In order to set the stage for its decision on attribution and liability, the Tribunal will then review the background of the Claimants' investment in Egypt and the Respondent's alleged measures that, the Claimants say, breached provisions of the Treaty.

The operative part of the Decision provides as follows:

346. Having carefully considered the parties' arguments in their written pleadings and oral submissions, and having deliberated, for the reasons stated above, the Arbitral Tribunal unanimously decides as follows:

(a) To deny the Respondent's objections ratione personae in respect of Ampal, EGI-Fund and EGI-Series;

(b) To uphold the Respondent's objection ratione personae in respect of Mr. David Fischer;

(c) To declare that both the Centre (ICSID) and the Tribunal have no jurisdiction over Mr. David Fischer's claims in this arbitration by virtue of Articles 25(1) and 25(2)(b) of the ICSID Convention;

(d) To deny the Respondent's objection over the Claimants' Gas Supply claims based on the alleged breach of the standards of fair and equitable treatment and unlawful expropriation;

(e) To remain seized of the Respondent's objection over the Claimants' Gas Supply claims based on the alleged breach of the umbrella clause;

(f) To deny the Respondent's objection ratione materiae over the Claimants' tax claims;

(g) To deny the Respondent's objection in respect of the alleged illegality of the GSPA;

(h) To direct the Claimant Ampal to elect to pursue the MAGL portion of the claim in the present proceedings alone by 11 March 2016 or opt at that time for the pursuance of its claims in the alternative forum;

(i) To deny the Respondent's objection based on an alleged abuse of process by the Claimants subject to Ampal's compliance with para. (h) above; and

(j) To reserve its decision as to costs.

Ampal's preferred method of complying with the Tribunal's invitation would be to elect to pursue the claim for compensation arising from the portion of its interest in EMG held directly by Merhav Ampal Group Ltd (i.e., 8.21%) only in this proceeding, with Merhav Ampal Group Ltd withdrawing its entire claim in the UNCITRAL arbitration, but to leave Merhav Ampal Energy Holdings Limited Partnership to pursue its entire claim for its direct interest in EMG (8.58%) in the UNCITRAL arbitration, with Ampal withdrawing the part of its claim in this arbitration arising from the half of that 8.58% interest in EMG directly held by Merhav Ampal Energy Holdings Limited Partnership.

This election would leave no claims being pursued in both fora in relation to the same shares in EMG, and thus no overlap between compensation sought in the two arbitrations. It would preserve the protection of the ICSID Convention for Ampal's interest in EMG held directly by Merhav Ampal Group Ltd, while avoiding difficulties that would otherwise be caused by seeking to withdraw 50% of the interest in Merhav Ampal Energy Holdings Limited Partnership's compensation claim from the UNCITRAL arbitration and leaving the remaining 50% of that same claim, which involves no overlap, to be adjudicated there, with any award in that arbitration in its favour to be payable to the Limited Partnership as a whole, but with only some of the holders of its equity being entitled to its benefit.

As Ampal understands the Decision on Jurisdiction, the Tribunal's concern arises from the pursuit of compensation in relation to the same EMG shares in two different proceedings. This proposal would meet that concern. Ampal respectfully requests that the Tribunal confirm that such an election would be satisfactory to it. If it is, Ampal would remain at the Tribunal's disposal to provide any specification it may require as to the effect of this election on Ampal's claim for compensation in this proceeding.

Before definitively making such an election, Ampal would need to obtain confirmation from the UNCITRAL tribunal that it has decided to dismiss all of Egypt's objections to jurisdiction and admissibility. […][and] Ampal must receive approval from the United States Bankruptcy Court in the Southern District of New York. […]

[…]

Ampal therefore respectfully requests that the deadline for making its election be extended until the UNCITRAL tribunal has indicated whether it has decided to dismiss all objections to jurisdiction and admissibility still pending before it and until Ampal has been able to obtain the requisite court approval for it to withdraw part of its claim in this arbitration and for Merhav Ampal Group Ltd to withdraw all of its claim before the UNCITRAL tribunal.

[…]

On 21 March 2016, the Tribunal issued Procedural Order No. 7 rejecting the Respondent's request in its submission of 17 February 2016 to "[s]tay this proceeding pending the issuance of the Award in the [related] CRCICA Case No. 829/2012."

[…] to dismiss all of the Respondent's objections to jurisdiction and admissibility. Consequently, the Tribunal declares the proceedings closed in respect of the issues of jurisdiction and admissibility in accordance with Article 31(1) of the UNCITRAL Arbitration Rules.

The full reasons for the Tribunal's decision on jurisdiction and admissibility will be included in the Tribunal's Award.

On 25 July 2016, the Claimants submitted an application to the Tribunal, requesting an "indicat[ion of] whether the election that Ampal has proposed would cure the abuse of process that the Tribunal found to have crystalized once both investment tribunals had found that they had jurisdiction."⁶ The Tribunal ruled on 15 August 2016 that the Claimants' election would cure the abuse of process.

The Claimants write respectfully to inform the Tribunal that Merhav Ampal Group Ltd (Merhav AGL) no longer seeks any compensation for the harm caused to it through its direct shareholding in EMG, as more specifically described in the attached 9 March 2016 letter from the claimants in the related ICSID arbitration to the ICSID tribunal. The purpose of this withdrawal is to eliminate any overlap in the compensation claimed in this and the related ICSID arbitration, now that both tribunals have confirmed their jurisdiction. The modification of the Claimants' claim to compensation is reflected in tabular form in the annex to this letter.

The Claimants' investment in Egypt has its origin in the 1979 Peace Treaty between Israel and Egypt,⁷ which envisaged an inter-governmental commitment to energy interdependence between the two countries.

To carry out its gas sector policies, Egypt established the Egyptian Natural Gas Holding Company ("EGAS") in 2001, a local holding company for natural gas wholly owned by the Egyptian government. The Ministry of Petroleum also formed GASCO, a subsidiary of EGAS, which would own the pipeline system to be constructed in Egypt.⁹

Independent Israeli and Egyptian investors began discussing gas exports to Israel with the Egyptian government in the late 1990s. These discussions lead to the formation of the East Mediterranean Gas Company S.A.E. ("EMG").¹² EMG's primary purpose was to purchase natural gas from Egypt and export it to Israel through a pipeline between Al-Arish in Egypt and Ashkelon in Israel.¹³ As a free-zone company, EMG benefitted from special status under Law 8/1997.¹⁴

The construction of a pipeline from Egypt to Israel was a capital-intensive project that required firm supply commitments from the Egyptian government. According to the Claimants, without such commitments, EMG would have been unable to secure financing for the pipeline or commitments from Israeli customers to purchase large quantities of gas on a long-term basis¹⁵, in particular from State-owned Israel Electric Corporation ("IEC").

As the Egyptian government maintained control of the country's hydrocarbon resources, EMG approached the Egyptian General Petroleum Corporation ("EGPC") with a view to purchasing gas directly at the source, rather than from private gas producers.¹⁶ EMG suggested to EGPC that it acquire a 10% stake in EMG. On 12 April 2000, EGPC's Board of Directors accepted both proposals. EGPC thus became a shareholder of EMG in April 2000.¹⁷

In 2010, EMG experienced delivery irregularities, which impacted its ability to reimburse its loan installments to NBE and to supply full contractual volumes to its customers. This prompted complaints by EMG's anchor buyer, IEC.⁴⁴ At a December 2010 meeting in Cairo between EGPC/EGAS, EMG and IEC, the Claimants write, "EGPC/EGAS acknowledged that Egypt's inability to deliver full contractual quantities was due to production shortages in Egypt, which had resulted from the overextension of gas supply capabilities and mismanagement of upstream resources. EGPC/EGAS sought to assuage the concerns of EMG and IEC about the security of contractual volumes, laying out plans to develop new gas fields and to accelerate the development of delayed projects. EGPC/EGAS also confirmed their commitment to deliver extra gas to compensate for the substantial shortfalls that had accumulated since the start of delivery under the Source GSPA."⁴⁵

After an attack on 12 July 2011, EMG did not receive any gas for 99 days. During this period of non-delivery, EGAS/EGPC, on 24 August 2011, threatened to terminate the Source GSPA, alleging that EMG had failed to pay invoices for gas supply in early 2011.⁵² The Claimants aver that: "[t]he termination threat […] took no account of EGPC/EGAS’s own non-performance, the partial payments that EMG had made on the invoices in question, or the fact that the alleged arrears on which the threat was based were counterbalanced by Shortfall Compensation in accordance with the Source GSPA."⁵³

(i) revoked EMG's tax-free status, further burdening EMG's finances and significantly lowering the value of the Claimants' investment;

(ii) deliberately withheld contractual quantities from EMG in order to coerce price increases and attempt to decrease contractual quantities;

(iii) overcommitted to supplying gas to third parties and failed to make sufficient quantities available to EMG for delivery to Israeli customers in breach of the State's supply obligations;

(iv) failed to prevent sabotage of the pipeline system and then failed to ensure that its State entities repaired the resulting damage within a reasonable time, delivering no gas at all to EMG for months at a time; and

(v) sought to make up contractual grounds in order to carry out government policy and put an end to all exports to Israel.⁶⁵

The Claimants request that the Tribunal grant the following relief:

(a) DISMISS all of Egypt's objections to the jurisdiction of the Tribunal and the admissibility of the claims;

(b) DECLARE:

(i) that Egypt violated Article II(4) of the US Treaty (or Article 2(2) of the UK Treaty, applicable to the US Claimants through Article II(1) of the US Treaty), and customary international law by failing to accord the Claimants' investments fair and equitable treatment and impairing their investments through the adoption of unreasonable measures;

(ii) that Egypt violated Article II(4) of the US Treaty (or Article 2(2) of the UK Treaty, applicable to the US Claimants through Article II(1) of the US Treaty), and customary international law by engaging in arbitrary and discriminatory measures against the Claimants' investment because it was selling natural gas to Jews in Israel;

(iii) that Egypt has violated Article 2(2) of the UK Treaty (applicable to the US Claimants through Article II(1) of the US Treaty), and customary international law by failing to observe obligations it has entered into with regard to the Claimants' investments;

(iv) that Egypt has violated Article 2(2) of the UK Treaty (applicable to the US Claimants through Article II(1) of the US Treaty), and customary international law by failing to provide the Claimants and their investments with full protection and security; and

(v) that Egypt expropriated the Claimants' investments without payment of adequate and effective compensation, a public purpose, or due process of law in violation of Article III(1) of the US Treaty, and customary international law.

(c) ORDER Egypt to pay compensation to the Claimants of no less than US$ 635.0 million and, to the extent applicable, DECLARE that the sum awarded has been calculated net of Egyptian taxes;

(d) ORDER Egypt to pay pre- and post-award interest at Egypt's sovereign borrowing rate (as updated), compounded annually, accruing until payment is made in full;

(e) ORDER Egypt to indemnify the Claimants in full with respect to any Egyptian taxes imposed on the compensation awarded to the extent that such compensation has been calculated net of Egyptian taxes;

(f) ORDER Egypt to pay all of the costs and expenses of this arbitration, including the Claimants' reasonable legal and expert fees, and the fees and expenses of the Tribunal; and

(g) AWARD such other relief to the Claimants as the Tribunal considers appropriate.⁶⁶

(a) Stay this proceeding pending the issuance of Awards in each of CRCICA Case No. 829/2012 and ICC Case No. 18215/GZ/MHM, dismissing the claims made by EMG or awarding damages in respect of such claims;

(b) Alternatively, dismiss the Claimants’ claims in their entirety for lack of jurisdiction and/or as inadmissible;

(c) Alternatively, dismiss the Claimants’ claims on the merits;

(d) In the event that the Tribunal finds that the Respondent is liable to the Claimants as a matter of principle, stay any decision on quantum pending the issuance of Awards in each of CRCICA Case No. 829/2012, ICC Case No.18215/GZ and PCA Case No. 2012-26, dismissing the claims made by EMG or its shareholders (as applicable) or awarding damages in respect of such claims;

(e) In any event, order the Claimants jointly and severally to pay all of the costs of this arbitration as well as the Respondent’s legal costs and expenses in connection with this arbitration, including but not limited to its counsel’s fees and expenses and the fees and expenses of its experts; and

(f) Grant the Respondent such further relief as the Arbitral Tribunal considers appropriate.⁶⁷

Although the Claimants pleaded their case in a number of different ways, the Tribunal, in the light of its Decision on Jurisdiction and its analysis below of the law and evidence, formulates the issues that it is called upon to determine in this Decision on Liability and Heads of Loss as the following:

(1) Attribution. To the extent that the Claimants rely on the acts or omissions of EGPC or EGAS as engaging the responsibility of the Respondent under the Egypt-US BIT, to what extent are the actions of EGPC or EGAS attributable to the Respondent as a matter of international law (V)?

