Legal Updates

A dispute concerning an investment through a non-Israel bank may be refused to be held in Israel

April 12, 2022

A person traded in shares on an American Stock Exchange through companies which managed their accounts at the British Barclays Bank, and deposited funds in the account, but these were not held separately from the companies’ funds. Eventually, the company ceased operations and filed for liquidation.

The Court stroked-out the case against Barclays and held that the forum of convenience for hearing the contentions against the bank is the United Kingdom. A number of considerations need be reviewed in order to determine whether Israel is the right forum for holding the legal proceedings: Most affiliation test; Reasonable expectations of the parties’ test and public interest test. In addition, considerations of convenience alone cannot tip the scales for litigation in Israel. Here, most of the affiliations are to the Courts of the United Kingdom, because the money was transferred to a bank account held in the United Kingdom, and used for trading on an American stock exchange and not for business activity in Israel. On the other side, the only connection to Israel is limited to the fact that the person who deposited the funds is an Israeli citizen and resident. In addition, and as a result, the reasonable expectation of the parties was also to litigate in the United Kingdom. Therefore, Israel is a non conveniens forum for holding the case.