An international court of commerce and arbitration in Cairo recently ruled that Egyptian gas companies should pay EMG compensation of $1.03 billion (after additional interest payments, amounting to $1.3 billion). The court’s decision was made a little less than a year after the arbitration in Cairo ruled that the Egyptian gas companies had canceled the agreement with EMG illegally.
EMG’s shareholders include Ampal-American Israel Corporation, which collapsed following the cancellation of the Egyptian gas supply agreement to Israel following the coup in Egypt and since 2013 is in liquidation.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.
Businessman Yossi Maiman was the controlling owner of Ampal. EMG’s claims against Egyptian gas companies around the world are the main asset by which Ampal can repay its debts to creditors, but it is not at all clear whether EMG will be able to collect the money that was awarded in its favor.
Ampal’s main asset was 12.5% in EMG, which was supposed to supply natural gas from Egypt to the Israel Electric Corporation, but could not do so due to a series of explosions in its gas pipeline in Sinai. In 2012, the Egyptians finally canceled the gas contract with EMG – a decision that reduced the huge investments made in the gas venture.
Compensation awarded in the past – were not collected
Attorney Alex Spitz, the American liquidator of Ampal, who submitted a report on the matter to the New York court, told Globes that it is now expected that other arbitration institutions that have previously ruled in favor of EMG will soon decide on the issue of compensation. This, he says, is an extraordinary success for the collection procedures that the bondholders have taken against Ampal.
Ampal acquired its shares in EMG from the controlling shareholder, Yossi Maiman, who in 2005-2007 sold EMG shares to the investment company and to institutional investors for a total of NIS 1.3 billion, mainly in cash.
Ampal’s collapse left a debt of some NIS 800 million to bondholders in Israel. In addition, the company had debts to the banks, mainly to Discount, which were arranged through the sale of the subsidiary Gadot Tanker. The compensation awarded to EMG.
This, incidentally, is not the first ruling on the subject. In 2015 EMG won a ruling in favor of the International Arbitration Institute in Paris, which set a compensation of $324 million. It is almost superfluous to note that the company did not see a single dollar from the Egyptians, even though last April the Swiss Supreme Court rejected the Egyptian gas companies’ attempt to cancel the compensation ruling.
The International Atomic Energy Agency (IAEA) recently ruled that the Egyptian gas companies violated the Treaty on Trade and Protection of Investors between Poland and Egypt, which was discussed after the Polish-born man introduced himself as a Polish citizen in order to strengthen the Prosecution’s chances Also rely on Egyptian art with Poland and Germany.
By the way, Maiman himself was charged by a court in New York about two and a half years ago to return $25 million to Ampal for a loan that Ampal granted to Merhav for an ethanol production project in Colombia, a venture that never took place. Maiman himself was personally guarantor of the repayment of the loan.
Ampal and EMG are represented in arbitrations by the law firm of Freshfields, while Ampal’s bondholders are represented by Adv. Dan Ofer, Ofer Shapira and Aryeh Danziger.
