Is a Tel Aviv exclusive jurisdiction clause in my contract with an Israeli company enforceable against me?

Two questions hide inside one clause, and foreign parties usually only ask the second. The first is whether the clause is exclusive at all. Israeli courts have long distinguished active wording, along the lines that any action shall be filed in the courts of Tel Aviv, from passive wording that merely says those courts shall have jurisdiction. Passive wording tends to be construed as conferring parallel jurisdiction, not taking it away from anywhere else, and ambiguity is read against whoever drafted the clause, which is almost always the Israeli party. The second question, whether an Israeli court will honour a clause pointing to itself, is generally answered yes.

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Detailed Answer

Where the parties have agreed that Israeli courts may hear the dispute, that agreement is normally enough to found jurisdiction over a foreign defendant, and a defendant who has consented in the contract has a hard time arguing afterwards that Israel is an inappropriate forum. Forum non conveniens is still available in principle, raised by an application to set aside service out of the jurisdiction, but Israeli courts have narrowed the doctrine considerably in an era of video evidence and electronic disclosure, and a signed jurisdiction clause is close to fatal to it. The stronger attack is usually on the clause itself. Under Israeli standard-contract law a term that ousts the Israeli court's jurisdiction, or lets the supplier pick the forum, is treated as a depriving condition and can be struck out, which is a route that has succeeded against consumer-facing and franchise-style contracts. That doctrine is most useful in reverse, to a foreign party resisting a clause pointing away from Israel, but the principle underlying it, that a forum term must not be a device to deter a party from enforcing rights, is argued both ways.

For someone living abroad the practical consequences begin long before any argument about forum. Israel is a party to the Hague Service Convention, and service outside Israel is governed by the Civil Procedure Regulations 5779-2018, so papers can and do arrive at a foreign home address through a perfectly ordinary channel. Israeli deadlines then run whether or not the document has been translated, and a defendant who waits to understand it can find a default judgment already entered. Two things are worth doing at signature rather than at trial. First, price the clause: agreeing to Tel Aviv jurisdiction means Israeli counsel, Hebrew pleadings, a court fee calculated as a percentage of the claim and, for a foreign claimant, a likely application by the defendant for security for costs. Second, decide governing law separately and say so expressly, because a clause that fixes the forum says nothing about which law that forum will apply, and an Israeli court asked to apply foreign law will require it to be proved by expert evidence at your expense. If proceedings have already been served on you outside Israel, the immediate steps are set out in our answer on being served with an Israeli lawsuit while living abroad.

In Practice: Service outside Israel is governed by the Civil Procedure Regulations 5779-2018, in force since 1 January 2021, and by the Hague Service Convention 1965, to which Israel is a party. A clause conferring jurisdiction on Israeli courts generally binds a foreign defendant, while an exclusive foreign jurisdiction clause was treated as a voidable depriving condition in Doron v TGI Real Estate Investments Ltd (Tel Aviv District Court, 20794-03-11). Israeli court fees are 2.5 percent of the claim, half on filing, so a NIS 2,000,000 claim costs NIS 50,000 in fees alone, and an application to set aside service is usually decided within two to four months.

When to Consult a Lawyer

• You are about to sign an Israeli-drafted contract with a jurisdiction clause and no governing law clause. The two are not the same, and the gap is resolved against you later at the cost of expert evidence.
• You have been served abroad and the clause is passive rather than active. There may be a genuine argument that the Israeli court has no exclusive claim to the dispute, but it must be raised before you file a defence on the merits.
• You are the foreign claimant relying on the clause. Expect an application for security for costs, and expect the sum ordered to be a real commercial decision about whether to continue.

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Speak With an Israeli Attorney

We review jurisdiction and governing law clauses before signature, challenge service out where the clause does not bear the weight put on it, and defend Israeli proceedings for clients who never set foot in the country.

Contact us for a confidential initial consultation.