Report: Eilat Ashkelon Pipeline Co to pay Iran $1.1b

Ashkelon pipeline

Iran's news agency IRNA reports the Swiss arbitrator has ruled that the Israeli company must pay Iran $1.1 billion compensation

Iranian news agency IRNA reports that the arbitrator in Switzerland has ruled that Eilat Ashkelon Pipeline Co must pay Iran $1.1 billion in compensation.

Eilat Ashkelon Pipeline is an Israeli company founded in 1968 that operates the Eilat-Ashkelon pipeline. The company is jointly owned by Israeli fuel companies and the Israeli and Iranian governments.

The 1979 Iranian revolution, however, led to the dissolution of the partnership, and three international arbitration proceedings are currently taking place between Iran and Israel. In the main arbitration procedure, the Iranians are claiming that Israel confiscated Iran's share of the partnership following the Iranian revolution.

For its part, Israel is arguing that Iran is the one who violated the agreement signed when the Shah's regime was in power. Iran also alleged that it had not received payment for the crude oil supplied to Israel before the revolution.

Eilat Ashkelon Pipeline made the headlines in early December when five million liters of crude oil from the Beer Ora junction leaked in the direction of the Evrona Nature Reserve. The leak was caused when a pipe moving crude oil from Eilat to Ashkelon was being moved several hundred meters east in the direction of Highway 90. The new pipe was unable to withstand the pressure from the flow of oil, and broke.

The Ministry of Finance refused to confirm or deny the report but said it would not be paying anything to the Iranians. "Without relating to the heart of the matter, we point out that according to the Law for Trading with the Enemy it is prohibited to transfer money to an enemy country including the Iranian National Oil Co."

Published by Globes [online], Israel business news - - on May 20, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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