A Claim Against A Company Will Not Be Dismissed, Even Though A Foreign Jurisdiction Stipulation Exis

Adv. Gill Nadel, Adv. Dave Zeitoun, Matan Yaacov

Background:

In the following article, we will review a case in which the Haifa Magistrate Court decided to adjudicate a dispute between an international forwarding company and an insurance company, even though the bill of lading clearly states that the jurisdiction in any dispute will be a court in London.

Case Facts and Detailed Arguments:

The ruling relates to a 96,000 ILS subrogation claim (a claim submitted by an insurance company against those liable for the damage caused to the entity it insured) regarding damage allegedly caused to the cargo (a mast for a yacht).

The plaintiff is the insurance company, which insured the mast that was damaged during transport and indemnified the insured, the cargo's owner. The insurance company alleges that during one of the transportation stages, prior to marine voyage, the cargo was mishandled, damaging the mast.

The defendants, international forwarding companies, were involved in transporting the cargo.

The defendants argued that the claim should be dismissed, as the bill of lading grants exclusive jurisdiction to the London court and denies the authority of other courts to adjudicate the claim. The defendants argued that the wording of the bill of lading is written as a call for action, makes use of the word "exclusively", and denies the authority of other courts to adjudicate claims against the forwarder.

The plaintiff argued that it, and the importer as well, are not a party to the bill of lading, as it was a consignment. Therefore, the contract stipulation granting jurisdiction exclusively to the London court does not bind it. The plaintiff argued that the insured did not sign the bill of lading, and was not informed that in case of a claim, a foreign jurisdiction stipulation exists. Furthermore, the plaintiff claimed that the only document presented to the importer was the Preadvice document, which did not include the instructions written on the back of the bill of lading.

The Court's Ruling:

According to the bill of lading, disputes regarding the bill or related to it will be exclusively adjudicated by the London court under British law. The courts do not condone breaching contracts, and therefore an Israeli court would give effect to a foreign jurisdiction stipulation and delay proceedings, unless there are good, unique reasons justifying a different course of action.

The court determined that the bill of lading does not bind the insurance company and \ or the importer, as they are not a party to it. The foreign jurisdiction stipulation was therefore not brought to the importer's attention, and he did not agree to it.

In light of the above, the court ruled that these are good and unique reasons which justify overriding the foreign jurisdiction stipulation.

[T.A. 53565-02-16, Clal Insurance Company Ltd. V. O.P.S.I. (International Handling) Ltd. presiding judge: Ayelet Dagan, ruling given on 20.2.17.]