gas pipeline 311 R.
(photo credit: REUTERS)
Ampal-American Israel Corporation
announced Sunday that Egyptian Mediterranean Gas, in which it holds a 12.5
percent stake, has taken legal action against Egyptian and Israeli institutions,
among them the Egyptian government and the IEC.
EMG announced to Ampal
that it intends to initiate arbitration procedures with the International
Chamber of Commerce against the Egyptian General Petroleum Corporation, the
Egyptian Natural Gas Holding Company and Israel Electric
Egyptian Mediterranean Gas submitted the request for
arbitration as a result of EGPC/EGAS’s prolonged disruptions of gas supply that
they committed to supply under their contract with EMG, which has prevented EMG
from supplying its customers, among them the IEC. EMG is seeking compensation
from EGPC/EGAS for damages resulting from contractual breaches.
disruptions in gas supply this year are partly due to terrorist acts on the
Egyptian-Israeli gas pipeline, following a deterioration in relations between
Israel and Egypt. Therefore, Ampal and other EMG shareholders have initiated
arbitration procedures against the Egyptian government to protect their
In July 2011, EMG shareholders announced that they would sue
the Egyptian government for $8 billion in damages caused them as a result of
natural gas supply disruptions in the Sinai pipeline. In addition, EMG submitted
a Request for Arbitration with the International Chamber of Commerce (ICC) to
begin arbitration proceedings with the IEC.
Ampal chairman, president and
CEO Yosef Maiman commented: “As we have said before, Ampal, as well as the other
international shareholders, are determined to pursue every available avenue to
secure the smooth operation of EMG.”
Maiman added, “Ampal, as well as
other international investors, have invested a substantial amount of money in
EMG through direct investments and in EMG’s shares. EMG’s clients have also
invested a substantial amount of money in power and industrial plants, all of
which are based upon the gas sale and purchase agreements between EMG and its
downstream clients. Moreover, these agreements are backed by the gas sale and
purchase contract between EMG and the Egypt’s state-owned upstream gas supplier
as well as by a memorandum of understanding between the Egytpian government and
the Israeli government.
“As noted previously, we hope that the Egyptian
government and the Egyptian state-controlled gas supplier elect to honor the
obligations under the gas sale and purchase contract.
However, we will
continue to take all necessary actions to protect our investments.”
and its international shareholders retained the legal services of Freshfields
Bruckhaus Deringer, LLP and M. Firon & Co. to represent them in the various
arbitrations, claims, and other legal proceedings involving the dispute and the
claims against the Egyptian government.