By SHARON UDASIN \ 12/08/2015 21:20
Following the IEC’s announcement on Sunday, the Egyptian government responded by declaring that it would appeal the order.
East Mediterranean Gas (EMG) – the multinational body responsible for the operation of the now defunct gas pipeline from Egypt to Israel – has been awarded $324 million from two Egyptian national gas companies, lawyers for the firm reported on Tuesday.
With the conclusion of arbitrations at the International Chamber of Commerce on Thursday, EMG is now entitled to receive the $324m. sum, as well as a substantial portion of the company's legal fees and arbitration costs, from the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian General Petroleum Corporation (EGPC), a statement from the attorneys said.
The announcement comes two days after the Israel Electric Corporation revealed similar news, in which the International Chamber of Commerce awarded the Israeli company $1.76 billion from the same two firms, due to damages incurred from a cessation in gas supply in 2012.
In 2008, EGPC and EGAS began selling gas to the IEC, through the EMG pipeline – supplying the country with about 40 percent of its natural gas provisions. Yet saboteurs began thwarting the flow through Sinai pipeline explosions in 2011, which ultimately led the Egyptian government to terminate the gas sale agreement with Israel in April 2012.
Following the IEC’s announcement on Sunday, the Egyptian government responded by declaring that it would appeal the order as well as freeze gas import talks with Israel until the matter was resolved. While full-fledged gas deals between the two countries have not yet been realized, four letters of intent between the Israel reservoir developers and companies in Egypt have been signed over the past year-and-a-half.
During a Knesset Economic Affairs Committee discussion on Tuesday, Prime Minister Benjamin Netanyahu briefly referred to the matter, explaining that on Monday, he informed the Egyptian government that he would be sending a special envoy to Cairo to discuss the matter.
“I believe that a solution will be achieved for the common interests of both sides,” Netanyahu said.
On Monday, Israel’s Tamar and Leviathan gas reservoir partnerships stressed that the Egyptian government’s threats would have no impact on gas export negotiations, which are continuing to take place with private companies operating there.
Regarding EMG's award, the company's legal team – the Tel Aviv-based Freshfields, M. Firon & Co., and the Cairo-based Shahid Law Firm – stressed that the decision has "vindicated EMG's recourse to International Chamber of Commerce arbitration in Geneva over EGPC and EGAS's objections."
In addition, the lawyers continued, the award has "held that EGPC and EGAS repudiated both the general gas sale agreement with EMG and a tripartite agreement between EMG, EGPC/EGAS, and the IEC, which covers the gas volumes that EMG sold to IEC."
“EMG continues to pursue substantial claims against EGPC/EGAS in another arbitration proceeding, including in relation to the majority of gas volumes which were not addressed by the International Chamber of Commerce award,” their statement added.
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