Court ruling8/31/2026

Astral Ordered to Pay NIS 400,000 in Costs in Hotel Lease Dispute

The Tel Aviv District Court dismissed the Astral hotel chain’s claim for the reimbursement of NIS 3.75 million in rent paid during the renovation of the Aria Hotel in Eilat. The court held that the obligation to pay rent, established in an addendum to the agreement, was absolute, even though the previous exemption had not been expressly revoked.

Key facts

•Court: Tel Aviv District Court
•Judge: Naftali Shilo
•Publication date: August 31, 2026
•Claim amount: NIS 3.75 million
•Legal costs: NIS 400,000
•The case number is not specified in the original source

Who Were the Parties and What Was the Dispute About?

Astral leases and operates the Aria Hotel from Neot Hof HaAlmog and M.P.A. Tourism. The hotel is owned by Neot Hof HaAlmog: half of its shares are held by M.P.A. Tourism, and the other half by Astral. The original agreement exempted Astral from paying rent during renovations that made it impossible to operate the hotel.

What Did the Addendum to the Agreement Change?

The 2021 addendum granted Astral the exclusive right to determine the timing and scope of the renovation and required it to fully finance the work, which cost approximately NIS 40 million. The annual rent was set at NIS 15.6 million. The document also stated that Astral was required to pay the rent in full, that this obligation was unconditional, and that the addendum took precedence over the original agreement.

Why Did Astral Demand Reimbursement?

At the end of 2021, the renovations lasted four months, and the hotel was closed for three months. Astral paid NIS 3.75 million in rent and subsequently demanded reimbursement, arguing that the original exemption for the renovation period had not been expressly revoked. The defendants argued that the “absolute” obligation to pay negated the exemption, particularly in light of Astral’s right to determine the scope of the renovations itself.

The Court’s Decision

Judge Naftali Shilo dismissed the claim and gave decisive weight to the parties’ intent and the business rationale of the addendum. He held that the wording establishing an absolute and unconditional obligation also applied during the renovation period, despite the absence of an express revocation of the previous exemption. The court also noted that Astral had not proved that the hotel needed to be fully closed and had not explained why the work could not have been carried out in stages.

Costs and Possible Appeal

Astral was ordered to pay NIS 400,000 in legal costs. The company stated that it believed the decision was erroneous and that it intended to appeal it to the Supreme Court. The original source contains no information about the filing or hearing of an appeal.

What this means for you

For tenants and owners of commercial real estate, this decision shows that a court may consider not only the literal wording of an agreement, but also the business purpose of its amendments and the parties’ demonstrated intent. Language establishing an absolute and unconditional obligation to pay may override a previously established exemption, even if that exemption was not expressly revoked. In addition, a request for a rent exemption due to renovations may depend on evidence that closing the property was indeed necessary.

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