Legal Updates

A contractual labor dispute jurisdiction clause will usually be honored

October 18, 2021

Senior executives of an Israeli company that is part of the Playtech Group and wholly owned by a company incorporated in the Isle of Man, which is a subsidiary of another Isle of Man company traded on the London Stock Exchange, filed a claim with the Israel Labor Court, for a bonus under the group bonus plan, which had an exclusive England and Wales law and London, England Courts jurisdiction clause.

The Labor Court dismissed the claim regarding the bonus in lack of jurisdiction. Even if there is a provision in the contract stating that a dispute will be resolved in a foreign country, this provision does not prevent an Israeli Court from hearing the dispute. However, although this is at its discretion, the tribunal will respect an agreed jurisdiction clause, except in exceptional and rare cases. Here, as part of the bonus program, an exclusive English jurisdictional clause was included and therefore there is no jurisdiction to hear the case in Israel.