The ICC’s Israeli-Palestinian Jerusalem Arbitration Center is reportedly to begin functioning soon.
This neutral arbitration center, a creation of Paris’ neutral ICC International Court of Arbitration, is intended to resolve commercial conflicts concerning the 3-4 billion USD of trade between Palestinians and Israelis. Previously, such commercial conflicts had to be resolved either before the courts of Israeli, which many Palestinians distrust, or the courts of Palestine, which many Israelis distrust.
The ICC International Court of Arbitration is a non-Israeli, non-Palestinian institution based in Paris, France, and it is composed of more than 100 members from approximately 90 countries. Modern arbitration law was created at the ICC, which remains the leading center for international arbitrations in the world.
Although the Oslo Accords attempted to provide for mechanisms for the mutual recognition and enforcement of judicial decisions, in practice this has not worked. It is expected that it will be easier to enforce arbitration awards in both Palestine and Israel than court judgments, since the Jerusalem Arbitration Center is wholly neutral and non-aligned.
In conjunction with the creation of the Jerusalem Arbitration Center, the Palestinian Arbitration Law, which dates from 2000 and is based on the UNCITRAL Model arbitration law, is in the process of being amended with the Palestinian Ministry of Justice, to close loopholes that ensure national enforcement of international arbitration awards in a manner that is consistent with the New York Convention, a treaty that has been ratified by most countries in the world, and which obliges Contracting States to enforce international arbitral awards. For instance, a loophole that allows Palestinian courts to thoroughly review arbitral proceedings and outcomes is expected to be closed, which should lead to a higher rate of enforcement of arbitration awards.
The creation of the Center itself poses interesting legal issues, notably with respect to the seat of arbitration. Traditionally, it is the courts of the seat of arbitration that may intervene and issues interim measures in support of arbitration, and which rule on the annulment of an award after it is issued. One possibility might be for courts tasked with the obligation on enforcing arbitration awards to follow French law, which posits that international arbitration is a type of sui generis legal regime derived from principles of international law, and is thus not attached to any national seat.
Another legal aspect of the Jerusalem Arbitration Center concerns jurisdiction. At the outset, any disputes in excess of USD 7 million will revert to the ICC in Paris for resolution, likely in order to avoid any mishaps with respect to significant disputes. While this limits the jurisdiction of the Jerusalem Arbitraton Center to relatively small arbitration claims, at first, there is nothing stopping this cap from being lifted once the Center has proven its viability.
If successful, the Jerusalem Arbitration Center could be used as a template to peacefully resolve commercial conflicts between disputants from other jurisdictions that are openly hostile to each other, such as Pakistan and India, the former Yugoslavia, Sudan and Southern Sudan, or even North and South Korea. There is also no legal reason why the mandate of the Jerusalem Arbitration Center itself could not be expanded to allow commercial disputes involving businessmen from neighboring countries with a history of distrust of Israel, such as Syria, to resolve their commercial disputes with Israeli parties before a truly neutral forum.
To learn more about this interesting new arbitration institution, please read the article below, by Catherine Rogers, Professor of Law and Paul and Marjorie Price Faculty Scholar at the Penn State Law.
– William Kirtley
– William Kirtley