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Tuesday, December 8, 2015
The government of Egypt is contesting the order from international arbitrators to pay Israel Electric Corp. (IEC) $1.76 billion in compensation for halting gas supplies three years ago and will freeze gas import talks until the dispute is resolved.
Egypt had been supplying natural gas to Israel until the pipeline exporting the resources saw a series of attacks by militants in Egypt’s Sinai Peninsula. Following the halt in exports, Israel was forced to turn to costlier fuels for power generation.
The company took the issue to arbitrators at the International Chamber of Commerce, demanding $4 billion from the suppliers, EGAS and EGPC, and the firm operating the pipeline, Eastern Mediterranean Gas (EMG).
IEC said that the arbitrators had ordered EGPC and EGAS to pay compensation of $1.76 billion plus interest and legal expenses. “Israel Electric will act toward the implementation of the arbitration ruling through dialogue with the gas companies,” it said.
The two Egyptian state-run firms in a statement said the arbitrator had also ordered them to pay $288 million to EMG and that they would appeal both awards.
This comes at a time when Egypt is negotiating with Israel to import much needed natural gas and both said they had received orders to halt negotiations until the legal position regarding the arbitration ruling and the results of the appeal were clear.
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