The Jerusalem Arbitration Center- JAC
http://www.iccisrael.co.il/node/312

While political relations between Israelis and Palestinians remain strained,
both sides continue to engage in active and relatively large-scale bilateral
trade, primarily motivated by geographical proximity and respective economic
advantages. Conservative estimates place annual trade figures at between 3-4
billion USD, although actual figures could be significantly higher.

Commercial disputes are a natural by-product of international trade, and
Palestinian-Israeli trade relations are no exception. However, the
complicated Israeli-Palestinian relationship has created some unique
challenges for effective commercial dispute resolution:

• The majority of bilateral trade between the two sides is comprised of
sales from Israel to the Palestinian areas (Palestine to Israel trade is
primarily workforce related). This reality often results in the Israeli side
being the stronger party in the commercial negotiation. As a direct
consequence , Israeli law is often the law of the contract and Israeli
courts the agreed forum for resolution of commercial disputes between
Israeli and Palestinian business associates (Palestinian courts are
generally extremely hostile to Israeli parties and as such would not be
viable alternatives even were the parties so inclined);

• In spite of attempts in the Oslo Accords to provide for mechanisms for the
mutual recognition and enforcement of judicial decisions and rulings, in
practice the enforcement of Israeli court decisions in Palestinian areas is
virtually impossible.

• As a result of the combination of these two factors, both sides are faced
with a "lose-lose" reality with relation to commercial dispute resolution:
the Palestinian side is usually forced to agree to a legal forum he may view
as unfavorable, while the Israeli side runs the considerable risk that
awards in his favour from the Israeli courts will not be enforced (awards of
Israeli courts in favour of Palestinian parties are enforceable in Israel).

Recognizing these inherent risks, businesses interested in bilateral
Israeli-Palestinian trade will often resort to one of three transaction
models:

• Cash on delivery – a relatively undeveloped trade practice, guaranteeing
payment but creating serious practical difficulties for large-scale trade.

• Requirement of bank and other guarantees - again significantly improving
payment probability, but at a high contractual cost.

• Foregoing bilateral Israeli-Palestinian trade opportunities and focusing
on other, less challenging, markets.

Obviously, the creation of a viable, mutually acceptable and enforceable
Palestinian-Israeli commercial dispute mechanism could go a long way towards
overcoming these challenges, eliminate barriers obstructing bilateral trade
and generally improve relations between the two sides.

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Current status of the JAC project
http://www.iccisrael.co.il/node/338

The Parties have already made significant progress in transforming the JAC
from a vision to reality. The major milestones achieved to date include:

• Establishing the Palestinian ICC group, including its acceptance into the
global ICC organization.

• Agreement between the Palestinian and Israeli sides on the core basic
principles of the JAC and its structure.

• Development of a joint four year business plan for the project.

• Ensuring the support (and no less importantly, the lack of political
interference) of the governmental authorities on both sides.

• The establishment of the interim JAC offices in Ramallah and Tel-Aviv
(within or adjacent to the local ICC offices).

• Reaching agreement with the ICC and ICA for their active support for the
project, to include both professional guidance and actual ICC and ICA
representation in the JAC's organs. A powerful indication of the strength of
the ICC and ICA support can be found through the signature of the formal and
detailed aforementioned MOU which was signed on May 1st 2011 between ICC
Israel, ICC Palestine and the ICC, regarding the establishment of the JAC.

• The formation of the JAC Drafting Committee, comprised of renowned lawyers
from leading international and local law firms, to draft the rules and
regulations of the JAC.

• Completion of the drafting of the JAC Rules of Arbitration, 2011 by the
JAC Drafting Committee. The Rules, which will ultimately be approved by the
ICA, embody the JAC concept in a concrete, practical and guiding way.

Currently, the parties' efforts are focused on three main tracks:

• Concluding the discussions and negotiation between them relating to the
joint venture agreement and all other required procedures and guidelines,
all based on the ICA model.

• Securing sufficient funding to enable the setting up of the JAC and
ensuring its uninterrupted operation for the first few years of its
existence. Initial funding for the project has been forthcoming from Sweden,
through the generous efforts of the Swedish based PIBF (Palestine
International Business Forum). Obviously, in order to establish a solid base
for the project, additional and more varied funding sources are required.

• Identifying, hiring and training the key personnel required for the JACs
various organs.

Assuming the required funding sources will be found, our current goal is for
the JAC to open its doors for business at the beginning of the second
quarter of 2012 and to serve as an indication to all that realistic and
practical peace-building and supporting projects can succeed, even in the
most trying of times.