(2) Revocation of tax exemption to 2025. Was the Respondent's revocation by Law 114 of 2008 of the tax exemption granted to EMG by Decree No. 1020 of 2000 until 2025 a measure "tantamount to expropriation" of the Claimants' investment under Article III of the Egypt-US BIT giving rise to the Respondent's obligation to compensate the Claimants for the fair market value of the expropriated investment (VI B)?

(3) Revocation of tax exemption after 2025. Does such revocation give rise to a claim for breach of Article III beyond 2025 (being the date of expiry of the licence for tax exemption granted to EMG by Decree No. 1020) (VI C)?

(4) Execution of First Amendment. As a matter of fact, was the execution of the First Amendment to the GSPA on 31 May 2009 procured by the Respondent's coercion of EMG, so as to be capable of giving rise to a separate claim by the Claimants of breach of treaty (VI D)?

(5) Delivery shortfall until January 2011. Does the alleged shortfall in deliveries of gas under the GSPA from July 2009 until January 2011 (prior to the attacks on the Pipeline) constitute a breach of the Claimants' treaty rights by the Respondent (VI E 1)?

(6) Protection of Pipeline February 2011–May 2012. Did the Respondent breach Article II 4 of the Egypt-US BIT by failing to exercise due diligence in the protection and security of the Claimants' investment as required by international law in response to the attacks on the Pipeline between 5 February 2011 (the date of the first attack) and 9 May 2012, the date on which EMG accepted EGAS's repudiation of the GSPA (VI E 2)?

(7) Termination of the GSPA. Did the Respondent expropriate the Claimants' investment in EMG when EGAS terminated the GSPA with effect from 9 May 2012 (VI E 3)?

The Tribunal will deal with each of these issues in turn.

(i) The Respondent was not a party to the GSPA;⁷⁰

(ii) The Respondent was not a party to the Tripartite Agreement – the Tripartite Agreement only created obligations for EGPC and EGAS vis-à-vis IEC, not EMG;⁷¹

(iii) EMG was not a party to the Egypt-Israel MoU – the fact that EGPC, EGAS and EMG decided to include a copy of the MoU as a schedule to the GSPA does not have any legal effect.⁷²

The articles do not attempt to define the content of the international obligations, the breach of which gives rise to responsibility. This is the function of the primary rules, whose codification would involve restating most of substantive customary and conventional international law.⁷⁵

[T]he attribution to Respondent of AIBO's and TAROM's acts and conduct does not render the State directly bound by the ASRO Contract or the SKY Contract for purposes of the umbrella clause. […] Attribution does not change the extent and content of the obligations arising under the ASRO Contract and the SKY Contract, that remain contractual, nor does it make Romania party to such contracts.⁷⁷

The Respondent asserts that it thus follows that "the characterisation of the contracting party as organ of the State under the ILC Articles is wholly irrelevant when it comes to determining whether a State is bound by a contract. What is relevant is whether the State itself has entered into the contract."⁷⁸ The Respondent submits that many arbitral tribunals have confirmed the inapplicability of the rules of attribution to contractual obligations undertaken by entities having a separate legal personality has been confirmed by many arbitral tribunals.⁷⁹

(a) The claims in relation to the revocation of EMG tax-free status (issues (2) and (3) above) depend upon decisions of the Respondent itself, not EGPC or EGAS;

(b) In considering the claim in relation to the execution of the First Amendment, it is first necessary to decide on the facts whether the Claimants' plea of coercion is made out on the facts (issue (4)). Whether or not any acts of EGPC or EGAS in relation to the First Amendment are attributable to the Respondent will be academic unless the factual predicate for the Claimants' claim is made out;

(c) A determination of attribution in relation to alleged delivery shortfalls prior to the attacks on the pipeline (issue (5)) would only arise in the event that the Tribunal finds that this claim is capable of constituting a breach of treaty and not merely a breach of contract. So it is first necessary to characterise the nature of this claim; and,

(d) The claim for failure to protect the Pipeline from attack (issue (6)) is a claim of direct responsibility on the part of the Respondent State and does not depend upon the attribution of acts or omissions of EGPC/EGAS.

1. The conduct of any State organ shall be considered an act of that State under international law, whether the organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central Government or of a territorial unit of the State.

2. An organ includes any person or entity which has that status in accordance with the internal law of the State.⁸²

The conduct of a person or entity which is not an organ of the State under article 4 but which is empowered by the law of that State to exercise elements of the governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in the particular instance.⁸⁵

The conduct of a person or group of persons shall be considered an act of a State under international law if the person or group of persons is in fact acting on the instructions of, or under the direction or control of, that State in carrying out the conduct.⁸⁷

Conduct which is not attributable to a State under the preceding articles shall nevertheless be considered an act of that State under international law if and to the extent that the State acknowledges and adopts the conduct in question as its own.⁹⁰

(i) It acts within the confines of State policy;⁹⁷

(ii) Its funds are public funds and its budget requires parliamentary approval;⁹⁸

(iii) Its employees are public employees;⁹⁹

(iv) Its board is its supreme power and is populated entirely with State officials in their official capacity;¹⁰⁰and

(v) The Minister of Petroleum is the Chairman of EGPC's board and has authority to approve, amend, or annul the board' decisions.¹⁰¹

(iv) The Prime Minister created EGAS in 2001 as a public sector holding company;¹⁰⁴

(v) EGAS's general mandate is to "operate in all natural gas activities" in Egypt. In particular, it is empowered to "assume the management and supervision of gas activity as shall be determined by the Ministry of Petroleum";¹⁰⁵

(vi) EGAS is wholly-owned by EGPC;¹⁰⁶

(vii) EGAS's annual profits are remitted to the Ministry of Finance;¹⁰⁷

(viii) As a public sector holding company, EGAS was assigned as supervisory Minister the Minister of Petroleum.¹⁰⁸ The Minister has played an active role in the management of EGAS since its incorporation. The Chairman of EGAS's Board reports to the Minister and provides him with, inter alia, a quarterly report on the company's activities.¹⁰⁹ The Minister, in turn, is required to submit a report on EGAS to the Cabinet on a biannual basis.¹¹⁰

Egyptian courts have confirmed that the act of entering into a natural gas contract is an exercise of governmental authority.¹¹³ EGPC and EGAS's commitments to supply natural gas through written and verbal assurances, and ultimately through gas supply contracts such as the Source GSPA […] and the Tripartite Agreement, were therefore exercises of governmental authority. […] [T]he Prime Minister, the Minister of Petroleum, and the Minister of Finance confirmed this fact before the Egyptian Supreme Administrative Court.¹¹⁴ These facts alone are sufficient to conclude that EGPC and EGAS exercised sovereign authority when undertaking commitments and providing assurances to the Claimants and their investment.¹¹⁵

(i) Numerous documents demonstrate that EGPC and EGAS entered into the Source GSPA pursuant to the instruction and under the control of the Egyptian State;¹¹⁷

(ii) Egyptian government officials continued to exercise decisive influence over EGPC and EGAS after signature of the Source GSPA: when negotiations for the First Amendment were imposed upon EMG and its shareholders, the Ministry of Petroleum and the Ministry of Trade and Industry represented EGPC and EGAS in the negotiation,¹¹⁸ and EGPC and EGAS did not sign the First Amendment until the relevant government ministries approved its terms;¹¹⁹

(iii) When they negotiated the Source GSPA and the First Amendment, EGPC and EGAS represented the Egyptian State and acted under government direction and control. EGPC and EGAS held themselves out as representatives of the government, and represented to EMG and the Claimants that they were acting under the control of the highest levels of the Egyptian government.¹²⁰

As to the application of Article 11, the Claimants contend that when Egyptian government officials threathened to cancel the GSPA, they affirmed that Egypt "is willing to renegotiate the deal, though it would be under a new contract, with new terms and prices".¹²¹ This was clearly an act of the State.

The matter is presented to the esteemed board for its information and approval.

Decision: After a discussion and review of different opinions:

The Board noted and approved the action taken to terminate the contract to supply and purchase gas, signed with East Mediterranean Gas Company on 13 June 2005."

At the next Board session of the Authority, held on 19/6/2012, the above-mentioned decision of the Authority's Board of Directors was ratified in the presence of the esteemed members of the Board.¹²²

The matter is presented to the respectful board for information and acknowledgement .

Decision: after deliberations and in light of the opinions exchanged:

The board has been informed and has acknowledged what has taken place regarding the termination of the Gas Supply and Purchase Agreement entered into with EMG on 13 June 2005.

In the following session of the board of directors held on 19/6/2012, the decision of EGPC's board of directors has been ratified in the presence of the respectful members of the board of directors.¹²³

illustrate that State ministers, sitting in their official capacities [as opposed to the individuals themselves], control EGPC's Board and therefore EGPC, since the Board is its highest authority. The Minister of Petroleum is the designated Chairman with plenary authority to approve, amend, or annul all board decisions. It is a characteristic of Egyptian State Authorities to have boards controlled by the supervising government minister. This reflects EGPC's status in the Egyptian governmental structure as a State Authority, and therefore its status as a State organ under ILC Article 4.¹²⁵

In respect of Article 4, the Respondent submits that an entity will be a "State organ" if the internal law of the State classifies it as such.¹³⁰ An entity that has separate legal personality will not be considered as a State organ.¹³¹ Even if an entity carries out some public services, that will not make it a State organ.¹³²

The Respondent acknowledges however that an entity will be considered a State organ if, in "exceptional" circumstances it is in "complete dependence on the State", as the ICJ held in Nicaragua¹³³ and in Bosnia¹³⁴. Proof of complete dependence requires "proof of a particularly great degree of State control".¹³⁵

(i) EGAS is a private law entity, which invests funds on its own or through affiliated companies, holds its own property as domaine privé and is financially independent.¹³⁸ It is represented by the Chairman of its Board in its relationships with third parties and is managed by its Board of Directors.¹³⁹

(ii) EGPC has and manages its own independent budget, and holds its own capital and funds.¹⁴⁰ EGPC must pay corporate tax.¹⁴¹ EGPC's CEO, as EGPC's legal representative, is authorised to conclude contracts for EGPC and is not a government official. EGPC's CEO can bind EGPC in agreements without ministerial approval, which is only required when EGPC, for example, contracts for the export of petroleum products without a tender process.¹⁴²

In respect of attribution under Article 5, the Respondent contends that the conduct of the entity must be in the exercise of governmental authority, i.e. there must be an exercise of "prérogatives de puissance publique".¹⁴³ However, avers the Respondent, EGPC and EGAS's termination of the GSPA was the kind of decision any private party to a contract could have taken and the Claimants have not demonstrated that the termination was made in the exercise of governmental authority.¹⁴⁴

In respect of Article 11, the Respondent submits that it only applies when a State, in a "clear and unequivocal" manner, "acknowledges and adopts […] as its own" conduct that would not otherwise have been attributable to it.¹⁴⁷ According to the Respondent, the Minister of Petroleum did not ratify (or confirm) the minutes of the 24 April 2012 meeting and there is no evidence of "clear and unequivocal" adoption. For conduct to be adopted as its own under Article 11, the State must "identif[y] the conduct in question and make[] it its own."¹⁴⁸

Furthermore, the Respondent denies that it ever verbally undertook to supply gas to EMG.¹⁵¹ In any event, the alleged statements of Messrs. Hamdy and Zell¹⁵² cannot bind Egypt as it is well settled that international law requires that a declaration be made in public and evidence an intent to be bound in order to have a binding effect.¹⁵³

The Respondent submits that, in any event, any declaration made in respect of EGPC and EGAS's supply of gas to EMG before the conclusion of the GSPA would necessarily be superseded by the contract itself. In the words of the Burlington v. Ecuador tribunal, the purpose of these statements "was exhausted when the promises […] were turned into contractual obligations".¹⁵⁴ The same conclusion must be reached in the present case, affirms the Respondent.¹⁵⁵

For ease of reference, the Tribunal will set out these the relevant articles in full below:

"Article 4
Conduct of Organs of a State

(1) The conduct of any State organ shall be considered an act of that State under international law, whether the organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central government or of a territorial unit of the State.

