By Ovunc Kutlu
ANKARA
Despite a Swiss arbitration court orders to Israel to pay Iran $1.1 billion over a dispute about an oil pipeline, Israeli law prohibits the transfer on the pretext that Iran is an “enemy” country.
An arbitration court in Switzerland had ordered Israeli oil companies, the Eilat-Ashkelon Pipeline Company and its sister firm Trans-Asiatic Oil, to pay $1.1 billion to Iran over the dispute, Israeli newspaper Jerusalem Post and Iran's official news agency IRNA reported Wednesday.
However, Yoav Harris, legal expert and head of the Maritime Department at the Haifa-based DTKGC law firm in Israel, told Anadolu Agency Thursday: "No money can be transferred to Iran according to Israeli law".
"According to the mandatory 'Order of Trade with the Enemy,' no trade is allowed with an enemy as specified by a warrant issued by the Minister of Treasury, Yuval Shtainitz, who issued such a warrant on May, 2011, prohibiting trade with Iranian companies named in the warrant," Harris explained.
"Therefore, because of its domestic legislation, Israel can argue that it cannot transfer any amount to Iranian companies," he added.
In 1968, the two countries began a joint project during the reign of Shah of Iran Mohammad Reza Pahlavi to sell oil from Iran to Israel, which was planned for eventual distribution to Europe.
The oil was delivered from Iran to Eliat in southern Israel at the Gulf of Aqaba, and was carried through an oil pipeline to Ashkelon in northern Israel near the Mediterranean Sea.
However, after the revolution in 1979, Iran stopped oil transfer to the pipeline and halted cooperation with Israel, Harris said.
The tale of four Iranian oil vessels
Harris said that during the days of the Iranian revolution, four vessels carrying oil had left Iran and arrived in Israel to discharge their oil; however, when the vessels returned to Iran, the revolution had taken place and everything changed within a few days.
The legal expert said that one of the issues was that the payment for the oil supplied by the four vessels, amounting to $450 million, was not given to Iran.
"From the Mediterranean, the oil was taken to Europe to be sold, and the parties distributed the amount among themselves," he said, adding: "The bigger arbitration is related to the whole enterprise and how it’s operated since 1979, and the interest of the sales from that".
In 1989, the arbitration court in Switzerland had ordered Israel's Trans-Asiatic Oil to pay $500 million to Iran, including interest; however, the payment was not finalized.
"When you have arbitration with someone, you recognize him and you almost see him as your colleague with whom you have a commercial dispute, not as your enemy," Harris said.
Harris added that the arbitration between Iran and Israel could only begin when both parties hold discussions in good faith and aim to resolve the dispute through mutual agreement.
At the moment, however, the dispute doesn’t seem to getting resolved anytime soon as there is no indication yet that Israel will stop listing Iran as an enemy under its domestic law.
