Egypt to appeal against verdict to pay $1.76 billion compensation to Israel in gas dispute

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Monday 07 Dec 2015 - 16:26 Makkah mean time-25-2-1437 Cairo, (IINA) - Egypt said on Sunday it would appeal an order by international arbitrators to pay $1.76 billion in compensation to state-owned Israel Electric Corp for halting gas supplies three years ago, and freeze gas import talks until the dispute was resolved, Reuters reported. Egypt had been selling natural gas to Israel under a 20-year agreement, but the deal collapsed in 2012 following months of attacks on the pipeline by militant groups in Egypt's Sinai Peninsula, which borders Israel and the Gaza Strip. Israel Electric (IEC) was forced to turn to more expensive fuels to generate electricity. The company took the issue to arbitrators at the International Chamber of Commerce, demanding $4 billion from the suppliers, Egyptian Natural Gas Holding Company (EGAS) and the Egyptian General Petroleum Corporation (EGPC), and the firm operating the pipeline, Eastern Mediterranean Gas (EMG). IEC said on Sunday that 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. EGPC and EGAS noted in a statement that the arbitrator had also ordered them to pay $288 million to EMG and that they would appeal both rulings. They said the compensation awarded to EMG amounted to about 19 percent of the $1.5 billion it had sued for, while the award to Israel Electric amounted to under 40 percent of the total it was seeking. The companies said they had "received instructions from the Egyptian government to freeze negotiations between companies to import gas from Israeli fields or to award import approvals until the legal position regarding the arbitration ruling and the results of the appeal are clear". Egyptian Prime Minister Sherif Ismail said on Sunday an appeal would be filed within six weeks. AG/IINA