(2) An organ includes any person or entity which has that status in accordance with the internal law of the State.

Article 5
Conduct of persons or entities exercising elements of governmental authority

The conduct of a person or entity which is not an organ of the State under article 4 but which is empowered by the law of that State to exercise elements of the governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in the particular instance.

Article 8
Conduct directed or controlled by a State

The conduct of a person or group of persons shall be considered an act of a State under international law if the person or group of persons is in fact acting on the instructions of, or under the direction or control of, that State in carrying out the conduct.

Article 11
Conduct acknowledged and adopted by a State as its own

Conduct which is not attributable to a State under the preceding articles shall nevertheless be considered an act of that State under international law if and to the extent that the State acknowledges and adopts the conduct in question as its own."¹⁵⁷

That EGPC is an Egyptian State organ is evidenced by the following.

(i) Pursuant to Egyptian Law No. 20 of 1976¹⁵⁸, EGPC is a "Public Authority endowed with an independent juristic personality, engaged in developing and properly utilizing the petroleum wealth and in supplying the country's requirements of the various petroleum products …".

(ii) Pursuant to Articles 2 and 3 of Law No. 20, "[t]he Authority shall be overseen by the Minister of Petroleum" and its capital shall consist of "[f]unds allocated to it by the State".

(iii) Pursuant to Articles 8 and 9 of Law No. 20, EGPC is governed by a Board of Directors. The chairman of the Board which is appointed by decree of the President of Egypt and the members are appointed by decree of the Prime Minister of Egypt on the recommendation of the Minister of Petroleum.

(iv) Pursuant to Article 11 of Law No. 20, resolutions of EGPC's Board of Directors are forwarded to the Minister of Petroleum for ratification. He is empowered to amend or cancel such resolutions.

(v) By Decree No. 164 of 2007, the President of Egypt decided that "[t]he Board of Directors of the Egyptian General Petroleum Corporation shall be composed under the chairmanship of the Minister of Petroleum and with the membership of: the Minister of Finance; the Minister of Electricity and Energy; the Minister of Investment; the Minister of Trade and Industry; the Minister of State for Local Development; the Head of the Cabinet Advisors' Panel; the Chief Executive Officer of the Egyptian General Petroleum Corporation; and three employees from the Ministry of Petroleum and the entities affiliated thereto with experience in the main activities of the Corporation. They shall be appointed by virtue of a resolution of the Board of Directors upon a recommendation by the Minister of Petroleum."¹⁵⁹

With respect to the termination of the GSPA, the Tribunal notes a memorandum signed by both EGPC's CEO and EGAS's Chairman which records that, following the advice of their international legal counsel, "EGPC and EGAS exercised their contractual rights by terminating the contract of supply and purchase of gas in the execution of the stipulations of the commercial contract concluded with EMG, and notified EMG of the termination on Thursday 19/04/2012."

Their memorandum was tabled before EGPC's Board of Directors on 24 April 2012 as recorded in the minutes of that meeting¹⁶⁴ which read as follows:

The matter is presented to the respectful board for information and confirmation .

Decision: after deliberations and in light of the opinions exchanged:

"The board has been informed and has confirmed what has taken place regarding the termination of the Gas Supply and Purchase Agreement entered into with EMG on 13 June 2005."

In the following session of the board of directors held on 19/6/2012, the decision of EGPC's board of directors has been ratified in the presence of the respectful members of the board of directors.

[Emphasis as in original except for the word "confirmed" which has been added].

The Tribunal finds that there is overwhelming evidence that the decisions of EGPC and EGAS to conclude and terminate the GSPA were all taken with the blessing of the highest levels of the Egyptian Government. Such acts are attributable to the Respondent pursuant to Article 8 of the ILC Draft Articles on State Responsibility as EGPC and EGAS were "in fact acting on the instructions of, or under the direction or control of" the Respondent in relation to the particular conduct.¹⁶⁷ In any event, the Tribunal finds that the Respondent subsequently ratified the termination of the GSPA and thus "acknowledge[d] and adopt[ed] the conduct in question as its own" within the terms of Article 11.

The Tribunal notes that, after the Decision on Jurisdiction and Ampal's election, the Claimants modified their claim for damages. They now claim US$635 million detailed as follows¹⁶⁸:

Summary of aggregate losses now claimed in the ICSID arbitration, including interest and value leakage (US$million) and as adjusted to remove David Fischer's claim and reduce Ampal's claim in accordance with its election

The Tribunal recalls that, in its Decision on Jurisdiction, it dismissed the Respondent's objection ratione materiae over the Claimants' tax claims in the following terms.

266. Article XI of the US-Egypt BIT is crystal clear. It says what it says that "all matters relating to the taxation of nationals or companies of a Party, or their investment in the territories of the other Party or a submission thereof shall be excluded from this treaty, except with regard to measures covered by Article III …." (Tribunal's emphasis).

267. The Respondent says that this Article is a specific carve-out but recognizes that taxation measures tantamount to an unlawful expropriation are clawed back and are not excluded from the Treaty. The Tribunal agrees and therefore finds that it has jurisdiction over the Claimants' claim that the Respondent's taxation measure was tantamount to an expropriation of the Claimants' investment insofar as deprivation of property or rights might have occurred.

268. Whether or not the scope to the exception to the carve out for measures relating to expropriation encompasses other obligations in the Treaty in virtue of the so-called "Gateway Theory" invoked by the Claimants is not an issue which the Tribunal needs to determine today.

269. The Tribunal need not determine either today whether, when Egypt enacted Law 114 in 2008 revoking EMG's free-zone status, it did so in the exercise of its regulatory powers. This is a matter which may arise during the liability phase of this arbitration having regard, in particular, to Decree No. 1020 of 2000 which granted EMG a tax exemption until 2025.

270. Accordingly, the Tribunal dismisses this objection by the Respondent to the jurisdiction of the Tribunal.

The license granted for said Company [i.e., EMG] for exercising its activity under the private free zones system shall be extended as of the date of expiry of the present license on December 24, 2007 and shall expire upon the end of the Company's term specified in its commercial register on April 18, 2025. Said license shall be renewed for other additional terms upon the approval of the General Authority for Investment and Free Zones in light of the Company's compliance with the terms and conditions of operation under the private free zones system.¹⁷⁹

As a license bestowing vested rights directly upon EMG for a defined period of time, it constituted a vested right and an investment directly protected by the [Treaty].¹⁸²

[T]he revocation of EMG's license to operate as a Free-Zone company […] constituted the direct taking of a discrete investment protected under the Treaties. Egypt contends that "tax benefits" do not qualify as an investment under the Treaties, and proceeds to review investment treaty case law relating to the ability of States to introduce general measures of taxation. But the Claimants' "investment" is the license itself, not an ancillary tax benefit associated with private Free-Zone status. GAFI authorized EMG to purchase natural gas for export to the eastern Mediterranean as a private Free- Zone company for a defined term of 25 years. This license conferred by GAFI satisfies the broad definitions of "investment" in the Treaties which cover "every kind of asset" and set out non-exhaustive lists of different types of tangible and intangible assets.¹⁸³

Egypt argues that revocation of that license did not result in a significant deprivation or wholesale destruction of the Claimants' investment. The Claimants do not contend that the loss of the license in itself destroyed the entire Peace Pipeline Project. Since the license was an investment in its own right, the revocation constituted a direct and total taking of a discrete investment protected by the Treaties.¹⁸⁴

It is a widely recognised principle that taxation constitutes a special category of regulatory power and that the bar for finding that a tax measure is expropriatory is particularly high. Absent any abusive, excessive, discriminatory or arbitrary character of the measure, as in the present case, an expropriation claim fails.

Indeed, the Claimants have failed to show that Law 114/2008 is confiscatory in character or tainted by discrimination. Law No. 114/2008 is a general measure which applied to a number of different sectors of the Egyptian economy including fertilisers and petroleum sectors.

Moreover, EMG did not complain of this legislative amendment until it initiated these proceedings over four years after its enactment. […]¹⁸⁸

The term "investment" is defined at Article I (c) of the Treaty as follows:

"Investment" means every kind of asset owned or controlled and includes but is not limited to:

(i) tangible and intangible property, including rights, such as mortgages, liens and pledges;

(ii) a company or shares, stock, or other interests in a company or interests in the assets thereof;

(iii) a claim to money or a claim to performance having economic value, and associated with an investment;

(iv) valid intellectual and industrial rights property, including, but not limited to rights with respect to copyrights and related patents, trade marks and trade names, industrial designs, trade secrets and know-how, and goodwill.

(v) licenses and permits issued pursuant to law, including those issued for manufacture and sale of products.

(vi) any right conferred by law or contract, but not limited to rights within the confines of law to search for or utilize natural resources, and rights to manufacture, use and sell products;

(vii) returns which are reinvested.¹⁸⁹

[Tribunal's emphasis]

The Claimants contend that their investment consists of "EMG's vested right to tax-free status conferred by Decree No. 1917 of 24 December 2006 to operate under the Private Free Zones Regime, as extended until 2025 by Decree 81/M of 5 December 2007"¹⁹⁰.

Under Law 8/1997,¹⁹¹ entitled "Promulgating Law on Investment Guarantees and Incentives", the Egyptian government established private free zones. Article 29 of the Law provides that "A decree of the competent administrative quarter may be issued concerning the establishment of private free zones, each confined to a single project, if the nature thereof necessitates so doing."

This Law also sets out clearly the benefits enjoyed by companies operating in these private free zones. Article 32 of the Law provides that "[…] goods which are exported abroad by the Free Zone projects or imported to exercise their activity shall not be subject to the rules on imports and exports, nor to the customs procedures for exports and imports. Nor shall these goods be subject to Customs Taxes, the General Tax on Sales and other taxes and duties."¹⁹²

As noted earlier, by Decree No. 230 issued on 29 January 2000¹⁹³, the General Authority for Investment and Free Zones (GAFI) approved the incorporation of EMG to operate under the Private Free Zones regime. The approval by the Prime Minister of the incorporation of EMG under the Free Zones Regime is recorded in the preamble of the decree¹⁹⁴ and Article 8 provides that the term of the license shall be 25 years, "to be renewed upon the approval of the General Authority for Investment and Free Zones."

