I Warned Him About an Israeli Jurisdiction Clause, and He Didn’t Listen

About three years ago, a client sat across from me – an experienced Israeli real-estate developer who, together with a partner, had bought a residential building in Bucharest. He came to me after they had already closed the deal; now he wanted to draw up a proper partnership agreement between himself and his partner.

“Listen,” he told me, “we’re good friends, but we’re also businessmen. Everything has to be in writing. Just make sure that if something happens, the court will be in Israel. I’m not going to litigate in Romanian.”

It sounded logical. It’s what most of my clients ask for. But this time, I stopped him.

“Are you sure?” I asked. “Listen, I have to tell you something. The property is in Romania. If there’s a dispute, a judgment from Israel will be almost impossible to enforce there. A court in Israel doesn’t know the local laws, and it can’t issue direct orders to the authorities in Romania.”

He looked at me as if I were exaggerating. “It’ll be fine. We’re both Israelis, and if there’s a problem, we’ll solve it in Israel.”

I tried again. I explained the enforcement problems, the need for a separate recognition procedure in Romania, the difficulties of proving foreign law.

He wasn’t impressed. “Write jurisdiction in Israel.”

I wrote it. His partner consulted another lawyer, and they both signed the agreement.

What happened two years later

My phone rings. It’s the same client, but his voice is completely different.

“We have a big problem,” he said. “My partner has stopped paying his share of the expenses. We have a tenant who hasn’t paid for four months and can’t be evicted, and my partner refuses to approve the eviction procedure. There’s a serious fault in the building’s central heating system and he won’t approve the repair. I’m completely stuck. I want to open a case against him.”

“Fine,” I said, “we’ll open a case in Israel. But I have to remind you that I warned you about exactly this.”

He sighed. “Let’s start. Maybe it’ll be fine.”

It wasn’t fine.

The real mess begins in court

We filed a claim in the Tel Aviv court. We asked for interim relief: an order for the partner to pay his share, permission to carry out urgent repairs, and approval of the tenant eviction procedure.

At the first hearing, the judge asked basic questions that none of us could answer:

“How does tenant eviction work in Romania? What are the timelines? What rights does a tenant have under Romanian law?”

The other side’s lawyer argued that the tenant was protected under a special Romanian law that came into force in 2022, a law giving extended protection to long-standing tenants. My client said that was nonsense, that the law didn’t apply to his case.

But who could know who was right? Not the judge, not me, not the other side’s lawyer.

We had to bring a legal opinion from a Romanian lawyer. It took two months and several thousand euros. The opinion arrived in Romanian and was translated into Hebrew by a certified translator. The other side brought a counter-opinion from another lawyer in Bucharest, who argued exactly the opposite.

Now a court in Israel had to rule on an interpretive dispute between two Romanian jurists about Romanian law.

My client called me, frustrated: “I’m paying you, a Romanian lawyer, translators – and in the end nobody can answer anything.”

The problems only piled up

The judge asked: “What is the accepted practice in Romania regarding the division of shared maintenance costs?”

Again, nobody had an authoritative answer. In Israel, joint ownership is governed by the Land Law and the condominium bylaws. There’s rich case law and clear concepts. In Romania? A completely different legal structure.

There’s a concept there called the “asociație de proprietari” – the owners’ association. It isn’t exactly a house committee as in Israel. It has a different legal status, different powers, different obligations. The judge asked for a detailed explanation.

Another opinion. Another translation. More time and money.

“What is the legal status of the tenants’ general assembly in Romania?” the judge asked at the next hearing. “Are decisions taken at the assembly binding on the owners? What majority is required?”

Again – an opinion. Again – experts. Again – a hearing postponed because the judge wanted to “deepen her understanding of the Romanian legal regime”.

My client could no longer hide his frustration. “It’s been eight months already! The defaulting tenant is still in the apartment, the heating system still hasn’t been fixed, and my partner is just waiting for me to give up.”

What a court in Israel can’t do

But the real problem wasn’t just the time and the expense.

A court in Israel can’t issue direct orders to parties in Romania.

