A precedent-setting ruling indicates a change of trends in the tender law field

The Supreme Court of Israel rejected an appeal that was filled by “Afcon” company against the win of “Arad” company in a NIS 40 million tender for establishing a remote reading system of water meters in Rehovot. The court ruled that there wasn’t any flaw in Arad’s guarantee, and that Arad should not endure the failures of the tender’s publisher, “Habeer Hashlishit” company, in correcting any ambiguity in the tender regarding the required validity of the guarantee date. “Afcon” was also ordered to pay “Arad” expenses in the amount of NIS 30,000.

The precedence of this ruling lies in the fact that it is the first time that the court rulled, not in a dissenting opinion, that the rule of rejecting a proposal in a tender process due to a beneficial guarantee (as opposed to a worsen guarantee), should be questioned.

This, combined with other rulings, may pave the way to a future change in the way in which the rule of disqualification has been applied so far in relation to tender guarantees.

“Arad” was represented in the proceedings by Adv. Roy Kubovsky, a partner in our firm’s litigation practice, and Adv. Adi Shohat.

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