By Decree No. 1917 issued on 24 December 2006,¹⁹⁶ the GAFI authorized EMG to operate under the Private Free Zones Regime. Article 5 of the Decree provides that "[t]he term of this authorization is one year, to be renewed for other terms in case of meeting all conditions of the private free zones Article 12 of the Decree provides that "[t]his authorization is issued particularly to the Company [...]."(Tribunal's emphasis)

By Decree No. 81/M of 5 December 2007,¹⁹⁷ the GAFI amended Article 5 of Decree No. 1917 as follows:

The license granted for said Company [i.e., EMG] for exercising its activity under the private free zones system shall be extended as of the date of expiry of the present license on December 24, 2007 and shall expire upon the end of the Company's term specified in its commercial register on April 18, 2025. Said license shall be renewed for other additional terms upon the approval of the General Authority for Investment and Free Zones in light of the Company's compliance with the terms and conditions of operation under the private free zones system.¹⁹⁸

(Tribunal's emphasis)

By Law No. 114 of 2008,¹⁹⁹ the Egyptian government revoked certain licenses. Article 11 of the Law provides as follows:

The licenses related to investment projects which are established under the free zones system in the field of fertilizers, iron & steel and petroleum industries as well as the field of processing, liquefying and transporting the natural gas, and are existing on the date of enforcing the present law, shall be terminated .

[Tribunal's emphasis]

Article III(1) of the US Treaty provides:

No investment or any part of an investment of a national or company of either Party shall be expropriated or nationalized by the other Party or by – a subdivision thereof – or subjected to any other measure, direct or indirect, if the effect of such other measures, or a series of such measures, would be tantamount to expropriation or nationalization (all expropriations, all nationalizations and all such other measures hereinafter referred to as "expropriation") – unless the expropriation

(a) is done for a public purpose;

(b) is accomplished under due process of law;

(c) is not discriminatory;

(d) is accompanied by prompt and adequate compensation, freely realizable; and

(e) does not violate any specific contractual engagement.

Compensation shall be equivalent to the fair market value of the expropriated investment on the date of expropriation. The calculation of such compensation shall not reflect any reduction in such fair market value due to either prior public notice or announcement of the expropriatory action, or the occurrence of the events that constituted or resulted in the expropriatory action. Such compensation shall include payments for delay as may be considered appropriate under international law, and shall be freely transferable at the prevailing rate of exchange for current transactions on the date of the expropriatory action.

The Tribunal agrees with the Claimants. The decision in Gami Investment, Inc. v. The Government of the United Mexican States in which the tribunal found that "The taking of 50 acres of a farm is equally expropriatory whether that is the whole farm or just a fraction"²⁰¹ is an authority which supports its finding.

However, Article III(1) of the Treaty protects an investment from expropriation unless, inter alia, it is accompanied by "by prompt and adequate compensation". The Article goes on to prescribe that such compensation "shall be equivalent to the fair market value of the expropriated investment on the date of expropriation."

Having found that the revocation of the tax exemption is tantamount to an expropriation, the Tribunal need not determine whether the revocation of the tax exemption also constitutes a breach of the FET, the full protection and security standards of the Treaty or the umbrella clause by virtue of the so-called "Gateway Theory".

the assumption that EMG would have maintained its free-status indefinitely is sound. The Egyptian State represented to the Claimants that EMG would operate as a Free-Zone company, without any suggestion that this status would expire. Moreover, the renewal of EMG's Free-Zone License was contingent merely on EMG complying with the conditions for operating as a Free-Zone company. Egypt has offered no basis for the conclusion that EMG would not have complied with those conditions in the counterfactual scenario. In any case, it has a minimal impact on the Claimants' damages.²⁰⁴

The Tribunal recalls that by Decree No. 2511 of 2007, the Minister of Petroleum instructed "the Chairman of the Egyptian Natural Gas Holding Company and the Chief Executive Officer of the Egyptian General Petroleum Corporation [to] review all sale agreements and contracts concluded for supplying natural gas to local and international markets and undertake necessary actions for negotiating with parties to said agreements in order to profit from any increase in the financial proceeds of said agreements and contracts as a result of the higher oil prices in the international markets, with the objective of maximising the proceeds and resources of the Petroleum Sector therefrom."²⁰⁵ (Tribunal's emphasis)

By letter dated 3 April 2008, EGPC and EGAS, noted that "an unprecedented change was recently witnessed in the international markets for crude oil and natural gas, whereby […] natural gas price indicators ranged between US$8 and US$11/MMBtu", and invited EMG to meet in order to discuss "alternatives to restore balance between the parties of the Gas Sale and Purchase Agreement".²⁰⁶

By letter dated 16 June 2008, Mr. Zell wrote to Mr. Rachid, Minister of Trade & Industry as follows:

Dear Minister Rachid,

I enjoyed meeting you and Minister Fahmy last Monday and from our discussion believe we will be able to quickly and amicably resolve the issues we both currently face. As agreed, I am outlining the situation affecting the relationship between the Government of Egypt (GOE) and East Mediterranean Gas (EMG) and the menu of potential areas of flexibility which will allow for an equitable solution.

The EMG/EGAs supply contract was signed in 2005 when the $35/barrel maximum reference price of crude oil was deemed conservative. Obviously, substantial higher oil prices have increased the pressure on the GOE to raise the price it charges for natural gas. However, EMG has negotiated in good faith with its Israeli off-take clients over the past few years given its signed contract with EGAS for 7 BCM/year at $1.50/mmbtu and with no price opener for 15 years. […] Moreover, EMG's tax-free status was also a critical component to reaching these capital decisions and any change thereto will hurt EMG's current stakeholders significantly.

[…] [I]t is in the interest of both the GOE and EMG to determine a revised pricing scheme that allows the GOE to publicly announce higher pricing for its gas but does not undermine the economic viability of EMG or EMG's credibility with the Israeli market.

EMG categorizes its clients in three groups and they are probably the best means to focus our discussion […] –

1. The Israel Electric Company (IEC) contract for 2,125 BCM/year

2. Clients purchasing the next 2,375 BCM/year that represents the balance of the initial 4.5 BCM/year, the delivery schedule of which was according to the contract and confirmed by EGAS

3. The third quantity of 2.5 BCM/year under the 7.0 BCM per annum contract, anticipated for delivery beginning in 2012.

The initial quantity under the IEC contract is by far the most problematic for EMG to adjust its pricing. As you know, based on the contract signed with EGPC/EGAS on June 13, 2005, EMG signed the fixed-price 20-year IEC contract on August 5, 2005. […] [T]o the best of our understanding, IEC is unable to pay more for gas under this contract […]

EMG is slated to begin delivering gas to the second group of clients in 2010. […]

EMG has more flexibility on the final 2.5 BCM of gas, although we need to be respectful of the off-take market in which we have been negotiating. […]²⁰⁷

After studying your letter carefully, we are constrained to assume that we have not properly conveyed to you the current realities of the energy challenges we are all facing. It is hard to negotiate a pricing scheme of physically unavailable commodity. We have to admit shortfalls of other existing supply agreements, particularly those which are supplied from the national grid [which includes the Source GSPA] and not directly linked to dedicated export fields. […]

[…] The overriding element is physical availability of surplus gas, which in fact would hardly cover what you refer to as the first group of 2,125 BCM/p.a.²⁰⁸ (Tribunal's emphasis)

The principal changes which were introduced by the First Amendment are the following:

The Tribunal notes that, on the same date, EGPC, EGAS and EMG concluded the following agreement (the "Release Agreement"):

[…]

Each of the Parties hereby undertakes and agrees as follows:

1. Subject in all events to the provisions of Paragraph 2 of this letter, as of the First Amendment Effective Date, each Party hereby releases the other Party from any liability for breach or alleged breach pursuant to the GSPA which may have occurred during the period up to the First Amendment Effective Date.

2. Notwithstanding the foregoing provisions of Paragraph I above, each Party shall retain all rights under the GSPA against the other Party, and the releases set forth in Paragraph 1 shall be of no force or effect, in the event of any claim by the Initial On-Sale Customer with respect to any breach or alleged breach under the Initial On-Sale Agreement, the GSPA or the Tripartite Agreement which may have occurred prior to the First Amendment Effective Date.²¹⁰

[…]

Q: In light of the non-existence of a mechanism that allows for modification of the price in the old contract [i.e., the Source GSPA], how was the contract and pricing amended?

A: We had made up some technical problems and relied on them to not deliver the gas in the dates determined in the contract and threatened that we did not have the capacity to supply gas so that we could force them to enter into negotiations through which we managed to raise the price and modify the terms.²¹¹

In this connection, the Tribunal notes that the volumes of gas to be delivered were not modified under the First Amendment. As the Claimants themselves concede in their Reply, "[t]he significance of dividing the quantities into Q1, Q2, and Q3 related to schedule and price, not availability of the full 7 BCM annually."²¹² In other words, the Claimants were still contractually entitled to receive 7 BCM of gas annually after the First Amendment was executed.

Q: […] I'm saying that if you compare the initial GSPA and the GSPA with the first amendment, it's a fair statement that in contractual terms, with respect to Q1, EMG's margin was entirely preserved because the increase in price was entirely passed on [to] IEC; correct?

A. Correct.

Q. Right. So –

A. However, the fact that you didn't -- the Egyptian Government didn't deliver the gas effectively made the amendment, you know, the terms of it, irrelevant in terms of preserving our prior position.

Q. But, Mr. Zell, isn't it then a problem of implementation of the first amendment, as opposed to, "The first amendment is killing me, it's terrible, it's terrible for me"? It's a matter of implementation of the first amendment. Had the first amendment been implemented properly, according to what you say you expected, then you would have been happy, right?

A. If we had gotten what we had bargained for, we would be happy.²¹⁵

As to gas delivery schedules, the Claimants argue that "[the] delays in the delivery schedule for full volumes constituted a substantial concession by EMG, reducing the value of the Claimants' investment significantly […]"²¹⁶

Finally, the Minutes of the Meeting of the EMG Board of 2 November 2009 is contemporaneous evidence that the Directors of EMG were pleased with the conclusion of the First Amendment. There are two versions of the Minutes and the differences between the two versions are shown in track changes below:

Mr. Abdel Hamid Hamdy thanked the Board and stated that without the good relation between the shareholders and the full support of Mr. Hussein Salem [one of EMG's founders] who was always supporting us and paving the road in order with the shareholders which led that our negotiation with the Government is fruitful and that he was they were always brainstorming ideas to us which concluded all the amendment we achieved and as well Mr. Abdel Hamid Hamdy thanked Merhav Group for their support during such period and thanked Ms. Ellen Havdala for all her support as well.

Mr. Hamdy thanked the Board for their initiative regarding the above mention bonus which is on top to the generous bonus Mr. Hussein Salem gave to EMG team from his personal account which is very much appreciated (Mr. Hamdy pressed that the bonus they receive from Mr. Salem is way above the said bonus and he is announcing such to eliminate any misunderstanding in the future).²¹⁸

(Tribunal's emphasis)

1.19 As a result of the failure to ensure supply of the volumes committed before the Date of Injury (the "Past Delivery Failures"), the Claimants were deprived of the equity value that would have resulted from EMG's profits from the on-sale of gas to its Israeli customers under the terms of the various agreements that were in force before the Date of Injury. […]

1.20 The repudiation of Egypt's gas supply obligations and the failure to supply any gas beyond the Date of Injury (the "Future Delivery Failures") caused EMG to be deprived of cash flows in the foreseeable future and EMG's shareholders of the return on their prior investment. […]

1.21 Past and Future Delivery Failures deprived EMG of substantial profits, reducing the value of the Claimants' interest in EMG. […]²¹⁹

Each day, EMG provided the Seller with daily nominations reflecting the request from EMG's On-Sale Customers. Providing that the amounts requested were consistent with the terms of the GSPA, the Seller was obliged to deliver the gas the following day. The Seller however often failed to meet this obligation and delivered significantly less gas than was properly nominated.²²⁰

As regards the first sub-period, they write: "[t]he difference between the amount nominated and actually delivered until February 2011 was 1.12bcm, or 21% of the total amount nominated".²²²

We understand from Counsel that from February 2011 onwards, the Seller claimed a series of Force Majeure periods [due to attacks on the pipeline] (311 days out of a total of 464 between 1 February 2011 and 9 May 2012) during which EMG generally stopped nominating gas to the Seller, or nominated reduced amounts of gas. In comparison to the 3.97 bcm that was or we assess would have been nominated but for the Delivery Failures from February 2011 to the Date of Injury, only 0.53 bcm, or 13.3% of the total amount nominated or that would have been nominated absent the Seller's Force Majeure claims, was delivered.

