The District Court of Tel Aviv recently held that the Israeli courts gained jurisdiction when a statement of claim was served in Israel on the vice-president of a foreign company.
In a previous decision in this matter, the Court had rejected the Israeli company Premier's request to serve a claim against the foreign company Amazon outside of Israel, citing an insufficient cause of action. While this matter was pending, Amazon's vice-president arrived in Israel to attend a conference. During his visit, Premier succeeded in serving him with a statement of claim. Premier claimed that the service on Amazon's vice-president amounted to service on Amazon itself, considering the vice-president's high rank in the company. Premier further claimed that because service had been in Israel, the Israeli courts had gained jurisdiction over the matter. In the previous decision the Court disagreed, holding that Premier's service in Israel had been used to circumvent the Court's decision to reject Premier's application to allow service outside of Israel. The Court noted that the way for an Israeli court to gain jurisdiction over a foreign entity is through applying for consent to serve abroad, rather than by serving senior management during their visits to Israel.
In overturning the previous decision, the Court held that in the present case, service within Israel was not only legitimate, but also sufficient to grant the Israeli courts jurisdiction over the matter, and that Premier's service on Amazon's vice-president during his visit to Israel was not an abuse of court proceedings.
The Court held that Premier had met the "proximity" test, pursuant to which there must be a sufficiently close relationship between the recipient of served documents and the company for which service is intended. The Court noted that a company's vice-president, in its capacity as senior management, can provide a company with awareness of the filing of a law suit. Therefore, service on the vice-president in the present case was synonymous with service on Amazon. The Court noted that if, in contrast, service had been to a junior employee, this would not have passed the "proximity" test and service on the individual would not have amounted to service on Amazon.
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