Escaped URL Problem

How can I stop WordPress from escaping certain URL’s?

I am using the beautiful Loom theme which has a built in “Clients Posts” function which displays a rolling bar of client logos which can be linked to URL’s.

Many of my URL’s are in Hebrew and these are being escaped and rendered unreachable. The theme developer tells me that a WordPress’ native functions, specifically the function esc_url() are doing this.

You can see the problem here. Please scroll down half way.

URL’s which begin with Latin letters are escaped but still work.

So
http://www.photomobil.co.il/microsoft-ildc-beach-party-%D7%90%D7%99%D7%A8%D7%95%D7%A2-%D7%97%D7%91%D7%A8%D7%94/
becomes
http://www.photomobil.co.il/microsoft-ildc-beach-party–/

which is fine.

But
http://www.photomobil.co.il/%D7%90%D7%95%D7%9C%D7%9E%D7%95%D7%AA-%D7%90%D7%99%D7%A8%D7%95%D7%A2%D7%99%D7%9D-%D7%90%D7%95%D7%95%D7%A0%D7%99%D7%95/

becomes
http://www.photomobil.co.il/-/
which is useless.

Any help would be very gratefully received.
Thank you,

Deborah