(1) EMG was only entitled to receive gas that it had actually nominated under the terms of section 6 of the GSPA and not the maximum amount of gas provided for in the First Contract Year;²²⁵

(2) The Claimants' claim exceeds the amount of Q1 gas that may be nominated in any given period under section 5.4 of the GSPA;²²⁶

(3) The Claimants include nominations for unauthorised customers for which EMG did not follow the mandatory procedures of the GSPA;²²⁷ and,

(4) To the extent that there was any shortfall, the contractual procedure provided under the GSPA was to deduct any compensation from the payments due to EGPC and EGAS.²²⁸

The Tribunal notes that its jurisdiction derives from the Treaty. It must therefore apply the Treaty standards in its analysis rather than any standard under the contractual regime of the GSPA such as force majeure or failure to act as a Reasonable and Prudent Pipeline Operator ("RRPO").

Article II(4) of the US-Egypt BIT provides that "[t]he treatment, protection and security of investments shall never be less than that required by international law and national legislation." The Tribunal considers that one important element of the international law standard is the requirement to provide full protection and security.

In this respect, the Tribunal notes that a Chamber of the International Court of Justice in Elettronica Sicula SpA (ELSI) (United States of America v Italy) held that it "cannot be construed as the giving of a warranty that property shall never in any circumstances be occupied or disturbed."²⁴¹ Although the investor's factory had been occupied by the workers for some time, the Chamber observed that "[t]he dismissal of 800 workers could not reasonably be expected to pass without some protest".²⁴² It concluded that the conduct of the Italian authorities, in protecting the plant and even continuing some production, did not fall below the standard.

A failure of protection and security is to the contrary likely to arise in an unpredictable instance of civil disorder which could have been readily controlled by a powerful state but which overwhelms the limited capacities of one which is poor and fragile. There is no issue of incentives or disincentives with regard to unforeseen breakdowns of public order; it seems difficult to maintain that a government incurs international responsibility for failure to plan for unprecedented trouble of unprecedented magnitude in unprecedented places. The case for an element of proportionality in applying the international standard is stronger than with respect to claims of denial of justice.²⁴⁵

(i) the effect of a determination in the contractual dispute upon the treaty claims in the present proceedings;

(ii) the effect of a determination in a case to which the investment company (EMG) is party upon the rights of its shareholders as investors.

Where the parties have chosen the forum to decide their contractual dispute, the findings of that court or tribunal will be entitled to res judicata effect within the legal order in which they were rendered.²⁵⁶ Accordingly, where a contractual claim between an investor and the host State has been the subject of an authoritative determination by an arbitral tribunal appointed under the contract, "[t]he authority as res judicata of a decision given by another competent jurisdiction between the same parties, concerning the same claims and based on the same factual and legal bases, prohibits a party from reintroducing a new action that is similar on all points."²⁵⁷

The ICC tribunal recorded at para. 596 of its award that "although the Tribunal has found it lacks jurisdiction under the GSPA, it is uncontested that the Parties have empowered the Tribunal to interpret and apply the GSPA in adjudicating the force majeure issue".

These findings of fact of the ICC tribunal include the following.

The Pipeline

597. Line 36 of the Arab Gas Pipeline is almost 192 km long and runs between Damietta and the east of Al-Arish, where it connects with EMG's own section of the pipeline. Line 36 has been defined as the "Pipeline".

598. The Pipeline is a straight pipe, interrupted by valve stations, railway valves, traps and offtake rooms [jointly, the "Facilities"]. The Pipeline has around 15 of such Facilities, all relatively small in size (typically, 25 m x 25 m). These Facilities serve specific purposes and usually host valuable equipment. Off-take rooms, for example, are used to connect the main pipeline with a ramification of smaller diameter leading to a certain customer and house among other material, metering equipment used to measure supplies to a particular customer.

599. Another characteristic feature of the Pipeline is that for half of its length it is looped. The section of the Pipeline between Off-take room nos. 2 and 3 is doubled: there is thus a mainline with several valve rooms, and a simple looping line of approximately 100 km length.

600. EMG's facility is located at the end of the Pipeline in the town of El Sheikh al Zuwaid – in close vicinity of the Gaza border. From there, the pipeline is operated by EMG and leads underwater to Israel.

North Sinai

601. The Pipeline crosses North Sinai. All experts agree that this has been and continues to be a historically conflictive zone. It is populated mostly by Bedouin, who were marginalised during the Mubarak era, and regarded themselves as an alien body within the Egyptian Republic. Restricted from entry into the formal economy, Bedouins developed a market for unlicenced tourism, cannabis and opium cultivation, arms-running and smuggling into Israel and Gaza. Bedouin are organised in tribes, with their own terrain; and revenues from the informal economy helped revive old coping mechanisms and patronage networks.

602. After the Camp David Accords, Egyptian military presence in Sinai was curtailed. Sinai was divided in four zones, named A through D, with Egyptian military presence decreasing from west to east. EGAS' Pipeline runs through Zone B, where military force was limited to four infantry battalions (approx. 2,000 troops), armed with AK 47 rifles. As a counterweight to the low military presence, there was a strong local police (under the Ministry of Interior), which – at least during the Mubarak era – was effective in keeping the area secure.

Revolution and attacks

603. With the eruption of the popular uprising that toppled President Mubarak in January 2011, Sinai's Bedouin seized the opportunity to shrug off Egypt's internal security yoke and push for communal empowerment. Militants grew strong and lawless, and their violence against the police led Egypt's State police to abandon the area. A security vacuum resulted.

604. In this context of revolution, in the period between February 2011 and April 2012 the Pipeline suffered a total of 13 attacks, which significantly affected gas supply.²⁶⁸

The ICC Tribunal then carried on with its factual findings.

5.1 THE CONSTRUCTION OF THE PIPELINE

759. The Pipeline crossing the Sinai peninsula was built in 2001, the GSPA was signed in 2005, while it was not until 2008 that the EMG Pipeline entered into operational mode for the supply of gas to Israel.

760. At the beginning of the XXI century, when the construction of the Pipeline was undertaken, EGAS and GASCO (the Pipeline operator) must have been aware that a pipe crossing a historically conflictive zone, which was (at least partially) intended for the supply of gas to Israel, was open to attack. The awareness of some risk is evidenced by the fact that EGAS decided to adopt at least certain protective measures:

- Some segments of the Pipeline were protected by cement : experts have explained that in risky areas it is advisable that the pipeline be covered with cements slabs as an additional protection to delay attacks; of the 192 km long Pipeline, a 30 km long section was covered with cement; no explanation has been provided as to why only this small proportion of the pipeline benefitted from this extra protection, or on the criteria used to select the portion of the pipe which was protected; it can already be anticipated that all attacks on the pipe were performed on unprotected segments;

- GASCO sought offers for the procurement of security systems : experts agree that the installation of special fibre optic monitoring cable buried above the pipeline is a basic detection measures, and visual surveillance is also essential to detect intrusions; there is some evidence that GASCO asked international companies to submit offers for the supply of fibre cable and visual surveillance; there is however no proof that this equipment was ever procured or employed.

- All facilities were surrounded by a defensive brick wall topped by barbed wire.

5.2 OPERATION OF THE PIPELINE UP TO THE REVOLUTION

761. The Pipeline operated for a period of three years (2008 – 2011), before the Arab Spring Revolution toppled the government of President Mubarak. EGAS has not provided much information on how it organised security during that period.

762. In his expert report Mr. Pelham recalls that though police presence was limited in size and arms, due to the Camp David Accords, the State Security apparatus was effective in tamping down dissent, and he did not shy away from conceding that such effectiveness was procured by the use of all kind of means, including non- conventional ones.

763. There is no evidence that during this period any special security measures were adopted, and the Tribunal must assume that police protection plus limited structural defences around facilities were the only measures in existence. In any event, it is a fact that the Pipeline did not suffer any harm during three years: save for a threat which was reported in June 2010, no incidents occurred.

EMG 's security

764. EMG, on the other hand, who had to operate its own facility in North Sinai, approached security concerns the opposite way: instead of relying on the local police, it contracted the Ministry of Interior to militarise and fortify its premises, providing guards in nine sentry towers, with a total of 50 armed guards securing the facility, taking shifts at all gates and patrolling the compound with an armoured vehicle. Guards were supervised by an officer and a retired general from the Army was engaged as a consultant. The facility also provided housing for guards and weapon storage.

765. Mr. Pelham (EGAS' expert on security in Sinai) has confirmed that EMG's facility was well guarded, when he testified that it lay behind the road leading from Al Arish to Sheikh Zuwayed and that, whenever he passed by the road, his guides would caution him not to stop, because EMG's guards were prone to open fire.

5.3 ATTACKS AFTER THE REVOLUTION

766. On 25 January 2011 a popular uprising precipitated the fall of the Mubarak regime. Chaos and violence ensued in Egypt. Particularly in North Sinai, violent Bedouins seized the opportunity to shrug off Egypt's internal security yoke and push for communal empowerment. Across the peninsula, police took flight, while police stations and prisons were attacked. And the Army, too preoccupied with events in Cairo and the Nile Valley, shied away from curbing the mayhem in the Sinai.

767. The Pipeline's security, which had mainly relied on police forces, literally disappeared overnight. Insurgents soon took advantage of the vacuum and attacked the Pipeline. Between February 2011 and April 2012 (the date of termination of the GSPA), the Pipeline suffered 13 attacks. In contrast, EMG, who operated in the same area at the same time, suffered one attempted attack, which was quickly repelled.

768. All of the attacks (but one) took place around the area of Al Arish. The first six targeted facilities on the Pipeline (such as valve and off-take rooms), while the other seven blew up segments of pipe. It is no surprise that saboteurs, at first, preferred the Facilities to the pipe: Facilities are the most vulnerable elements of a Pipeline, as they are:

- limited in size (not bigger than 25 m x 25 m) and number (there were around 15 of them);

- located above ground (in comparison to the pipe, which is mostly buried) and therefore easy to locate; and

- house valuable equipment, so that damage to a facility causes potentially more severe economic consequences than damage to the pipe.

On the other hand, it is equally true that for the same reasons, the 15 Facilities are easier to protect than the pipe, which runs for 192 km.

A. ATTACKS ON FACILITIES

769. There were a total of six attacks on facilities: on off-take room no. 4, trap 2 (twice), off-take room no. 3, railway valve no. 2 and valve station no. 7. Attacks started on 5 February 2011 and there were two more on 27 March and April 2011. A two month truce ensued. But attacks resumed, hitting twice on 4 and 12 July 2011 and once again on 27 September 2011.

a. ATTACK NO. 1 (AND 2) (FEBRUARY – MARCH 2011)

770. After the fall of President Mubarak on 25 January 2011 the police fled from North Sinai and the Pipeline's protection was left to itself. Some 10 days thereafter, the first attack occurred.

