Legal Updates

Approval of terms of agreement by clickwrap is deemed a written agreement, including as to an international arbitration obligation

May 2, 2022

AB-Inbev, which produces various beer brands (Corona, Beck, Stella, Leff, Budweiser and more), canceled after 30 years a distribution agreement with an Israeli distributor and contended that all legal proceedings between it and the distributor are required to take place in arbitration in Switzerland because in each purchase order is done online and distributors are required to give their consent and approval to the terms of the order, which also include the arbitration clause.

The Court granted the request for stay of proceedings and held that although no agreement was signed, making purchase orders for years and actively agreeing to the terms of the order and as part of it to the arbitration clause indicates the consent of the parties. Because Israel is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitration Judgments, 1958, any dispute will be referred to arbitration given a written arbitration agreement unless the agreement is void, unenforceable or of no effect. An online agreement of the "clickwrap" type, in which an active approval of the agreeing party is required after the conditions were presented to it before the approval, is considered a binding agreement and whoever approves the terms of the click-through agreement is held as one who read and agrees to the terms of the agreement. Thus, there is an arbitration clause between the parties and the dispute in Israel should be stayed.