Egypt to appeal $1.76-billion compensation ruling to Israel

Egypt will appeal an arbitration ruling to compensate Israel Electric Corporation (IEC) and Eastern Mediterranean Gas company (EMG) with $1.76 billion and $288 million respectively, Egyptian daily Ahram online reported.

The ruling was announced by the Geneva-based International Chamber of Commerce on Sunday.

Egypt had been selling natural gas to Israel under a 20-year agreement, but the deal collapsed in 2012 following attacks by militants on the pipeline in Egypt's Sinai Peninsula.

The Israeli companies resorted to international arbitration after the attacks stopped the flow of gas.

IEC demanded a compensation of $3.8 billion, while EMG, which oversaw the deal, demanded $1.5 billion.

Following reports of the arbitration ruling, Egyptian Prime Minister Sherif Ismail said that negotiations between private Egyptian and Israeli companies to import gas from Israel would be halted.

The Egyptian government has ordered private companies to freeze dialogue on gas import from Israel until a decision is made on Egypt's appeal against the recent ruling.

The government will also suspend the issuance of permits to companies cooperating with Israel on gas deals.

Ismail added that the appeal would be submitted within the next six weeks.

State-owned Egyptian Petroleum Company (EGPC) and Gas Company (EGAS) will appeal the ruling in the courts of Switzerland through its legal consultant Shearman & Sterling LLP.