771. All proven facts regarding the first attack have been drawn from the Technical Report dated 10 April 2011, which EGAS prepared and sent to EMG, and from contemporaneous press articles. The facts are the following:

On 5 February 2011 at 8.30 am four masked men arrived in two unmarked vehicles at off-take room no. 4, which is located some 20 km east from El-Arish. The perimeter brick walls with wire fences on top and the four guards who were posted "in the area" were not sufficient deterrent. There is no proof of how saboteurs forced the guards to leave their post: none of the produced documents mentions whether the attackers or the guards were armed nor, if they were, what kind of arms they had. In any event, it is undisputed that no shooting took place and, though saboteurs and guards were equal in number, there is no evidence that the guards challenged the attackers. The attackers locked the four men who guarded the facility in a car and placed two explosives that were successfully detonated, causing a large fire and significant damage to the pipe and the gas filtering and metering equipment.

772. There is no evidence that a security protocol was set in motion to apprehend the attackers. The Technical Report only describes the actions taken to control the damages caused on the Pipeline. And there is also no evidence that EGAS adopted any security measures after the first attack or that it performed a risk assessment.

773. The second attack took place on 27 March 2011 at Trap 2, which is 10 km west from El-Arish. The attack is of minor significance because no damage was caused and gas flow was only stopped for half a day. The assault is only worth mentioning because it has been described by EGAS as a successfully repelled attack. Yet the evidence (a contemporaneous news article) shows that it was pure luck that no damage occurred: apparently six armed persons attacked the (only) guard present at the facility and set a bomb, but the explosive failed to explode. Again, there is no evidence that a response protocol was activated, nor of any measures being adopted to increase security.

b. SUBSEQUENT ATTACKS AND REACTIONS

Attack no. 3 (April 2011)

774. Exactly a month later, the third attack took place at off-take room no. 3, which forks from the Pipeline to supply customers in El-Arish. For reasons which have not been disclosed, this point of the Pipeline was especially prone to attacks: after this initial attack, the pipe close to the off-take room would again be blown up in five successive blasts (November 2011 – April 2012).

775. The Technical Report prepared after this third attack only mentions that on 27 April 2011 at 3.30 am the off-take room was blown up with explosives. There is no indication of any guards being present and the fact that the attackers were not described reinforces the presumption that there were no security forces guarding the facility.

Reaction from the State (May – June 2011)

776. After three unchallenged attacks there is evidence showing that the Egyptian State decided to get involved in the security issues affecting the Pipeline. The Ministry of Defence and the Supreme Military Council warned EGAS that they would not allow resumption of the gas transmission unless additional security on the Pipeline was provided and, in particular, the following measures were undertaken:

- raising height of fences;

- installing barbed wires on top of fences;

- increasing lighting;

- levelling sand dunes around each site; and

- installing monitoring system with TV cameras.

777. Upon this warning, GASCO's Chairman and its Managing Director held a meeting on 1 June 2011 in which they took the following decisions:

- to assign the security of valve rooms to the Engineering Service of the Armed Forces with an estimated cost of 3,023,000 Egyptian pounds;

- to build 20 housing units to accommodate the security agents;

- to install 5,562 km of barbed wire around the gas rooms;

- to heighten walls with 4,782 km of concertina wire.

778. The minutes of the meeting reflect that the above decisions were subject to approval by the Board of Directors. The first of the decisions, however, seems to have been executed right away, because EGAS has produced a copy of a check in an amount of 3,023,000 Egyptian pounds, the beneficiary being the Engineering Service of the Armed Forces.

779. A second meeting, this time of GASCO's Board of Directors was held on 15 June 2011. The Board of Directors approved two of the decisions proposed by the Chairman and Managing Director:

- The purchase of iron angles to heighten the walls with wire, in an amount of 160,750 Egyptian pounds;

- The construction of 20 housing units for the security agents in an amount of 400,000 Egyptian pounds.

- GASCO's Contingency Plan (probably after June 2011).

780. IEC has produced GASCO's Contingency Plan, which it obtained through the document production procedure. The document is dated April 2011, but according to IEC there are doubts whether all of its content was prepared at such date.

781. The Contingency Plan lists the so called "solutions applied to the reactive phase to avoid the recurrence of line explosion accidents". Although the term ("applied") is used, a careful analysis of the Contingency Plan reveals that: (i) not all of the measures proposed were actually implemented, and (ii) those measures that were implemented, could not have been in place by April 2011:

782. (i) The list clearly differentiates between measures which were in place and those which were still being discussed:

- Solutions in place:

- Cooperation with armed forces and Ministry of Interior to secure the site of priority valve rooms and supervision of the Al-Arish line using four-wheel drive cars provided by GASCO and cell phones to ensure communication in case of discovery.

- Establishing guard persons in the valve rooms and stations and along the line track, with accommodation rooms.

- Metal cladding of the doors of valve rooms, changing the barbed wire and raising its height in valve rooms, and improve lighting.

- Solutions under discussion: assignment of the protection of valve rooms to a specialised security company able to provide trained and armed staff; a study is to be prepared and, if accepted, a tender should be organised.

783. (ii) The Contingency Plan is dated April 2011 in its front page. The list with the security solutions is an annex to the document. Was this attachment prepared on the same date as the Contingency Plan, or was it added at a later stage? Contemporaneous evidence seems to indicate that the list may have been added afterwards: the minutes of GASCO's Board of Directors meeting mentioned supra in paras. 777 and 779, where cooperation with the Army, the building of housing and the raising and installation of barbed wire was considered for the first time, took place two months later, in June 2011. And payment for the construction of accommodation was not made until December 2011 (see para. 796 infra).

Attack no. 4 (July 2011)

784. This is the only attack that did not occur within a 25 km radius around Al-Arish radius, but 80 km west from Al-Arish. The attack took place on 4 July 2011 and targeted Railway Valve Room 2. According to a press article, it was again pure luck that not all the explosives exploded and therefore damage was constrained to a one day shutdown.

785. The Technical Report prepared by EGAS does not describe any additional protective measures in place (this was the first attack after the warning made by the State requiring additional protection), and the photographs contained in the report show a protective perimeter wall with a wire fence on top, which does not seem to be significantly higher than the walls around previously attacked facilities. IEC has produced a very interesting newspaper article, contemporaneous to the attack:

The article is dated 21 July 2011 and refers in total to three attacks which seem to coincide with Attacks nos. 3, 4 and 5. The reporter had the opportunity to interview guards involved in the attacks, other security guards, neighbours, and even a security official of GASCO. The scene described in the report is very similar in all attacks: the facility is guarded by unarmed persons who, once confronted with armed attackers, leave the site immediately. Guards complain that their duty is to monitor the stations rather than to protect them because "security without weapons means that there is no security", and that a two meters high wall covered with barbed wire is no obstacle to attackers. Criticism extends to the housing, which consists of primitive tents, and to the absence of any lighting which makes identification of suspects in the area impossible. GASCO was also blamed for lack of response: in case of Attack no. 4 guards reported unusual suspicious activity in the area before the attacks, but triggered no reaction in GASCO. In the case of Attack no. 5, the guard "rushed to call the security officers […] but none of them was able to do anything about the situation […] then there was an explosion".

Attack no. 5 (July 2011)

786. This attack has given rise to much debate. On 12 July 2011 Valve Station 7 was assaulted. This is the one shutdown of gas which affected EMG only, because Valve Station 7 is located 2 km east from the offtake heading south to Jordan. There is an allegation made by EMG that this damage, although less complex, took the longest to repair (84 days), the reason being that Israel was the only customer affected, and so EGAS had no incentive to speed up repairs.

787. The attack is reported in a Technical Report prepared on 28 December 2011. For once this report provides some details on how the attack was perpetrated and how security was built up. The account of events is the following:

Apparently Valve Station 7 was secured by one guard only, living there with persons whom the experts identify as family (the report simply refers to "those associated with him"). The facility was protected by the usual brick wall with wire fence on top, but there seemed to be also a lower concertina wire fence running in parallel.

Around 1 am four armed masked individuals entered the facility, threatened the guard and demanded that he leave the facility. The guard complied with the order, and promptly (at 1.20 am) contacted the security officer in the administrative offices of GASCO, who in turn informed the security officer at the East Gas station. This security officer called the military force unit in the area (pro memoria: in June GASCO had transferred a significant amount of money to the Army for security services). The security officer reported that only some soldiers were available, but not the Army officer in command, and the soldiers then replied that they could do nothing.

40 minutes after the initial call from the guard, the explosives placed at Valve Station 7 exploded. There was no attempt to identify or chase the intruders.

788. This new attack caused the State to intervene again on security issues. The Technical Service of the National Defence Council requested GASCO to draft a memorandum on surveillance of the Pipeline. GASCO sent on 26 July 2011 a technical study to secure the Pipeline by monitor surveillance cameras and digital recording systems for a distance of 190 km with a cost of 16,875,000 Egyptian pounds. There is no evidence that surveillance cameras ever were purchased or employed: no purchase order, contract, proof of payment, footage or pictures has been produced by EGAS.

Attack no. 6 (September 2011)

789. On 27 September 2011 Trap 2 exploded. This attack is noteworthy because it was the last attack perpetrated against facilities and it was also the second assault on the same target (Trap 2 had already suffered an attack on 27 March 2011 but at that time luckily explosives failed to detonate).

790. In contrast with the first assault, this second time there was not even one watchman. In fact, the attack was noticed – according to the Technical Report on prepared by EGAS on 28 December 2011– by the watchman of another facility (Valve Room 5), who saw distant fire on the track of the pipeline towards Al-Arish.

B. Attacks on pipe

a. Operation Eagle (August 2011)

791. The Egyptian armed forces, well-resourced and the largest in the Middle East, remained powerful after the January uprising. At that time the Egyptian military had 11 battalions in the Sinai Peninsula and on 30 July 2011 it launched operation Eagle aimed at reverting the deterioration of the general security situation in Sinai.

792. By the end of August 2011 3,750 soldiers were placed to supply area defence and road blocks were set up. There is no evidence whether the duties assumed by the Army included the protection of the Pipeline. Brig. Ling submits that it was not until March 2012 that troops started assisting with direct pipeline protection and EGAS has not challenged this assertion. Be it as it may, there is no doubt that the presence of the Military in the area had an effect on attackers: saboteurs shifted their modus operandi to attacking the pipeline, instead of the facilities.

793. As said before, from a security point of view, facilities and pipes are the two basic elements to protect and they are completely different from another: facilities are more vulnerable because they are visible, limited in number and size and contain valuable equipment; the segments of pipe are difficult to locate because they are (mostly) buried, but on the other hand, it is extremely burdensome to guard a 192 km long Pipeline with security forces.

b. SUBSEQUENT ATTACKS AND REACTIONS Attacks nos. 7, 8 and 9 (November 2011)

794. Attacks nos. 7 and 8 targeted the pipeline at the same segment: 121 KP. The first was on 10 November 2011; and as soon as damage was repaired it was attacked a second time on 25 November 2011. Attack no. 9 hit two sections of the pipe (136 and 148 KP).

795. The modus operandi was the same: saboteurs dug up sections of the pipeline and detonated explosives. This is only a presumption because EGAS provided no technical reports. There is also no evidence that any security measure detected the attacks and/or responded to them.

796. After the especially violent month of November, GASCO's Board of Directors met on 14 December 2011. The minutes of the meeting reflect that the Board decided to:

- pay 10 Million Egyptian pounds to the Engineering Service of the Armed Forces to build housing camps for the security agents;

- pay 655,820 Egyptian pounds to the Engineering Service of the Armed Forces to protect police vehicles;

- complete land communication means with telephone lines for a cost of 1 Million Egyptian pounds.

797. There is evidence of the disbursement of the 10 Million Egyptian pounds; no proof has been marshalled as regards implementation of the other measures.

Attacks nos. 10 – 13 (December 2011 – April 2012)

798. Despite the payments made to the Army, and of a further payment of 2 Million Egyptian pounds made in early March 2012, attacks did not stop, but went on – while the GSPA was in force – until 9 April 2012. All sabotages concentrated around two segments:

- 151/153 KP: Attacks nos. 10, 11 and 12 (18 December 2011, 5 February and 5 March 2012). This section of the pipe was attacked three times in a row, as soon as repairs were completed.

