A man entered into an oral agreement with two Israeli lawyers according to which they will handle the conversion of the Bitcoins he owns into euros, hold the funds received after the conversion in trust, and transfer them, after deducting their commission, to his account upon demand. The lawyers formed trusts in Singapore for the purpose of holding in trust the Bitcoin they will receive, as well as the Euro coins after their conversion, and for using these funds as the client instructs them, when the trust’s constitutional documents included a foreign jurisdiction clause stating that any dispute will be resolved in Singapore. After about 26 million euros were converted from Bitcoin to euros and transferred to the accounts of the Singapore trusts, and after the same person - the beneficiary - was apparently arrested in Germany and according to him also transferred another 80 million euros to the control of the lawyers, he filed a lawsuit against them in Israel but they claimed that there is an exclusive jurisdiction clause in Singapore.
The Supreme Court rejected the trustees’ contention that the procedure should be held in Singapore due to the lack of consent by the client to the applicability of the foreign jurisdiction clause. The mere existence of a foreign jurisdiction clause does not limit the authority of the Israeli Courts to hear the claim, however, the Court will, as a rule, tend to respect agreements that include such jurisdiction clauses and will not lend its hand to breaching of these agreements. While a foreign jurisdiction clause may also apply in relation to a third party who is not a direct party to the agreement which is the subject of the lawsuit, the ability to prevent by it, a right holder from appealing to Courts is conditional upon the right holder’s being a party to the agreement in which such exclusive jurisdiction clause was established. Here, while the client admittedly acknowledged the undertakings by the trustees, which were stipulated in the trust constitutional documents, he did not consent to the foreign jurisdiction clause stipulated therein. Therefore, the client is not a party to the foreign jurisdiction clause and the trustees cannot prevent him from appealing to a competent Court in Israel.