Legal Updates

One may make service of process in a shareholders’ dispute to the representative of the shareholder to the shareholders meeting

October 18, 2017

A company's shares were held by an Israeli company and two Chinese companies. The Israeli company opened a shareholders’ dispute against the Chinese companies and made service of process to one of them by handing it to a representative who came to Israel to visit the company offices and participate in the shareholders meeting as the representative of the defendant shareholder.

The Court held that when a sued party resides outside the territory of the State of Israel it is sufficient to furnish the claim documents to a person who has intensive relationship with that party, so that it is reasonable to assume that he will inform of the party of the proceedings taken against it.  Here it is a representative of the shareholders who came to vote on behalf of the shareholder at the shareholders' meeting, and therefore the delivery to him is binding on the shareholder.