Israel says it will not pay a $1.1 billion award to Iran over a dispute dating back to the period of the Islamic Revolution, won by Tehran this week in the Swiss Federal Court.
“Under the laws of trade we cannot transfer funds to an enemy country,” read a statement issued by the Finance Ministry on Wednesday.
The response came after the court ordered the Eilat Ashkelon Pipeline Company (EAPC), to pay the National Iranian Oil Company (NIOC) $1.1 billion over a joint venture that began long before the ayatollahs seized Tehran’s government. The plaintiffs also demanded $7 million in legal fees, although it is not clear whether the court approved the charge. In addition, the court allowed Iran to file a $7 billion arbitration claim against the Jewish State.
In 1968, the two countries made a deal to carry oil from Asia to Eilat and on to Europe. At the time, the NIOC delivered 14.75 million cubic meters of crude oil, worth $450 million, to Israel’s Trans-Asiatic Oil (TAO), Ltd.
The oil moved via a pipeline that reached from Israel’s southernmost port eastward to its Mediterranean port of Ashkelon, and then up the coast to its northern port of Haifa.
Today, the EAPC pipeline in Israel stretches approximately 750 kilometers, according to the company’s website.
The ayatollahs cut off Iran’s business with Israel – and its deal with EAPC –as soon as the ruling Shah was eliminated from the government, saying the Islamic Republic did not recognize Israel as a legitimate nation. To this day, Iran still vows to “wipe the Zionist entity from the map of the world.”
Israel seized Iranian assets and launched a counter-suit to offset its own losses after the deal went sour.