Release Details

Land Dispute Statement Of Defence

October 15, 2002
15th October, 2002

Bezeq, in its statement of defense filed today in the real estate dispute with
the State:


Bezeq: " The State's claim is refuted on its merits and is replete with flaws.
We have already paid more than 15 NIS billion for the Company's assets,
including the real estate

Bezeq filed its statement of defense today in the Jerusalem District
Court, in the real estate dispute between it and the State. In its
claim, the State made various allegations against Bezeq relating to
the company's rights to the real estate that the State granted to the
company for its operations.

In the 100-page statement of defense prepared by its lawyers, Ze'ev
Hartabi, David Basson and Gilad Hess, Bezeq alleges that the claim
should be dismissed in limine, both for pertinent and for procedural
reasons. "This claim were better never filed," says Bezeq. "It is
replete with flaws, and even more to the point, is refuted

Bezeq emphasizes in its allegations that not only should the claim be
dismissed, but "It is the State which deprived Bezeq and unlawfully
prejudiced its rights."

Concerning the State's request that the Court direct that some of the
real estate involved in the dispute be evacuated – Bezeq says
that this demand cannot even be heard, due to lack of jurisdiction of
the District Court to hear an application of this kind.

The statement of defense explains the legal status of the disputed
real estate according to signed agreements between Bezeq and the
State. Bezeq takes the position that the company owns the ownership
rights in that real estate, or at least rights in its perpetual lease,
discounted on ownership terms. Bezeq refers in its allegations both to
the real estate received from the State under lease and to the real
estate received with a legal status of "renewable rental".
Bezeq contends that the fact that its has rights in the real estate
means that like any landowner, it may utilize the property as it sees
fit in any respect and for any type of business or other activity in
which the company is involved. Bezeq emphasizes that the consideration
agreed upon has already been paid to the State, and that to date the
company has paid more than NIS 15 billion for its assets, among them
the real estate. It stresses that at the time, the purpose of
transferring the operation from the Ministry of Communications to
Bezeq was to make the country's communications services more
efficient, and says that since it became a separate company, it has
been one its duties to make the best possible use of its assets and
resources for the good of the shareholders, who paid enormous amounts
of money for the shares of a business oriented company and not of a
government-dependent unit, as the State seems to be implying.

Bezeq contends that the claim should be dismissed. If the court does
not allow Bezeq's application, then alternatively the court is
requested to direct the State to amend its statement of claim and
elucidate it, in view of the many legal flaws it contains.

Bezeq said that the statement of defense filed today is part of a
proceeding instituted by the State, a proceeding that has forced Bezeq
to defend itself with all the arguments at its disposal. Nevertheless,
the filing of the defense does not mean that the parties have stopped
trying to reach a settlement, and there has even been some progress
recently in that direction.

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