OASIS

                        ORGANIZATION OF ADVOCATES SPECIALISING IN INTERNATIONAL SERVICES

ISRAEL 2010/2011

 ISRAEL DEVELOPMENTS 2010-2011

David Golan, Law Office of David Golan

         1.         Setting Aside an Arbitration Award

   1.1.         It is rare that an Arbitration Award is set aside on the grounds of "Public Policy".

The parties involved argued the case in front of the "Justice Tribunal" of the Orthodox Community to be heard and decided according to the Law of Arbitration.

The Arbitrators ruled that the Agreement between the parties was valid although it was illegal (unlawful coordination in a tender) and actually enabled the parties to defraud the Tax Authorities.

The District Court in Tel-Aviv set aside the award stating that it is against public policy to validate and enforce an illegal agreement. Para. 24 (9) of the Arbitration Act 1965 – 5725 authorizes the Court to set aside an Award the contents of which are contrary to public policy.

   1.2.         In C.A. 8078/10 Alrom v. Conforti, the Supreme Court ruled that although the Arbitrator ruled Ultra Petitum, the award is to be upheld since the parties, during the arbitration proceedings, widened the scope of the arbitration.

However, there is a dispute within the Supreme Court whether the award should be regarded as Ultra Virse in a situation where the jurisdiction of the Arbitrator has been widened.

         2.         "ORT" as a mark

 Ort Israel filed a claim against World Ort in order to prohibit World Ort from using the mark "ORT" in English and Hebrew in Israel.

World Ort did not dispute the good will acquired by Ort Israel while making use of the mark, but claimed that the right of use and goodwill belongs also to World Ort.

It should be noted that the mark was not registered as a trademark.

The District Court ruled in favor of Ort Israel stating that, although the mark has not been registered as a trademark, the proprietary rights belong to Ort Israel. The Supreme Court, however, allowed the appeal and dismissed the claim against World Ort.

The Supreme Court ruled that World Ort acted in Israel, side by side with Israel Ort, and that consequently both World Ort and Ort Israel acquired the goodwill and the proprietary rights to the mark.

Furthermore the Supreme Court ruled that there is no infringement of the Commercial Torts Law -5759-1999, since there is no danger of misleading the public to whom it would be clear whether an activity is being done by World Ort or Israel Ort.

In view of the above the Supreme Court allowed the appeal ruling that the appellant may use the name "World Ort" (only in English).

         3.         Taxation

Several tax amendments took place during 2010:

   3.1.         The Companies Tax was reduced to 25% and will be further reduced to 18% by 2016.

It should be noted that 12 years ago the tax was 36% (!)

   3.2.         A slight reduction was made in personal Income Tax, from 47% to 45% on annual income over $100,000. The aim is to reduce the Income Tax to 39% by 2016.

   3.3.         In order to tackle the steep increase in real estate prices, the treasury and  the Bank of Israel initiated the following steps:

3.3.1    The purchase tax on the purchase of a sole residential flat or house has been significantly reduced while the purchase tax on a second flat or house has been significantly increased.

3.3.2    There is a full tax exemption when selling a flat or house, provided that it is the sole flat or house owned by the owner, or when selling any flat or house every 4 years.

3.3.3    If one sells two flats or houses prior to 31.12.12, then a tax exemption is given on the first 2 Million NIS for each of the two flats or houses.

3.3.4    In order to encourage the purchase of real estate for the purpose of building residential flats or houses, there is a decrease on the rate of tax levied on the sale of real estate.

4         Miscellaneous

4.1     Obligation to reveal economic support given by a foreign political entity

In order to control the economic support given to anti Zionist parties and hostile organizations, the Knesset passed a law that obligates any society or organization receiving donations or support from foreign political entities to reveal to the Registrar full details regarding said donation or support.

4.2         Recent developments regarding "Yeshiva Boys".

The government has finally reached a decision that is more of a compromise than a decision. “Yeshiva Boys” between the ages of 18 – 21 (about 5,500 boys) will gradually enlist in the army for 3 years, combining studies in the "Yeshiva" for a certain period.

“Yeshiva Boys", who are older than 22 years old, may be exempted from serving in the army on condition they serve one year in civil service (hospitals etc.).

4.3         Intellectual Property – At last, Israel joined the Madrid protocol.

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