Israel's Supreme Court ruled today that the government can legally take over most operations of the Arab-owned East Jerusalem Electric Co., the largest surviving Palestinian business enterprise here.
However, the court restrained the Israeli government from implementing the takeover for 15 days and prohibited outright any Israeli seizure of those company operations that occur in the occupied West Bank, that is outside the portion of Jerusalem that was annexed by Israel in 1967 after its capture from Jordan.
The court ruling held that Israeli law does not apply in the West Bank as it does in annexed East Jerusalem and that international law thus limits the actions the military government can take in the occupied territories.
The decision in effect left the future of East Jerusalem Electric still undecided, although in practical terms it appeared to clear the way for a takeover if the government decides it wants to make the move.
The Israeli government, apparently anticipating a decision in its favor, had put security forces on alert to take over East Jerusalem Electric installations and prevent acts of sabotage that had been threatened by some employes in the event of an Israeli takeover.
Almost all the firms's generating facilities are in annexed East Jerusalem, and 43,000 of its 70,000 clients are in the Israeli capital. Moreover, about 60 percent of the company's power is purchased from the Israeli Electric Corp.'s power grid, meaning that it would be impossible for the Arab firm to distribute power at current levels without the acquiescence of the Israeli government.
However, the three-judge Supreme Court panel rejected the government's claim that its decision to take over the firm's concession was based on economic and technical reasons. The court ruled that the underlying motive was political, and it urged the government to reconsider the original decision, made last year, to put the Arab firm out of business.
Palestinian leaders had viewed the planned takeover as an attempt to eradicate the last vestiges of Arab-controlled large-scale enterprise from the West Bank and further integrate the economy of the occupied territories with the economy of Israel proper.
Both sides today interputed the unanimous Supreme Court decision as a victory.
Deputy Attorney General Yoram Bar-Sela said, "Our end goal was to buy the power station, because we thought it was an old-time way of making electricity. And that has been approved by the court."
He reported that Energy Minister Yitzhak Modai would confer with his senior advisers during the 15-day restraining period.
Anway Nusseibeh, chairman of East Jerusalem Electric, said, however, that he was optimistic the firm would remain intact under Arab control.
"I won the concession in the West Bank. I won, provisionally, the concession in East Jerusalem, because the case has been sent back for the minister to reconsider his original wish to buy the company," Nusseibeh said.
Israel's energy minister had offered East Jerusalem Electric $3.9 million in compensation for its franchise, but Nusseibeh maintained that the assets alone were worth $170 million.
Nusseibeh today argued that it would be impossible to divide the firm between East Jerusalem and the West Bank, declaring, "It does not make sense. It is not technically possible to run the company only in the West Bank . . . . I believe it is either or concession, and we have the right to operate it, or the minister and the authorities have the right to purchase it; the court said they cannot purchase it in the West Bank."
For years the firm has been controversial, with the Israeli government maintaining that it is inefficient and financially instable and many of the firm's 17,000 Jewish customers in East Jerusalem and West Bank settlements complaining about the security risk involved in having an Arab company control their source of power.