ISRAEL Law and Practice Contributed by: Joseph Sprinzak and Rahel Rimon, J.SPRINZAK
6. Enforcement of Law and Jurisdiction and Arbitration Clauses 6.1 Enforcement of Law and Jurisdiction Clauses Stated in Bills of Lading The Israeli courts give full effect to choice of law clauses contained in any contract, includ - ing contracts of carriage and bills of lading. Where the case is conducted in Israel, foreign law is considered a matter of fact, which must be proved in the usual way, generally through expert testimony. With regard to jurisdiction clauses, the Israeli courts will give effect to exclusive jurisdiction clauses, even where the action sought to be stayed is in rem. In the case of CA 8205/16 M/V Thor Horizon, the Supreme Court held that a foreign jurisdiction clause contained in a bill of lading issued by a sub-charterer could apply to a claim in rem against the vessel for damage to goods. The Supreme Court emphasised that sei - zure of the vessel in Israel alone, without further links to the country, would not be sufficient to determine that Israel is the convenient forum in the face of a foreign jurisdiction clause. Further, the fact that the damage to the goods was dis - covered upon the arrival of the vessel in Israel was not, on its own, sufficient to weigh against a stay of proceedings in Israel. Nonetheless, in that case, prescription in the foreign forum meant that, in the particular circumstances, the convenient forum for hearing the case was in fact Israel. In another case, ALA 1785/15 Cosco Container Lines Co Ltd v Alison Transport Inc, the Supreme Court upheld the District Court decision that a consideration against an argument that Israel was not a forum non conveniens was that suit was being brought against the carrier, shipper
and other parties, and it was important for all the disputes to be heard in a single forum. 6.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading In the event of a foreign arbitration clause, Sec - tion 6 of the Israeli Arbitration Law – 1968 pro - vides that when an action is brought before a court in a dispute in which it had been agreed to refer to arbitration, and if an international con - vention to which Israel is a party applies to the arbitration and that convention lays down pro - visions for a stay of proceedings, the court will exercise its power under Section 5 in accord - ance with and subject to those provisions. This is also true where the arbitration clause is in a charterparty incorporated into the relevant bill of lading, subject always to the true construction of the relevant arbitration clause (ALA 1917/19 M/V Chem Antares (2019)). 6.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Israel is a party to the 1958 New York Conven - tion on the Enforcement and Ratification of For - eign Arbitral Awards, which provides for the stay of judicial proceedings in the case of a foreign arbitration agreement unless it finds that the agreement is null and void, inoperative or inca - pable of being performed. Section 29 of the Israeli Arbitration Law – 1968 provides that matters regarding the enforcement or cancellation of an arbitration award governed by an international convention to which Israel is a party will be dealt with according to the pro - visions of that convention. As a result, a court considering the ratification of a foreign arbitral award would give consideration to such mat - ters as whether the subject matter is capable of
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