The Nitzanim kibbutz will compensate the construction company Efgad for an amount of 1.4 million NIS following the cancellation of a construction agreement for the expansion of the kibbutz.
The kibbutz and its subsidiary Apal signed a contract for the expansion of the kibbutz with 138 apartments 11 years ago. Two years later, the kibbutz announced that the contract had been canceled due to a change in policy by the Israeli Land Authority.
The Tel Aviv District Court forced the Nitzanim kibbutz to pay 1.4 million NIS in damages to the construction company Apal, a subsidiary of Efgad, following a lawsuit filed by Apal against the kibbutz.
The kibbutz and Apal joined the group in October 2007, when the parties signed a contract for the expansion of the kibbutz to 138 apartments. According to the agreement, the kibbutz was to receive 34,000 dollars for each plot sold and 19 million NIS in total. However, two years later, the kibbutz informed the company that, following a change in policy by the Israeli Land Authority (ILA), which prohibits the transfer of agricultural land for settlement, the contract is null and void. The kibbutz received about 3 million NIS in damages, which it claims were caused by the cancellation.
The court’s decision was divided into two judgments. In November 2017, Judge Dotan stated that the prohibition on raising funds existed before the decision of the Israeli Land Authority and that, therefore, the reasons for the kibbutz’s policy change are not accepted.
In a second ruling, the judge decided that the kibbutz must compensate Apal 1.04 million NIS for materials and suppliers and 375,000 NIS for salaries and overhead costs.
Apal was represented by attorneys Ran Sprinzak, Efrat Cybulsky, and Chen Ne’eman from Erdinast Ben Nathan Toledano. Attorneys Daniela Jacoby and Carmit Doron represented the Nitzanim kibbutz.
