly, in my opinion, a loose or artificial connection to the subject matter of the claim should not suffice, and a substantive connection is required. At the same time, care must also be taken against giving an excessively precise and restrictive interpretation to the "matter" of the subject matter of the claim or to matters in respect of which the representative was authorized to represent the foreign defendant in Israel. Such an interpretation is liable to sin against a purpose that has been recognized from the outset as well as the possibility of acquiring authority through a constructive presence - which is, as we recall, the need to "catch up" with the global trend regarding the activity of cross-border corporations and to apply international authority to international companies that also operate in Israel."
- As stated, according to respondent 2, it is not a subsidiary of respondent 1, there are no ownership or control relations between them, there is no identity between the shareholders or managers, and the respondent has no managerial, legal or regulatory status with respondent 1, and the trial court based its determinations on this.
The trial court reasoned its decision by saying that apart from a technical and service relationship, as emerged from the testimony of the respondent's representative, the applicant was unable to prove additional connections such as joint ownership, corporate identity, legal contractual relationship and ongoing managerial relationship, and the applicant did not even seek to clarify these matters at the hearing.
- However, the requirement to prove affiliations, such as joint ownership or corporate identity, has no mention in Regulation 163(c) or even in the extensive case law in relation to that regulation. In the Supreme Court's rulings, it was explicitly clarified, more than once, that there is no need for joint ownership or corporate identity between the foreign corporation and a representative in Israel. Thus, for example, in Civil Appeal 49056-09-25 Cloudflare Inc. Estate of the late Anonymous et al. [Nevo] (December 15,2025), the application for leave to appeal by a foreign company against a decision that determined that an Israeli company should be considered a representative for the purposes of invention was rejected, while the argument that proof of the existence of a "corporate relationship" is required in order to meet the conditions set out in Regulation 163(c) was rejected, and even the alternative argument that the standard for proving them in the absence of such a relationship is higher. It was held that indeed, a corporate relationship between a parent company and a subsidiary may indicate the existence of a significant relationship between the two companies, but, just as this is not sufficient to indicate the fulfillment of the conditions of Regulation 163(c), this does not indicate their non-existence (see also the Taro case and the Microsoft case). In the aforementioned Cloudflare case, the first instance found that the Applicant entered into an agreement with the Israeli company for the provision of support or management services of its products and services vis-à-vis the end customers, and that there are many other indicators that attest to the existence of a continuous and ongoing business relationship between the two. Based on these findings, the first instance determined that there was a test of the "intensity of the relationship" between the two companies.
- As to the "legal contractual" relationship that the trial court held was not proven - since it was explicitly declared by the CEO of Respondent 2 that it provides customer service and support to Respondent 1's customers, it is clear that there is a legal contractual relationship between the two companies.
Moreover, significant evidence presented by the Applicant in the Trial Court in support of her arguments is the email message she received from Respondent 1, when she contacted her directly, on August 4,2023, on the recommendation of Respondent No. 2, with a request to release her funds - this after the Honorable Justice Baum received Respondent No. 2's explanations that she could not assist, despite her declarations on the basis of which a judgment was given by consent.