In a wide ranging decision that could save the government and agricultural settlements hundreds of millions of shekels and speed up land development, the High Court of Justice has ruled that the Jewish Agency is not entitled to payments when farm land is rezoned for other purposes or confiscated.
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The decision, which was handed down last week, was made in the context of a multiyear battle between two moshavim, the state and the Jewish Agency after 1,000 dunams (250 acres) of the moshavim’s land was confiscated in 1994 to make way for an expansion of Ben-Gurion International Airport.
But the decision by a three-judge panel headed by Justice Esther Hayut rejected the fundamental claim as a holder of land rights the Agency had asserted as part of the three-way contracts it signed decades ago with the government and kibbutzim and moshavim.
“The High Court determined that the Agency has no rights to the land in the contracts,” said attorney Gilad Neeman, which represented Moshav Tsafria, which, together with Moshav Yagel, had fought paying the Agency 12 million shekels ($3.1 million) in compensation over the Ben-Gurion confiscation.
He said the Agency has typically demanded a fee of 4% for its consent to development of any agricultural land covered by the contracts, a practice that frequently snagged planning and building efforts. “The Jewish Agency, in every place there’s been construction, had demanded a payment. Now it can no longer do it.”
The Israeli government also stands to save hundreds of millions of shekels.
TheMarker has learned that prior to the ruling, the Finance Ministry had reached an agreement after lengthy negotiations to make a substantial one-time payment to the Agency to cease all current and future claims for compensation over the land, an agreement that it will no longer have to honor.
The Agency, a quasi-government organization, said in response that it was still studying the ruling and would act accordingly.
At issue were the three-way contracts, which defined the Agency was a tenant, making it a party to any transaction involving the land. The Tel Aviv District Court ruled in the Ben-Gurion case five years ago that the two moshavim should pay the Agency 15% of the confiscated land’s value.
But in overturning the decision, Hayut said that despite the designation of the Jewish Agency as a tenant in the contracts, it never acted like one. She concluded it transferred all the rights and obligations, like taxes and rentals, to the Farmers Association and the committee managing the two moshavim.