The judge couldn’t order the land registry in Romania to change a registration. She couldn’t issue an eviction order for the Romanian police to enforce. She couldn’t order the local management company or the contractor to carry out repairs. She couldn’t compel the local owners’ association to do anything.

All she could do was give a declaratory judgment, stating who was right, who owed whom, and what each side had to do.

But how do you enforce a judgment like that?

The enforcement journey – another nightmare

After a whole year of hearings, we finally got a judgment. The court ruled that the partner had to pay his share, approve the repairs and allow the tenant to be evicted.

My client was happy for a moment. “Finally!”

But then I explained the next stage to him.

To enforce the judgment in Romania, you have to go to a court in Romania and ask for recognition and enforcement of a foreign judgment.

It’s a separate procedure. You have to hire a local lawyer in Romania, file an application, translate the entire judgment and the documents into Romanian, and wait for a hearing.

And the other side? He can object. He can argue that the judgment was given contrary to Romanian public policy, that it’s based on a mistaken understanding of local law, that the legal process in Israel didn’t give him a fair opportunity to defend himself.

“How long will it take?” the client asked.

“At least another year. And there’s no guarantee it will be approved.”

He fell silent.

The story ended in a way we hadn’t planned

After a year of hearings in Israel, legal costs that reached tens of thousands of shekels, and another enforcement procedure planned in Romania, my client realised he had to make a different move.

He decided to file a separate claim directly in a court in Romania, in parallel with the enforcement procedure.

Yes, it was expensive. Yes, it was frustrating. Yes, documents had to be translated, he had to travel to hearings, and work with a local lawyer who didn’t always understand the Israeli dynamics between the partners.

But within three months, things started to happen.

The local court knew the law. The judge knew exactly what an “asociație de proprietari” is and what its status is. He understood the contract with the management company. He knew how to deal with defaulting tenants under Romanian law – without opinions, without translations, without explanations.

And most importantly, the orders he gave were immediately enforceable in Romania. No separate procedure needed. Nothing to prove. It was a Romanian judgment, given by a Romanian court, and it could be enforced the same day.

The local police evicted the tenant. The contractor fixed the heating system.

My client called me: “Why didn’t we start this way from the beginning?”

“I told you,” I answered quietly. “I told you three years ago.”

What I learned

After dozens of international deals, I’ve understood something most investors don’t understand at first:

“Your” court doesn’t necessarily know how to deal with your problem.

When you invest in real estate abroad, you aren’t just buying a property; you’re entering a whole legal system. There are laws, customs, precedents, institutions and authorities there, each of which works by different rules.

A court in Israel, even if it has jurisdiction (because of a jurisdiction clause in the agreement), doesn’t know the local laws. It doesn’t understand the commercial customs, doesn’t know the legal status of the various parties in the destination country, and can’t issue orders that can be enforced directly.

And even if it gives a judgment, you’ll need a whole other procedure to enforce it.

Three essential insights

1. Your home doesn’t know the neighbour.

An Israeli jurisdiction clause gives you peace of mind, but not practical security. An Israeli court will need an expert opinion on every basic question of foreign law. Every hearing becomes several times more complex and expensive.

2. The dispute is where the property is.

The tenants, the managers, the contractors, the authorities – they’re all there. If your court can’t issue them direct orders, what use is the judgment?

3. Arbitration or local jurisdiction isn’t a weakness – it’s strength.

International arbitration in the country where the property is, or a clear agreement on local jurisdiction, gives you decisions that can be enforced the same day. It isn’t psychologically comfortable, but it’s practically effective.

Closing

Today, when a client asks me for an Israeli jurisdiction clause in a real-estate deal abroad, I don’t just advise – I warn.

I tell him this story. I show him the sum that client spent twice: once in Israel and once in Romania. The two years he lost. The frustration and the helplessness.

And then I ask:

“Do you want to win in court, or solve the problem on the ground?”

Because sometimes, winning isn’t enough.

So if you’re signing a partnership agreement for a real-estate deal abroad, think twice: where will you really be able to enforce your rights, and who really understands the laws that apply to your property?