First Palestinian-Israeli arbitration center to run in 2012

Leaders of Israel and Palestine Chambers of Commerce sign memorandum of understanding in Sheikh Jarrah to create an internationally backed mediation process.

May 2, 2011 05:30
3 minute read.
Israel and Palestine Chambers of Commerce heads

Israel and Palestine Chambers of Commerce heads 311. (photo credit: MELANIE LIDMAN)


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Israeli and Palestinian business leaders shook hands on Sunday in the Sheikh Jarrah neighborhood of east Jerusalem, as they pledged to create the Jerusalem Arbitration Center.

The leaders of the Israel and Palestine Chambers of Commerce signed a memorandum of understanding to create the country’s first arbitration center, an internationally backed mediation process that provides businesses with a way to solve disputes without going through the courts.

The center, which will be overseen by the International Chamber of Commerce’s International Court of Arbitration, may be running as soon as February 2012.

In arbitration, both sides meet face-to-face with a trained mediator. Arbitration is usually less expensive and faster than litigation in the court system – but the decisions are legally binding and internationally enforced, just as a court decision would be.

Arbitration is confidential, as opposed to court records, which are available to the media and the public. It also provides an alternative to the Israeli courts, which Palestinians often perceive as biased.

“By enhancing trade relations and removing legal barriers it will allow businesses to flourish,” said Munib Masri, chairman of the Palestine Chamber of Commerce. “This court is a cornerstone to implement peace and stop conflicts.”

Masri was quick to say that economic peace is no substitute for political peace, and that political peace must be established before business between companies can flourish.

“You can’t be occupied and do business,” he told The Jerusalem Post.

“I think everyone – also in the political sphere – is looking for the right way to live together,” said Maj.-Gen. (res.) Oren Shachor, a 33- year IDF veteran who was involved with the Rabin/Arafat peace negotiations.

Shachor also chairs the Israel Chamber of Commerce, and is the CEO of Eilat-Ashkelon Pipeline Company and Amidar, the state-owned housing company.

“It’s very easy to make declarations, it’s very easy to fight,” he told the Post. “I’ll remind you that I was the head of a delegation in the Rabin/Arafat negotiations, and not only did we not advance [the peace process], we went backwards. Now is the time to fix this and go forward... We need to democratically find a solution. People like Munib Masri are the solution.”

Shachor added that the initiative was personally supported by Vice Prime Minister Silvan Shalom, and that once the center was launched, Shalom’s office would officially endorse the initiative. Shalom did not return calls seeking comment.

The idea for an arbitration center to solve disputes between Palestinian and Israeli businesses was first conceived in 2009 – though Palestine did not become a member of the International Chamber of Commerce until 2010. There is an estimated NIS 20 billion of trade between Israeli and Palestinian businesses per year, according to Shachor.

ICC Arbitration Courts have handled 16,000 cases since the first court was established in 1923. In 2009, 817 cases were filed, involving 2,095 parties from 128 countries. There are 800 arbitrators in 90 countries around the world, handling disputes regarding around $100 billion of assets.

There will be between six to 12 arbitrators at the future Jerusalem Arbitration Center, which will temporarily be housed in the Alhambra Palace building, across from the Ministry of Justice in Sheikh Jarrah.

“This is an important initiative that will eventually help regulate business relationships.

Particularly between Israeli and Palestinian companies there’s a lot happening, but no legal system to govern this relationship when there are problems,” said Palestinian businessman Basher al-Masri, who is behind the planned Palestinian city of Rawabi north of Ramallah, among other business ventures both in the West Bank and abroad.

Tovah Lazaroff contributed to this report.

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