Service of Statement of Claim Outside of Israel – Recent Judgment

Adv. Gill Nadel, Keydar Hallay

A decision was recently issued by the Central District Court ruling that under
special circumstances, serving a brief of claim to a Palestinian importer via his
customs agent will be acceptable service of papers.

The facts of the case and the claims of the parties:

The plaintiff corporations own trademarks registered in and out of Israel

protecting the names "Dragon Ball" and "the original Bakogan game", and are
also engaged in the production of a successful children's television show,
and the manufactory of toys and games for children.

The action involved breach of the plaintiff's copyright by a Palestinian importer

from Hebron, whom they claimed dealt with importing, distributing, selling, and
marketing counterfeit Bakogan and Dragon Ball games. Another defendant in
the proceeding is the State of Israel- the Customs Branch,which seized the
goods when they were imported to Israel around a year before the court's
decision in this case and therefore held the goods while the proceeding was
being litigated since they had been seized by it.

The plaintiffs requested that the importer be ordered to cease and desist all
activities related to the counterfeit games, and also sued the importer for a
monetary payment of 100,000 NIS. The plaintiffs further requested that the
Customs Branch be ordered to destroy the counterfeit games.

The foreign corporations had trouble delivering the brief of claim to the
importer's residence in Hebron, and therefore they delivered the brief of claim
to the Israeli customs representative handling the release processes, claiming
that it was impossible to serve briefs of claim in the Palestinian Authority. In
doing so, the plaintiffs relied on the Civil Procedure Regulations that allow
court papers to be served to a defendant in the Palestinian Authority via a
"commercial licensee" residing in Israel. The term "commercial licensee"
describes a person or entity who is a partner in managing the defendant's
business or the level of whose connection with the defendant is so intense
that it can be assumed that he would notify the defendant that a suit has been
filed. In this case, the foreign corporations claimed that such a connection
exists between the importer and his customs agent. The Palestinian importer
did not defend himself in court.

When the court was first asked to issue a decision in the absence of defense,
the court rejected the petition, since the brief of claim had been delivered to
the importer's customs representative rather than the importer himself. The
court ruled that a customs representative cannot be considered as the
"commercial licensee" of the importer, since the license given to the customs
agent by his client is limited to the actions of releasing the products from
customs only, and this is not enough to constitute appointment to "commercial
licensee". The court ruled that in this case, it was not proved that at the time
the action was filed there was strong communication between the importer
and the customs representative (even if in the past, during the release
process, the sides did indeed hold communications).

The plaintiffs were not satisfied with the decision and filed a petition for re-
examination. In this petition, they argued that they translated the brief of claim
into Arabic and even tried to hand the brief of claim in Hebron, but due to
security circumstances they were not able to do so. The plaintiffs claimed that
based on the questions asked by the customs representative, the latter
informed them that he delivered the brief of claim to the importer's agent, who
made his way to the customs agent to collect documents. Therefore, the
plaintiffs claimed that there is no doubt that the importer knew of the action
against him even if they did not succeed in delivering the brief of claim to his
residence in Hebron, and therefore they requested that the action be
accepted inspite of the absence of defense.

The Court's Decision

In light of the above, the court ruled that the cumulative weight of the evidence
presented, including the handing of the brief of claim to the customs
representative, the customs representative's notice that the brief of claim had
been delivered to an agent of the importer, and the long period of time that
had passed since the goods had been held by Customs, bases the conclusion
that the importer had already known of the claim and its content for a long
time, and that under the circumstances the action against him should be
accepted in the absence of defense. Thus, it was ruled that the brief of claim
was served properly, and since the importer failed to present a defense brief,
the decision in the absence of defense should be issued in accordance with
the plaintiffs' petition.

In the end, the court accepted the suit in its entirety and obliged the
Palestinian importer to pay 100,000 NIS, while ordering that the breaching
merchandise be destroyed.

(Judge Benjamin Arnon, TA (Central) 28840-11-09 Spin Master Ltd et al. v. Al

Sariha Al Yakubia et al, decision issued 26.10.10)

The foreign corporations were represented by Adv. Sa'ar Pliner and Adv.
Gabriella Shwartz.

Notes and Conclusions:

As a default, it can't be concluded that in every situation a plaintiff can hand in

the brief of claim against a foreign defendant (Palestinian or abroad) to an
Israeli customs representative dealing with the relevant shipments; it cannot
always be determined that the connection between the customs
representative and his client meets the level of "commercial licensee". The
content of this decision should be read with regard to the unique
circumstances mentioned, which led the court to rule that handing in papers
to a customs representatives will be considered the same as giving them to
the importer himself.

In the past, decisions have been issued which ruled that a customs agent
representing an importer vis-à-vis Customs regarding seized goods, is the
right address for handing in briefs of claim against that importer, provided that
the action is on the goods that were seized. In this case, the court preferred
not to reach this conclusion, but reached the same result in light of the unique
circumstances of the case.

Similarly, in practice, apparently the financial remedy will have no operative

meaning, in the absence of the ability to enforce the decision against the
Palestinian importer in the PA's territory.

Gill Nadel (founder of Gill Nadel Law Office www.nadel-law.co.il) - Born in

Israel in 1969, graduated from Bar Ilan University`s Faculty of Law (cum
laude) and from the Department of Musicology. He also has a master`s
degree in law from the same institution. Member of the Israel Bar since 1999.
Speaks Hebrew, English and Polish. Fields of expertise: Commercial and
Business Law, International Trade Law, Import and Export Law, Intellectual
Property Law, Maritime and International Forwarding Law, Litigation and
Court Representation. Adv. Nadel provides lectures on international trade law
and import and export law to in courses organized by the Bar Ilan University
Center for Commercial Law, Israel Bar, Israel Chambers of Commerce,
Manufacturers Association of Israel, Israel Export Institute, Customs Brokers
Association, International Forwarders, and more.