A Swiss court has ruled that Israel must pay Iran’s shares in a joint Iranian- Israeli company. Israeli media report that the court ruled against Israel in its two-decade financial dispute with Iran regarding the Eilat-Ashkelon oil pipeline. This is a preliminary ruling, and Israel will likely appeal the decision.
The Jewish Business daily says the finalization of the ruling could mean Israel would have to pay $50 million in damages. Haaretz reports, however, that the damages could be anywhere between $50 million and $100 million.
Haaretz writes that the court ruling was issued a year ago and was never publicized. Israel opposed the referral of the dispute to court but was finally forced to face the suit.
The report indicates that the company was established in 1968 to facilitate oil transportation from Iran to Europe through an alternative route, because the Suez Canal was closed due to disputes between Egypt and Israel.
At the time of the 1979 Revolution in Iran, Haaretz reports, the company had 242 kilometres of pipeline and 800,000 tons of crude oil, which was worth $120 million at the time and would now fetch $400 million. Half of this is to be paid back to the Iran.
The Islamic Republic claimed its share of the company in 1994 but attempts at appointing judges from the two countries to resolve the matter did not succeed. In 2004, it filed a formal suit at Swiss and French courts.