CA 45700-03-21: Gleicher v. Electra Ltd. et al., before the Honorable Judge Y. Sokol, Economic Division, Haifa District Court.
Shibolet represented Electra Ltd., Elco Ltd. and their officers in an application to certify a NIS 208 million class action filed against them. The application alleged that Electra had included a “misleading detail” in its stock exchange reports by failing to disclose the purported “fact” that it was a party to restrictive arrangements in the passenger-elevator maintenance sector.
The application was based on an indictment filed against Electra on charges of being party to a restrictive arrangement.
The Haifa District Court granted our motion to dismiss the certification application in limine. In its judgment, the Court conducted an in-depth analysis of the meaning of the term “misleading detail” and distinguished between damage allegedly caused to the company, assuming – as the Electra Group denied – that a restrictive arrangement existed, and personal damage to shareholders. The Court held that, even if it were proven, regrettably, that Electra had been party to a restrictive arrangement, it could not be established that the shareholders had suffered personal damage.
The Court further held that this was one of the exceptional cases justifying consideration of threshold arguments, and that an indictment alone does not constitute a sufficient evidentiary basis for the existence of a restrictive arrangement requiring disclosure, as distinct from the filing of the indictment itself.
Accordingly, the Court dismissed the certification application in limine and ordered the applicant to pay costs of NIS 20,000.
