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Less than two months after the fanfare over the sale of the Jerusalem Post to CanWest Global Communications and Mirkaei Tikshoret Ltd. (MTL), the two new owners have fallen out. Control at the paper at this stage is in the hands of Eli Azur, MTL president and CEO.

The companies jointly bought the Jerusalem Post in November for $13.2 million from Hollinger International, but since then have failed to see eye-to-eye over policy and other issues. Sources close to the dispute said that Azur opposed the right-wing viewpoint that CanWest and its president and CEO, Leonard Asper, are advocating. Azur, the source continued, feels this is a bad strategic move, for both financial and editorial reasons.

The dispute apparently extends to personnel issues at the English-language paper and matters regarding the company's real estate assets. Sources added that CanWest wanted to appoint a new editor-in-chief from England, replacing David Horovitz.

CanWest finally lost patience and started an arbitration process on Monday, saying that Mirkaei Tikshoret had breached the joint purchase agreement.

"It is regrettable that MTL has chosen not to honor the terms of its agreements with CanWest," Asper said in a statement. "We are confident that in due course we will be awarded our ownership interest and majority position on the board of The Jerusalem Post, in accordance with these agreements."

CanWest said that MTL had refused to transfer the Post's assets, including real estate in Jerusalem and the presses, to the new joint company that was set up to manage the paper on behalf of the two buyers. CanWest also said that it had obtained a temporary restraining order from New York's State Supreme Court prohibiting MTL from selling or transfering any securities or assets of the Jerusalem Post Group; from dismissing any employees at the publications; and from changing any agreements signed by the paper.

CanWest is demanding full enforcement of all clauses of the purchase agreement, including the clause granting it the right to appoint the chairman and most of the directors of the new joint company.

As far as is known, CanWest has not yet paid its full share of the paper's cost, while Azur has paid his part through bank loans. At the time of the purchase, Hollinger - suffering from its own troubles surrounding investigations and legal battles against its former CEO and chairman Conrad Black - refused to allow CanWest to conduct a due diligence on the Jerusalem Post.