Israeli-Palestinian trade arbitration project_311.
(photo credit: International Chamber of Commerce Israel)
The peace process may be stalled, but Israeli and Palestinian business leaders
are determined to improve bilateral trade links, International Chamber of
Commerce Israel chairman Oren Shahor told The Jerusalem Post on
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Set to launch in May, the Jerusalem Arbitration Center (JAC) –
a joint venture between ICC Israel and Ramallah-based ICC Palestine – will be
“an apolitical, efficient, fair, impartial and professional body that will help
build trust by settling disputes between Israeli and Palestinian trading
partners,” according to Shahor.
Initial funding for the project, which
will be based in Jerusalem and will operate under the auspices of the ICC
headquarters in Paris, has been secured from the Swedish-based Palestine
International Business Forum.
JAC will also have two “back offices” in
Tel Aviv and Ramallah, staffed by Israeli and Palestinian
Israeli, Palestinian and international arbitrators will
hear disputes, and their decisions will then be approved in a JAC court, which
will also comprise experts from Israel, the Palestinian Authority and
The project has the support of senior ICC officials, including
British attorney John Beechey, chairman of the ICC’s Court of Arbitration, who
will oversee the JAC’s legal department.
Although the center is not a
government or political initiative, Shahor believes it could boost the peace
process by improving business relations between Israelis and
He says the center could even become a model for conflict
resolution in other parts of the region.
As evidence of how trade brings
people together, Shahor notes that he is sharing responsibility for the project
with Nablus-born businessman Munib R. Masri, chairman of ICC
According to Shahor, Israeli-Palestinian trade, currently
worth around $4 billion annually, could be worth even more if the trading
partners had a real solution to resolve trade disputes.
“That is a
surprising amount of trade, but it could be a whole lot higher,” he said, adding
that a major obstacle to bilateral trade was the lack of any real process to
resolve trade disputes.
While commercial disputes are an unavoidable part
of international trade, there are specific difficulties in settling
disagreements between Israelis and Palestinians, according to JAC legal adviser
Daniel Reisner, a partner at leading law firm Herzog Fox Neeman.
difficulty is the unequal balance of commercial power between Israeli and
Palestinian trading partners, which occurs because most bilateral trade consists
of Israeli companies selling goods to Palestinians.
When trade partners
sign an agreement, it is usually easy for the Israeli side to compel
Palestinians to agree that the contract will come under the jurisdiction of
Israeli law. If a dispute arises, it will be heard before an Israeli court –
which Palestinians see as biased.
However, even if the Israeli side does
win the dispute, Israeli court rulings are impossible to enforce in the PA,
The only other solutions currently available are either
for Israelis to accept the jurisdiction of Palestinian courts – which Reisner
says never happens - or for both sides to forgo signing a contract and hope that
nothing goes wrong.
“JAC solves the problem, because it gives the
Palestinian side an objective arbitration court supported by the ICC in Paris,
and it will also be relatively inexpensive,” Reisner said.
JAC is equally
attractive to Israeli companies, Reisner says, because if they win a dispute,
the court’s ruling will be enforceable in the PA.
Reisner, who in the
past acted as legal adviser to the government during the peace process, dubbed
JAC “an attempt to build peace from the bottom up after top-down approaches
“It’s a win-win solution for Israelis and Palestinians,” he