Adv. Gill Nadel, Moran Shmilovich A court paper is any document that can be transmitted or served, including a verdict, a notice, a demand, or a summons to a litigant or witness. Serving court papers properly has particular importance, and the judicialpower of the court depends on the court papers being served to the defendant in accordance with the law.
When the defendant is not located in Israel, the plaintiff can request permission to serve papers outside the jurisdiction area in accordance with ordinance 500 to the Civil Procedures Ordinances. But here a "legal trick" called "serving an authorized representative" comes to the aid of the Israeli plaintiff. Ordinance 482 (a) to the Civil Procedures Ordinances states that in an action regarding a business or workplace against a person who is not found within the jurisdiction of the court which issues the court paper, it is sufficient to serve the papers to a manager or an authorized representative who is, at that time, involved on behalf of that person in running the business or workplace in that jurisdiction. That is- papers can be given to an agent of the foreign company who is found in Israel.
The question of how to interpret the subject of serving papers to the authorized representative of a foreign company came up in a decision given 2/6/09 by the District Court of Tel Aviv-Jaffa (7028/09 Roni Katriel v. Comverse, decision given on 2.6.09, for the appellant- Advs. Manor and Shemesh, for the respondant- Adv. HaLevi). This verdict deals with a request filed by an employee of Comverse Israel, to approve a class action and an action against Comverse USA. The employee served the petition and the statement of claim to Comverse Israel as an authorized representative of Comverse USA. Comverse USA objected to the validity of the petition and the statement of claim, and also filed notice that the address of Comverse USA is not the offices of Comverse Israel, which is to say that the papers were served unlawfully. Among the claims of Comverse Israel was the argument that Comverse USA does not conduct business with Comverse Israel and is only a foreign holding corporation.
The District Court based its decision on the interpretive basis reached by the Supreme Court in 2652/94 Tendler v. Le Club Meditraina, in which it was ruled that a narrow interpretation of the ordinance should not be accepted:
"I do not agree to the narrow interpretation of the ordinance 482(a) which the District Court supported, an interpretation that does not fit the modern reality of a "small world" in which there are close bonds between different countries and in which modern communication allows whole-sale, simultaneous, and cheap transfer of information via telephone, facsimile, and other electronic means, almost from every place and to every place on earth. It is true that the court should not veer from the required procedural framework, as stamped in the ordinances, but within the bounds of these rules, the court still has a wide field to match them, via the proper interpretation, to the new reality."
The District Court emphasized the definition of "authorized representative" according to the words of the Supreme Court, that the idea "authorized representative" should not be understood in the technical meaning of an agent, but rather the deciding test for this question should be the existence of such a level of intensity of bond, between the representative and the defendant, in the framework of which it can be assumed that the representative will bring to the attention of the plaintiff the fact that proceedings have been filed against it. Accordingly, for example, in the past it has been permitted to serve a statement of claim against a plastics importer via his customs representative since the customs representative was seen as an "authorized representative" under ordinance 482(a), given the intensity of the bond between the customs representative and the plastics importer.
So what must be examined in our case is whether the petition to file the class action and the statement of claim were brought to the knowledge of Comverse USA in light of the nature of the bond between the representative, Comverse Israel, and the defendant, Comverse USA?
The question is examined in the decision and in light of the existence of several indicators it was ruled that this degree of intensity of bond exists between Comverse Israel and Comverse USA. The court noted that all of Comverse Israel's stocks are held by Comverse USA, and that the directors of Comverse Israel, except for one, are all senior functionaries with Comverse USA, all in addition to the use of the name Comverse. Accordingly, the court ruled that Comverse Israel did indeed transfer the court papers to Comverse USA.
It should not be forgotten that when papers are lawfully served to a foreign defendant, the court must weigh whether the Israeli court is the proper forum for the litigation to be conducted. Three tests are used to examine the question of whether the Israeli forum or perhaps some foreign forum is the proper forum to conduct the action: 1. Which legal forum has "the most linkages" to the disagreement? 2. What are the reasonable expectations of the sides regarding the place of litigation in a dispute that arose between them? 3. Public interests, principally what is the forum that has a real interest in conducting the action.
Decision: (T.A) 7928/09 Roni Katriel v. Comverse Technology, Inc (2/6/09).
On the subject of serving papers to an authorized representative, see also our article: "Serving papers to an authorized representative"- a legal trick to file action against non-Israel sides.
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