A non-Israeli manufacturer and an Israeli entity entered into a contractgranting the Israeli entity the right to sell the manufacturer's products in Israel with a contract clause setting that all legal proceedings will be in the United Kingdom. After the manufacturer terminated the agreement, the Israeli party filed a suit in Tel Aviv.
The Court held that the jurisdiction clause included in the contact is not a unique but parallel clause and there is no impediment to hearing the claim in Israel. When there is a contractual agreement between the parties to a contract regarding the jurisdiction in which disputes between the parties will be heard, the Court must honor such agreement. However, a distinction must be made between a unique stipulation that prohibits the resolution of disputes in any other forum and a parallel stipulation that establishes a preferred, but not exclusive, forum. In order for a jurisdiction clause to be perceived as unique, it must be clear and unambiguous, especially when it comes to a contract between two sophisticated business parties, because it locks the doors of Court before a party to the contract and violates its basic right to access the Courts. For this reason, the stipulation will be respected only if its language is clear and explicit. Here, the language of the stipulation was not clear, but rather hinted at the possibility of initiating legal proceedings in other forums as well, and therefore this is not a unique stipulation, but rather a parallel stipulation, which does not deprive the Israeli Court of jurisdiction to conduct the proceedings.