The articles of association of a cooperative society that constitutes a monopoly in the field of copyright protection included an arbitration clause according to which in the event of a dispute between the cooperative and the creators, its shareholders, the cooperative will have exclusive authority over the manner of appointment and tenure of an arbitrator.
When a dispute arose between the cooperative and a shareholder, the Court decided to stay the arbitration proceedings and held that a uniform contract is a contract which terms (in whole or in part) were determined in advance by one party in order to serve as a basis for many contracts between it and individuals who are not definite in their number or identity. In general, a corporation's articles of association are not considered a uniform contract, however, there are exceptions. Thus, for example, where the true essence of the relationship between the members of the corporation and the management is essentially similar to that between a supplier and a client or between an employee and an employer. In order to review the relations one examines the extent of the influence of an individual member on the articles of association and the possibility of not being part of it. In this case, it was held that the setting of an arbitration mechanism per se does not constitute a depriving condition, however, the manner in which the arbitrator is appointed constitutes, under the circumstances, a depriving condition in a uniform contract as it impairs the equality between the parties in the dictation of the arbitration terms, especially in light of the fact that the cooperative is a monopoly. Therefore, it was decided to change the discriminatory condition and stay the arbitration proceedings unless the cooperative agrees to the appointment of another arbitrator.