Background
The Respondents obtained a judgment in prior Israeli proceedings against Segal Group (Dresden) GmbH & Co. KG, a German limited partnership, ordering repayment of a €1.73 million shareholder loan that had been advanced to fund a real estate project in Dresden. The Petitioners—Israeli citizens and an Israeli-registered company—were partners and managers of the German partnership. On June 11, 2025, the Respondents filed suit in Israel’s District Court (Center-Lod) against the Petitioners seeking 52,437,841 NIS, alleging they had wrongfully dissolved the partnership and dissipated its assets to prevent enforcement of the prior judgment and claiming liability for tortious interference, unjust enrichment, and abuse of process.
The Petitioners moved to stay proceedings or dismiss on grounds of forum non conveniens, arguing that Germany was the appropriate forum since the partnership was formed there, the real estate activity occurred there, and German law governed the partnership agreement. The District Court rejected this motion on March 9, 2026, finding that the Petitioners had not met their burden of proving that the weight of connections clearly pointed to the German forum. The Petitioners then sought leave to appeal to the Supreme Court.
The Court’s Holding
Justice Gila Kanfi-Steinitz affirmed the District Court, holding that the Petitioners failed to meet the stringent burden required to invoke forum non conveniens. The Court confirmed that when jurisdiction is properly obtained through service within Israel, the burden rests on the defendants to prove not merely that a foreign forum has connections, but that “the scales tip clearly” in favor of that forum. The Court applied the three-part test for forum non conveniens: (1) most significant connections; (2) reasonable expectations of the parties; and (3) public policy considerations.
On the “most significant connections” prong, the Court found the District Court properly weighed competing factors. While Germany had connections (partnership incorporation, asset location, real estate activities conducted there), Israel had equally significant ones: the prior litigation had been conducted entirely in Israel and addressed “the same contractual arrangements and a substantial portion of the facts now alleged”; the Petitioners are Israeli citizens; and the Respondents reside in Israel. The Court emphasized that the location of tortious conduct and harm remained contested and could not be resolved at a preliminary stage.
As to the parties’ “reasonable expectations,” the Court held that a choice of law clause (selecting German law) is legally distinct from a choice of forum and does not establish that parties expected litigation to occur in Germany. The Court also rejected the public policy argument that German courts have the “genuine interest” in adjudicating the matter, noting that Israeli courts have a vital interest in enforcing their own judgments and ensuring that wrongdoing to obstruct enforcement is addressed. The Court further observed a modern trend toward narrowing forum non conveniens claims given contemporary ease of international travel and communications.
Key Takeaways
- When jurisdiction is properly established by service within Israeli territory, the party challenging forum bears a high burden—must show that the weight of connections “clearly” favors a foreign forum, not merely that foreign connections exist.
- A contractual choice of law clause is independent of forum and does not create a reasonable expectation that disputes will be litigated in the chosen law’s jurisdiction.
- Israeli courts retain legitimate interest in adjudicating claims that involve obstruction of Israeli judgments, and this public policy consideration weighs against forum non conveniens dismissal.
- Modern Israeli jurisprudence disfavors forum non conveniens objections absent compelling connections to a foreign forum.
Why It Matters
This decision reinforces Israeli courts’ willingness to exercise jurisdiction over international parties and disputes involving enforcement of Israeli judgments. For creditors and judgment holders, the ruling provides assurance that Israeli courts will not easily defer to foreign forums when asked to adjudicate claims of wrongful dissipation or obstruction of enforcement—even where significant activity occurred abroad and a foreign entity is involved. The decision reflects a policy preference for centralized resolution of related disputes: the prior judgment and the current wrongful dissipation claim both belong in the forum that issued and seeks to enforce the original judgment.
For international litigants, the decision illustrates that Israeli defendants who are Israeli citizens or residents cannot easily escape Israeli jurisdiction by pointing to connections in the jurisdiction where a partnership was formed or assets were held. The Court’s emphasis on the distinct legal nature of choice-of-law and choice-of-forum clauses is also significant for drafters of international commercial agreements, clarifying that selecting one jurisdiction’s law does not implicitly establish a forum selection.