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Court Rules on Electric Company

February 17, 1981
See Original Daily Bulletin From This Date

The Supreme Court ruled today that the government has the right to purchase the East Jerusalem Electric Corp., but only that part of the Arab-owned utility located within the confines of Jerusalem. The appeal by the corporation against any change in its status was upheld with respect to its operations in the occupied territories.

The unexpected decision posed dilemmas for the government, which must decide if it wants only part of the utility or none, and for the partially successful appellants because their power plant is in Jerusalem. Both sides were claiming victory today. Energy Minister Yitzhak Modai went into immediate consultations with his senior advisors to seek a solution to the problem.

The corporation let it be known that it would challenge that part of the ruling that favored the government if the latter moved to take over the power plant. The appeal was filed with the high court after the government announced a year ago that it planned to exercise its right of purchase under the corporation’s original franchise and merge the East Jerusalem utility into the Israel Electric Corp. The franchise was granted during the British Mandate in Palestine.

The East Jerusalem Electric Corp. serves both Arab and Jewish customers, the latter since the Six-Day war when Jewish settlements began to appear on the West Bank and to proliferate in recent years. The appeal contended that the take-over bid had political motivations. The Supreme Court agreed, though it saw nothing wrong with political consideration per se. But it ruled against a change in the company’s status on the West Bank because of the temporary character of the Israeli presence there.

The court, however, ordered the entire matter returned to the Minister of Energy for reconsideration and urged that before he makes a final decision he allow representatives of the corporation to present their argument. The court also called on all parties to maintain “good will and a moderate approach,” indicating that it hoped the government would make an effort to resolve the issue by mutual agreement with the owners.

An Energy Ministry spokesman claimed, however, that the ruling meant that the government can take over the corporation because its generators are in East Jerusalem. In that case, the spokesman said, a body would be set up to handle power connections for consumers in the occupied territory and collect bills.

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