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.
August 8, 2016
by Rachel Kaplan
The Swiss Supreme Court in Lausanne has ordered the Israel-controlled Trans-Asiatic Oil Company to pay a debt of $1.2 billion to Iran’s national Oil Company.
According to Global Arbitration Review, which published the Swiss court’s ruling, Iran’s oil company has been removed from the sanctions regime, so there is no legal obstacle to paying it any money.
On June 27, the court directed Trans-Asiatic to pay the Iranians 250,000 Swiss francs (about 1 million shekels, or $260,000) of the monies that have been deposited with the court, and another 200,000 francs in court costs.
Trans-Asiatic appealed, and lost, saddling the company with a heavy fine.
The lost appeal is the latest skirmish between Israel and Iran over an oil transporting and marketing partnership the two countries formed before the 1979 Islamic Revolution.
The partnership had two parts: the Eilat-Ashkelon pipeline, which operated overland to stream Iranian oil from the Red Sea to the Mediterranean, and Trans-Asiatic Oil Ltd (TAO), which was registered in Panama, operated out of Tel Aviv, and ran a fleet of tanker ships and marketing channels to sell Iranian oil to Europe.
The partnership, signed in 1968, lasted only 11 years. In 1979, after the Islamic Revolution, Iran cut off all ties with Israel. Despite the diplomatic cold shoulder, Iran still faced off with Israel in three different legal procedures, in an attempt to glean money for the oil it forwarded to Israel on credit before the revolution, for the value of their half of the partnership.
The total disputed sum is in the ballpark of $7 billion. Since the Iranian oil company has been formally separated from Iran, global financial sanctions don’t apply to it.
In 2015, two of three arbitrators ordered TAO to pay Iran some $1.2 billion for 50 oil deliveries made before the revolution, along with $362 million in interest. The arbitrators rejected a countersuit by Israel, claiming the debt should be erased to repay Israel for all the oil which Iran failed to deliver after the revolution.
According to Israel, the original agreement called for Iran to supply oil until 2017.
An Iranian source last year leaked the results of the arbitration, but Israel, which treats the arbitration with Iran as classified, refused to comment on the matter, other than a vague statement that it would not pay Iran.
TAO attempted to appeal the latest Swiss verdict on technical grounds, but was denied the appeal, and ordered to pay the compensation and court costs to Iran.
Reported on December 31, 2017
by Ari Rabinovitch, editing by Larry King
JERUSALEM (Reuters) – An oil pipeline company established decades ago by Israel and Iran, and a new Israeli company that is meant to replace it, can continue to operate secretly, an Israeli parliamentary committee ruled on Sunday.
The Eilat-Ashkelon Pipeline Co (EAPC) was a joint venture set up in 1968, when the two nations were friendly, to transport Iranian oil via Israel to the Mediterranean. Ties were cut after Iran’s 1979 Islamic revolution, and the enemies are now locked in arbitration that could be worth billions of dollars.
Although Iranian oil no longer flows through the pipeline, EAPC has become a major distributor of oil in Israel, with ambitions to become a leading trade hub.
It also added a reverse-flow system so oil from the Black or Caspian Seas can be shipped from Eilat, Israel’s southernmost city and port, to southern Asia and the Far East, and increased its storage capacity for traders in the region.
Israel, worried about national security, maintains tight control over EAPC, to the extent that articles about its business dealings must pass through the military censor.
Instead of renewing EAPC’s concession, which came up this year, Israel formed a new company with the same initials, the Europe Asia Pipeline Co, owned by the government. It will take over the original EAPC’s responsibilities by September, with an option to extend the handover period an additional six months.
Parliament’s Foreign Affairs and Defense Committee said in a statement on Sunday that it had extended the gag order on EAPC for five more years and broadened it to include the new company, known as EAPC-B, as well.
Calls to end the secrecy surrounding EAPC emerged after its pipe burst in 2014, spilling millions of liters of oil into a desert nature reserve in Israel’s worst spill.
After an Israeli environmental group petitioned the Supreme Court, the gag order was narrowed slightly to exclude issues like environmental impact and safety measures. The company’s primary dealings, including the sources of oil and how it is used, are still under censorship.
Israeli Pipeline, Once A Link to Iran, Will Remain A Mystery
Video (mirrored) published on December 31, 2017 courtesy of Wochit News