- 140 KP: Attack no. 13 on 28 November 2011 (this segment had already been attacked in no. 9).

799. The modus operandi was the same and no technical reports were provided which could serve as evidence of the security measures in place. It must be assumed that security measures had not improved.

5.4 ATTACKS ON OTHER TARGETS

800. In the hazardous environment of the Sinai, during this period violent groups targeted various assets. The parties have discussed at length two particular scenarios: the facilities of EMG and of the MFO. […]

801. Interestingly, both parties have used the example of the MFO in support of their arguments: EGAS to report a case which, despite heightened security, could not prevent attacks; IEC to show how the MFO enhanced security after the Revolution and the first attacks.

802. The MFO stands for the Multinational Force and Observers, an independent international organisation with peacekeeping responsibilities in Sinai, whose main base is located in El Gorah, in Zone C (pro memoria: the Pipeline mainly runs across Zone B, with higher military presence).

803. As evidence of MFO's efforts in security, IEC has produced the 2011 Annual Report, which summarises the attacks suffered by the MFO:

- Local grievances in the form of peaceful protests outside MFO facilities, intermittent attempts to restrict the movement of MFO vehicles.

- On 27 May 2011 an improvised explosive device was exploded as a armoured vehicle passed.

[Note: the parties also placed importance on the attack on the MFO's main base in September 2012. Since this occurred after the termination of the GSPA and long after the events for which EGAS has claimed force majeure, the parties' discussion is not relevant and will be omitted from this summary.]

Response by the MFO

804. As early as the first uprisings, the MFO set in motion a series of internal steps to review possible enhancements to its security and to increase vigilance at all their sites. Concurrent with increased security concerns the MFO conducted a weekly evaluation of security and travel conditions which resulted in an advisory approved by the Force Commander on security concerns. In March 2011, at the request of the Director General, the U.S. Army Central Command Joint Security Office conducted a force protection assessment of both MFO camps, of all remote sites and of the dock area.

805. The MFO undertook the following security improvements:

- remote site renovations completed by October 2011, including the installation of ballistic towers, replacement perimeter fencing, protective blast walls, bunkers and improved lighting;

- acquisition of five fully armoured vehicles, in addition to the exiting three light armoured vehicles;

- command and control procedures: including, among other things, a new operations centre, centralising all operational elements and facilitating command and control of MFO assets.

5.5 IDENTITY OF THE ATTACKERS

806. Gen. Eiland (one of IEC's experts) notes that up to three terrorist organisations have claimed responsibility for the attacks on the Pipeline: Ansar al-Hijad in the Sinai, Ansar Baytal-Maqdi and Al-Jabhahal-Salafiya fi Sinaa.

807. Based on his expertise, Gen. Eiland is of the opinion that Ansar Baytal-Maqdis are the most credible authors of the attacks. Mr. Pelham (EGAS' expert) found this conclusion questionable and thought that it was more likely that Jihadi groups and Al Quade were guilty. In any event – he insisted – all these militant groups are well-trained and battle-hardened. They maintain their own training camps, insurgency and they acquired an array of weaponry from North Africa's fallen regimes; and as far as Jama'at Ansar Bayt al-Maqdis is concerned, this group has claimed responsibility for lethal raids and rocket attacks on Israel among other attacks. Mr. Pelham insisted that, whoever was responsible, it would not be a primitive group.

808. As regards the degree of violence used in the attacks against the Pipeline, Mr. Pelham recognised that attacks "only" involved the direct use of explosive devices and, as compared to other targets of Jihadi militants (such as the MFO), no violent crowd was present, nor were Molotov cocktails used.

809. Mr. Schrader also underlined that there is no evidence that attackers were heavily armed and there would not even be a need for the use of strong weapons, as none of the attackers was ever challenged.²⁷⁰

The Tribunal notes that nearly all of the expert reports relied on by the parties in the ICC proceedings are in the record of the present arbitration as shown in the table below.

In this context, the Tribunal is of the view that the first attack on 5 February 2011 could not have been prevented by the Respondent and cannot amount to a breach of the full protection and security standard in itself. As Sole Arbitrator Paulsson said in Pantechniki : "[…] it seems difficult to maintain that a government incurs international responsibility for failure to plan for unprecedented trouble of unprecented magnitude in unprecedented places."²⁷⁴

The Tribunal recalls that, in its Decision on Jurisdiction, it concluded as follows in respect of the Respondent's objection ratione materiae in relation to the Claimants' Gas Supply Dispute:

249. Essentially, as was seen above, the Respondent submits that the Tribunal lacks jurisdiction because the Gas Supply Dispute falls exclusively within the jurisdiction of the CRCICA Tribunal which has upheld its jurisdiction.

250. The CRCICA Tribunal, avers the Respondent, is considering the same issues "which the Claimants seek to disguise as violations of the Treaties in these proceedings."

251. Since the Gas Supply Dispute "is purely contractual in nature", the Respondent concludes that it falls outside the scope of the arbitration clause in Article VII of the US-Egypt Treaty.

252. In response, as noted above, the Claimants assert that all of their claims in the present arbitration are based on their contention that Egypt has breached the US-Egypt Treaty and international law.

253. Quoting from the Decision on Annulment of the Vivendi Committee, the Claimants say "[i]t is one thing to exercise contractual jurisdiction … and another to take into account the terms of a contract in determining whether there has been a breach of a distinct standard of international law."

254. The Tribunal agrees with the Claimants.

255. The Tribunal notes that the Claimants claim breaches of various standards under the Treaty in relation to the Gas Supply Dispute, including fair and equitable treatment, unlawful expropriation and breach of the umbrella clause. As to the first two standards, the Tribunal accepts that, in order for it to find that there has been a breach of those standards in relation to the Gas Supply Dispute, it will need to determine as an incidental question whether the Source GSPA was validly terminated. However, this does not change the fact that the key issue under the Treaty in respect of a claim for unlawful expropriation or breach of the fair and equitable treatment is whether there has been a loss of property right constituted by the contract or whether legitimate expectations arose under the contract.

256. As to the umbrella clause, the Tribunal notes that there is no umbrella clause in the US Treaty and that it is invoked by the Claimants as having been introduced on the basis of the MFN clause in the Treaty. For purposes of its present decision on jurisdiction, the Tribunal need not determine today whether it has jurisdiction over such a clause. In due course, the question may become otiose.

257. Accordingly, the Respondent's objection to the jurisdiction of the Tribunal over the Claimants' Gas Supply claims based on the alleged breach of the standards of fair and equitable treatment and unlawful expropriation is dismissed. The Tribunal remains seized of the Respondent's objection to the jurisdiction of the Tribunal over the Claimants' Gas Supply claims based on the alleged breach of the umbrella clause . (Tribunal's emphasis)

In the event that Buyer fails to timely pay any amounts due under this Agreement for four (4) consecutive Months, Seller shall be entitled to terminate this Agreement upon delivery of written notice to Buyer, provided that such failure shall not create the right to terminate this Agreement unless Buyer fails to cure such failure within thirty (30) Business Days after receiving notice from Seller of the fourth (4th) consecutive occurrence of such non-payment.

Section 6.8 of Annex 1 to the GSPA provides:

6.8 Daily Delivery Failure.

6.8.1 To the extent that Seller fails to deliver during any Day during the Supply Period the aggregate of the Properly Nominated Quantities for such Day (other than in circumstances which Seller is excused pursuant to this Agreement) ("Daily Delivery Failure"), the quantity of Gas attributable to the Daily Delivery Failure that is greater than an amount equal to two percent (2%) of the aggregate Properly Nominated Quantity for that Day shall be classified as "Daily Shortfall Gas."

6.8.2 If and to the extent that a Daily Delivery Failure is agreed by the Parties in writing or decided pursuant to Article 16 of Annex 1 to have been due to an event of Force Majeure affecting Seller, the corresponding quantity of Gas that was classified as Daily Shortfall Gas shall no longer be so classified. In those circumstances, Seller shall make the necessary adjustment in the next Annual Statement following that agreement or decision so as to adjust any amounts previously credited to Buyer under this Section 6.8 of Annex 1, together with interest on the adjustment amount at a rate equal to the Agreed Interest Rate plus three (3) percentage point (compounded annually) from the Annual Statement Due Date in respect of the Annual Statement for the Contract Year in which the Daily Delivery Failure occurred.

6.8.3 In respect of any Daily Shortfall Gas in a Delivery Month, the Monthly Payment (as described in Section 9.3.2 of this Annex 1) for such Contract Year shall be reduced by an amount (the "Daily Shortfall Compensation") equal to the sum of:

(a) with respect to each On-Sale Agreement in force during such Delivery Month, ten percent (10%) of the product of (i) the amount of the Daily Shortfall Gas attributable to such On-Sale Agreement for each Day during which there was a Daily Delivery Failure during such Delivery Month, multiplied by (ii) the then applicable Contract Price with respect to such On-Sale Agreement (for purposes of Section 6.8.3(a)(i) of this Annex 1, Daily Shortfall Gas shall be allocated on a pro rata basis among all On-Sale Agreements with respect to which there have been nominations for delivery of Gas on the Day that such Daily Delivery Failure occurred based on the respective nominations for such On-Sale Agreements for such Day); and

(b) any costs, expenses or penalties incurred by an On-Sale Customer under a Transportation Agreement payable by Buyer (or Buyer's Affiliate) where Buyer can demonstrate that such cost, expense, or penalty resulted from Seller's Daily Delivery Failure; and

6.8.4 For the sole purpose of calculating any Daily Shortfall Gas in respect of a Day during periods of permitted Seller's Scheduled Maintenance or Seller's Unscheduled Maintenance, the aggregate of the Properly Nominated Quantities for such Day shall be deemed to be the lesser of the aggregate of Buyer's actual Properly Nominated Quantities for such Day and the aggregate of the maximum hourly quantities of Gas that Seller anticipated Seller could deliver during each Hour of such Day pursuant to Seller's notice to Buyer in accordance with Section 5.2 of this Annex 1.

Section 6.9 of Annex 1 to the GSPA provides:

6.9 Monthly Delivery Failure.

6.9.1 To the extent that Seller fails to deliver during any Month during the Supply Period the Properly Nominated Quantities on a Day-by-Day basis for such Month (other than in circumstances which Seller is excused pursuant to this Agreement) ("Monthly Delivery Failure") the aggregate quantity of Gas that Seller fails to deliver on a Day-by-Day basis during such Delivery Month shall be classified as "Monthly Shortfall Gas." Notwithstanding the foregoing, to the extent Seller fails to deliver a Properly Nominated Quantity on a given Day, if Seller, on or before 18:00 on the Day immediately following the Day of such failure, notifies Buyer that Seller shall make such undelivered Gas available to Buyer within three Days after the Day that Seller failed to deliver, and Seller actually delivers such Gas to Buyer on the date so notified (and within such three Day period), the amount of such Gas so delivered shall reduce the aggregate amount of Monthly Shortfall Gas.

6.9.2 If and to the extent that a Monthly Delivery Failure is agreed by the Parties in writing or decided pursuant to Article 16 of Annex 1 to have been due to an event of Force Majeure affecting Seller, the corresponding quantity of Gas that was classified as Monthly Shortfall Gas shall no longer be so classified. In those circumstances, Seller shall make the necessary adjustment in the next Annual Statement following that agreement or decision so as to adjust any amounts previously paid (or credited) to Buyer under this Section 6.9 of Annex 1, together with interest on the adjustment amount at a rate equal to the Agreed Interest Rate plus three (3) percentage point (compounded annually) from the Annual Statement Due Date in respect of the Annual Statement for the Contract Year in which the Monthly Delivery Failure occurred.

