An Israeli company, insured by a foreign insurance company filed a claim in Israel against the insurer for breach of the insurance contract, despite a foreign jurisdiction clause included in the insurance policy.
The Court rejected the insurer's contention and held that as the implementation of foreign jurisdiction clause necessitates an interpretative process - it is therefore void. A party seeking to deny the other the right to litigate in a qualified forum, should stipulate it in an explicit and clear manner in the contract. Unlike other clauses in the contract, for which even if it is a 'closed contract', made between two business parties, there is no impediment from applying an interpretative process within the limits of the language of the contract, in order to revel the parties’ intent, the foreign jurisdiction clause - to the extent that it is determined that the language is unclear and ambiguous - Meaning, this will immediately lead to the 'death' of the clause, and this even if it was possible through an interpretative-linguistic procedure, excluding reliance on external circumstances, to reach the conclusion that such a foreign jurisdiction clause was indeed established. Here, it was stipulated in the insurance policy that the jurisdiction for disputes regarding the interpretation of the policy terms will be in Germany, however as it was not stipulated that every dispute is a dispute regarding the interpretation of the policy terms, the wording of the jurisdiction clause is unclear and ambiguous and requires an interpretative procedure to determine the nature of the dispute and therefore the foreign jurisdiction clause is void.