Court backs Iran vs. Israel in pipeline case

The Swiss Federal Tribunal has rejected an arbitration appeal and left intact an order that Israel pay Iran about $1.1 billion plus interest in a longstanding dispute over a crude-oil pipeline the countries built cooperatively before the Islamic Revolution of 1979.

The 158-mile, 42-in. pipeline connects the Israeli ports of Eilat on the Gulf of Aqaba with Ashkelon on the Mediterranean. An Israeli-Iranian joint venture built it to bypass the Suez Canal, which was blockaded during the 1967 Middle East War (OGJ Online, Nov. 6, 2003). Iran’s revolution ended relations with Israel.

Eliat-Ashkelon Pipeline Co. operates the now-bidirectional pipeline, as well as a 16-in. products pipeline between Eliat and Ashkelon and crude lines between Ashkelon and refineries at Haifa and Ashdod.

The Swiss order covers Iranian claims to its share of revenue from pipeline operations during the decade before the revolution. It also awarded Iran $461,000 in court costs and lawyer fees.

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