Published On: Mon, Aug 8th, 2016

Israel ordered to pay Iran $1.2 billion

Swiss arbitrators have ruled in favor of Iran in a case that is more than 37 years old.

 

Eilat-Ashkelon Oil Pipeline

 

A 37-year legal battle over a failed joint venture ended on Monday. The Swiss Supreme Court in Lausanne has ordered an Israeli state-owned entity, Trans-Asiatic Oil (TAO), to pay a debt of $1.2 billion to Iran’s National Iranian Oil Company (NIOC), for oil that had delivered to Israel before the 1979 Islamic Revolution, according to Global Arbitration Review reported on Monday.

Iran has won two of three arbitrations so far, with a third focused on partnership assets still being reviewed. Iran’s oil company has been removed from the sanctions regime, so there is no legal obstacle to paying it any money.

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Report: Israel Ordered To Pay Iran $1.1 Billion,  An Israeli oil company has been ordered by a Swiss court to pay $1.1 billion to Iran in compensation.

The complex dispute stems from 1968, when Shah Reza Pahlavi ruled Iran. A joint venture between Israel (TAO) and Iran (NIOC) established the Eilat Ashkelon Pipeline Co. (EAPC) to supply Iranian oil to Europe. The partnership was registered in Panama, and lasted 11 years. In 1979, after the Islamic Revolution, Iran cut off all ties with Israel.

Since the new Islamic regime cut diplomatic ties with Israel, the Jewish state did not pay half the proceeds that Iran was supposed to get. Iran sued Israel for $800 million in 2004.

Srarting the mid-1980s, Tehran initiated steps to recover the money through international arbitration proceedings in Paris and Geneva.

In May 2015, Israel said it was refusing to comply with an order by a Swiss court that it pay US$1.1 billion to NIOC.

A June 27th ruling directed Trans-Asiatic to pay Iran 250, 000 Swiss francs (about 1 million shekels, or $254, 000) from funds that had been deposited with the court, as well as cover court costs totaling 200, 000 francs ($203, 000).

Trans-Asiatic appealed, and lost, saddling the company with a heavy fine.

Israel tried several times to stop the proceedings in European courts. A Swiss court turned down on of Israel petitions in 2012. 2015 an appeal to the Swiss Federal Court also was rejected, and Israel was forced to pay $250, 000 in court costs.

EAPC, part of TAO, is one of the most secretive companies in Israel, operating under a special legal force since 1968. Any information about the pipeline or its financing is subject to censorship.

 

 

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