The class representative (named plaintiff), David Huta, alleged that Booking.com, by operating its customized Hebrew website for online hotel reservation services, misleads Israeli web users, as the prices shown on its website for hotel rooms in Israel do not include the VAT component, in violation of the Israeli Consumer Protection Law.
Huta served the complaint documents upon “Booking.com Israel Online Hotel Reservation Ltd.”, whose principle place of business is in Tel Aviv, and filed a motion seeking recognition of the service of process as an appropriate long-arm service on the Dutch Booking.com B.V., in accordance with the Israeli Rules of Civil Procedure. Judge Einat Ravid declined the motion, deciding that Huta has not met the required “Intensive Contacts” standard for the Israeli company to provide the complaint papers to Booking.com.
The Court held that the services offered by Booking.com are subject to the “Terms of Use” published on the website, whereby Booking.com explicitly regulated the functions of “support companies” such as the Israeli company. Booking.com clearly stated that the Israeli company is not authorized to receive pleadings on the Booking.com’s behalf and therefore cannot act as a certified agent for service of the plaintiffs’ summons and complaints. The Court further determined that there was no dispute that the Israeli company solely engages in technical support with the hotels, while Booking.com’s representative’s claims were clear in that the Israeli company does not serve as a Booking.com representative, thus the relationship between the two companies were not “intensive”.
Huta’s alternatively sought an extraterritorial service of process upon the Dutch company, pursuant to Article 500 of the Israeli Rules of Civil Procedure. Booking.com claimed in turn that the matter should be litigated in the Netherlands according to Dutch law, pursuant to the governing law and jurisdiction clauses in the Terms of Use.
The Court granted Huta’s alternative request, citing a recent Israeli court decision concerning PayPal, the online payment company, which held that a similar choice governing law clause on the PayPal website, referring to Singapore and subjecting the parties to Singapore law, was a unduly disadvantageous stipulation under the Israeli Standard Contracts Law.
In relation to Booking.com, the Court noted that the company provides, via the internet, service to hundreds of thousands of Israelis. For this purpose, it maintains a Hebrew website directed to Israelis and even provides various support services for its customers in Israel. Under these circumstances, mandating all Booking.com customers to litigate in the Netherlands under Dutch law is a provision whose clear and sole purpose is to block customers from exercising their rights against the defendant.
The Defendant’s claim that the Dutch forum is the most convenient forum was also dismissed under the “strongest ties” standard. The Court held that this clearly is an Israeli issue, as the ground claims refer only to Booking.com’s Israeli customers while Booking.com runs the website, among other countries, in Israel and in Hebrew, thus purposely availing itself to Israeli customers. Booking.com’s Israeli customers are the sole class to whom it is claimed that the company fails to apply the Israeli Consumer Protection Law which mandates all advertised prices include the VAT component. Ultimately, the service of process upon the Israeli company was annulled, and the Court granted Huta’s request for extraterritorial service of process of the class action to Booking.com’s Dutch address. {The Court decision, in Hebrew, is available here}.