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Israel: Benefits to Active Reserve Soldiers in Public Tenders

(July 25, 2012) On June 7, 2012, the Supreme Court of Israel rejected a petition by the Islamic Association in Jaffa to void government decisions that had established the right of Israel Defense Forces (IDF) reservist soldiers to receive a 15% discount on the price of land allocated for residential housing and advertised in public tenders throughout the country, particularly in the city of Jaffa. The Association argued that the decisions that established the right to the discount constituted a violation of the right to equality of all citizens of Israel, especially in consideration of the grave housing shortage suffered by the Arab residents in Jaffa. (H.C. 7872/10 Islamic Association in Jaffa v. Prime Minister of Israel [in Hebrew], State of Israel: the Court Authority website (last visited July 17, 2012).)

According to the Court, the grant of a reasonable and proportional benefit in recognition of IDF reservists' “unique and significant contribution to state security” generally did not violate the right to equality. The Court recognized, however, that the grant of a discount to reservists in public tenders constituted preferential treatment. The grant of the discount, therefore, presented a contradiction between reservists' right to be duly compensated and the right of all bidders to equal opportunity which is a central basis of public tenders. (Id.)

Having reviewed data on enforcement of the grant of the discount, the Court determined that the number of reservists who benefited from it was extremely limited throughout the country, and specifically in Jaffa, where only one reservist had actually won a tender. In the absence of any concrete factual basis indicating actual harm or any proof of a connection between the exercise of the discount right by only one reservist in Jaffa and the housing shortage for Arab residents in that city, a shortage that the Court held resulted from the rise in property values in the Tel Aviv-Jaffa area, a legal determination on the constitutionality of the grant provisions was deemed by the Court as unnecessary. In reaching this decision, the Court relied on the Ripeness Doctrine, first developed in American law before having been adopted by Israeli courts in prior decisions. Based on that doctrine, the Court may refrain from entertaining cases that are not yet ripe for adjudication either because of the lack of a factual basis for alleged harm or because the alleged harm has not yet materialized. (Id.)

The Court regretted that of all the possible benefits that might be provided in connection with housing, including the provision of mortgages under better terms, the government chose to provide what the Court termed “an insignificant and problematic benefit in public tenders.” (Id.) Such a benefit could not equally reach all reservists, because only those that win the tenders may utilize the discounts; the higher the price of the property, the higher the discount, up to a ceiling of NIS50,000 (about US $12,539). The Court recommended that the government review its policy on the grant of discounts. Additionally, the Court held that if and when it is found that the enforcement of the government decisions that constitute the discount indeed resulted in harm to a specific petitioner, the Court would reevaluate the discounts' constitutionality. (Id.)