Israeli customers of PayPal filed a request for approval of a class action suit in connection with certain fees charged to them that were not set forth in the PayPal User Agreement ("User Agreement"). A preliminary issue involved jurisdiction and choice of law; although the User Agreement exclusively provided for the courts and laws of Singapore, plaintiffs argued that under the specific circumstances the Israeli courts should have jurisdiction and Israeli law should be applied.
The District Court ("Court") noted that PayPal provided services through the internet to hundreds of thousands of customers in Israel, and had established a Hebrew-language website and support services for the purpose of better serving its customers.
The Court held that taking under consideration the number of Israeli customers and the services specifically provided to Israelis, the requirement set forth in the User Agreement that Israeli customers file suit in courts in Singapore according to the laws of Singapore (while PayPal reserved the right to file suit in Israel) was clearly aimed at preventing PayPal's Israeli customers from exercising their right to sue, and was void. International companies that market their goods or services to customers in Israel must expect that these customers be able to sue them in Israel. The fact that a company's activities are provided primarily through the internet does not grant immunity from litigation in the Israeli courts or from Israeli law.
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