6.9.3 To the extent that the Monthly Delivery Failure in any Delivery Month attributable to the Initial On-Sale Agreement is greater than seven percent (7%) of the aggregate Properly Nominated Quantities for such Delivery Month for the Initial On-Sale Agreement, in addition to any Daily Shortfall Compensation payable pursuant to Section 6.8.3 of Annex 1 with respect to such quantities of Q1 and in addition to the re-delivery obligations of Seller set forth in Section 6.9.5, Buyer shall be entitled to receive an amount (the "Monthly Shortfall Compensation") equal to the product of (a) ten percent (10%), multiplied by (b) the amount of the Monthly Shortfall Gas attributable to the Initial On-Sale Agreement during such Delivery Month, multiplied by (c) the then applicable Contract Price with respect to the Initial On-Sale Agreement. For purposes of this Section 6.9.3, Monthly Delivery Failure and Monthly Shortfall Gas shall be allocated on a pro rata basis among all On-Sale Agreements with respect to which there have been nominations for delivery of Gas during the Delivery Month during which such Monthly Delivery Failure occurred based on the respective nominations for such On-Sale Agreements for such Month.

6.9.4 Buyer shall deduct any Monthly Shortfall Compensation payable by Seller pursuant to Section 6.9.3 of Annex 1 from the Monthly Payment (as described in Section 9.3.2 of this Annex 1) for such Delivery Month.

6.9.5 To the extent that there is a Monthly Delivery Failure in respect of any Delivery Month, Seller shall be obligated to deliver such Monthly Shortfall Gas in accordance with the following procedures:

(a) Within thirty (30) days following the Delivery Month in which the Monthly Delivery Failure occurred, the Parties, acting in good faith, will agree on the delivery schedule of such Monthly Shortfall Gas; such delivery schedule shall provide for the delivery of all such Monthly Shortfall Gas within a period of 180 days following the last day of the Delivery Month during which the Monthly Delivery Failure occurred.

(b) The delivery of such Monthly Shortfall Gas shall be in addition to the other delivery obligations of Seller pursuant to this Agreement. Buyer shall pay no additional amounts for such Gas other than the applicable Contract Price for such Gas in effect during the Delivery Month in which the Monthly Delivery Failure occurred.

(c) To the extent that Seller makes available quantities of Monthly Shortfall Gas in accordance with the provisions of this Section 6.9.5, any Daily Shortfall Compensation previously deducted by Buyer pursuant to Section 6.8.3(a) of Annex 1, and any Monthly Shortfall Compensation previously deducted by Buyer pursuant to Sections 6.9.3 and 6.9.4 of Annex 1, attributable to such quantities of Monthly Shortfall Gas shall be paid by Buyer to Seller, such payment to be made within thirty (30) days following the end of the Month during which such deliveries of Monthly Shortfall Gas occurred.

6.9.6 For the sole purpose of calculating any Monthly Shortfall Gas in respect of periods of permitted Seller's Scheduled Maintenance or Seller's Unscheduled Maintenance, the aggregate of the Properly Nominated Quantities for each Day during such Delivery Month shall be deemed to be the lesser of the aggregate of Buyer's actual Properly Nominated Quantities for such Day and the aggregate of the maximum hourly quantities of Gas that Seller anticipated Seller could deliver during each Hour of such Day pursuant to Seller's notice to Buyer in accordance with Section 5.2 of this Annex 1.

Section 9.3.2 of Annex 1 to the GSPA provides:

Monthly Payment. On or before the fifteenth (15th) Business Day after Buyer's receipt by facsimile of Seller's Monthly Invoice (the "Monthly Payment Due Date") Buyer shall pay Seller the "Monthly Payment", which is an amount equal to

(a) the total quantity of Gas taken by Buyer during the Delivery Month multiplied by (ii) the applicable Contract Price;

Except_for reasons of Force Majeure, less the aggregate of:

(b) the Daily Shortfall Compensation for such Delivery Month;

(c) Payments due to Buyer during the Delivery Month from Seller as a result of Seller's failure to begin deliveries as set forth in Sections 4.5 and 4.6;

(d) Payments due to Buyer during the Delivery Month from Seller as a result of Seller's delivery of Off-Specification Gas during such Delivery Month, as set forth in Sections 8.4 and 8.5;

(e) any other amounts due to Buyer from Seller during such delivery Month.

Disputed Invoices. If a Party has a bona fide dispute with respect to any sum shown in any invoice (or accompanying statement) as being payable by that Party, then such Party shall (i) pay in full all of the undisputed amount shown in such invoice on or before the relevant due date, (ii) promptly give notice to the other Party of the amount in dispute and the reasons therefore, (iii) in such notice, inform the other Party whether the Party disputing such amount intends to pay such disputed amount pending resolution of such dispute (in which case such disputed amount shall be paid together with the payment of any undisputed amount), or withhold payment of the disputed amount pending resolution of the dispute. The Parties shall seek to settle the disputed amount as soon as reasonably practicable. Any disputed amount agreed or determined, pursuant to Article 14 to be not payable by the Party disputing such amount shall (to the extent that such disputing Party previously paid such disputed amount) shall be re-paid by the other Party to the disputing Party (such amount to be included in the Monthly Invoice or Annual Statement, as applicable, next following such agreement or determination, together with the interest on such amount at a rate equal to the Agreed Interest Rate plus three percent (3%) (compounded annually) from the date when such payment was due until and including the date when the disputed amount was settled or decided pursuant to Article 14. Any disputed amounts agreed or determined, pursuant to Article 14, to be payable by the Party disputing such amount shall be retained by the other Party if the disputing Party previously paid such disputed amount, or (to the extent that such disputing Party elected not to pay such disputed amount) shall be paid by the disputing Party to the other Party (such amount to be included in the Monthly Invoice or Annual Statement, as applicable, next following such agreed or determination, together with interest on such amount at a rate equal to the Agreed Interest Rate plus three percent (3%) (compounded annually) from the date when such payment was due until and including the date when the disputed amount was settled or decided pursuant to Article 14.

Art. 16.3 Annex 1 to the GSPA defines "force majeure" as follows:

[it] means an event or circumstance which is beyond the control of the Party concerned (acting and having acted as a Reasonable and Prudent Person), resulting in or causing the delay or the failure by such Party to perform all or any of its obligations under this Agreement (including, in the case of Buyer, the inability to take delivery of any Properly Nominated Quantity of Gas and in the case of Seller, the inability to deliver the Properly Nominated Quantities of Gas), which delay or failure could not have been prevented or overcome by the standard of a Reasonable and Prudent Person.

A Person seeking in good faith to perform its contractual obligations and in so doing and in the general conduct of its undertaking exercising that degree of skill, prudence, diligence and foresight that would reasonably and ordinarily be expected from a skilled and experienced Person complying with Law engaged in the same type of undertaking under the same or similar circumstances and conditions.

A Party claiming force majeure must act as a Reasonable and Prudent Person in preventing the effects of any force majeure events (and as soon as reasonably practicable after the commencement of an event of force majeure, a Party claiming force majeure must act as a Reasonable and Prudent Person to overcome and mitigate the effects of such event of force majeure), and shall continue to perform its obligations pursuant to this Agreement to the extent such obligations are not impacted by such force majeure events. To the extent a Party claiming force majeure fails to act as a Reasonable and Prudent Person in preventing or mitigating the effects of any force majeure events, such Party shall not be excused for any delay or failure to perform that would have been avoided if such Party had acted as a Reasonable and Prudent Person.

Force majeure relief will cease to be available to the affected Party in the event of a failure to take all reasonable steps to remedy the failure as soon as practicable.

Notice of force majeure: In the event of a force majeure, the affected Party will serve notice of such force majeure to the other Party as soon as is reasonably practicable, promptly provide a report of the circumstances of such force majeure, providing all relevant information as is available as to such event (including the Place thereof, the reasons for failure and the reasons why such Party's obligations under this Agreement were affected), and from time to time, provide updates of such event, including further information and explanation as it becomes available.

(i) During those months, EGAS delivered gas to EMG and issued invoices²⁷⁹, however, EMG did not pay any of these invoices in full when they became due²⁸⁰ despite selling the gas onwards to its On-Sale Customers and receiving payment for the gas.

(ii) As a result, EGAS notified EMG that it would terminate the GSPA pursuant to Section 2.5.2 on 24 August 2011.²⁸¹

(iii) By 11 October 2011, 30 Business Days after EGAS's written notice, EMG had not made any payment of the amounts it owed.

(iv) Over the following six months, EGAS provided EMG with five opportunities to cure its default.²⁸²

(v) By April 2012, EMG had not paid for any of the invoices issued between January 2011 through March 2012, except for the principal amount of the January 2011 invoice and a partial payment of the February 2011 invoice, almost a year late in each case.²⁸³

(vi) EGAS sent EMG a letter on 19 April 2012, stating that it was exercising its right to terminate the GSPA under Section 2.5.2.²⁸⁴

(vii) On 9 May 2012, EMG wrote to EGAS stating that it terminated the GSPA at common law, reasoning that EGAS has committed a repudiatory breach of the GSPA.

Under Sir Bernard's construction of Article 9.4.7, a Party which does not dispute an invoice under 9.4.7(ii), is not under an obligation to pay the undisputed amount under 9.4.7(i).²⁸⁶ The Party receiving the invoice could dispute it by doing nothing²⁸⁷, so that it would be for the other Party (the Seller in the case of monthly invoices) to find out if the Buyer is actually disputing the invoice or not.²⁸⁸ In answer to a question from the President, Sir Bernard confirmed that even if the Buyer failed to dispute an invoice under 9.4.7, that would not "change [] the amounts that are due" for purposes of Article 2.5.2.²⁸⁹

Both Lord Hoffmann and Sir Bernard agree, however, that the use of the term "shall" in Article 9.4.7 is mandatory, and that it triggers an obligation to pay any undisputed amount shown as being payable in an invoice.²⁹²

Articles 6.8 and 6.9 of Annex 1 to the Source GSPA expressly provided that shortfall compensation would continue to accrue regardless of any claim of force majeure, pending agreement of the parties or an arbitral decision. Once agreement was reached or a tribunal confirmed the force majeure entitlement, EGPC/EGAS would then be credited for any shortfall penalties for which it was not liable. In the meantime, shortfall penalties were incorporated into the Monthly Payment calculation described in Article 9.3.2 for purposes of determining the amounts due under the Source GSPA . No agreement was ever reached between the parties, and arbitral proceedings under the Source GSPA are still pending. EGPC/EGAS therefore had no entitlement to terminate the Source GSPA.²⁹⁴ (Tribunal's emphasis)

In its Award, the ICC Tribunal clearly sided with Sir Bernard's interpretation of Article 9.4.7 of Annex 1 to the GSPA. It concluded:

1028. The Tribunal finds the following matters compelling:

- The matters to be specified in a statement supporting a Monthly Invoice under Art. 9.3.1 differ in material respects from the elements to be taken into account in calculating the Monthly Payment under Art. 9.3.2;

- The GSPA accords primacy to the Monthly Payment, in that the Monthly Payment is expressed to be the amount payable by EMG;

- […] circumstances might well arise in which there was nothing to challenge in a Monthly Invoice even though the invoiced amount was greater, perhaps substantially greater, than the Monthly Payment, correctly calculated; in such circumstances, it would be surprising if EMG became bound to pay the greater amount, merely by reason of its failure to launch a challenge to an invoice that was unimpeachable;

- It is necessary to bear in mind that the contractual provisions relating to monthly payments underpin the grounds for termination set out at Art. 2.5.2 of Annex 1;

- On EGAS' case, the payment obligation at Art. 9.3.2 ceases to apply, being supplanted by an obligation to pay the amount claimed in a Monthly Invoice;

- Annex 1 contains no wording, still less clear wording, to show that, in the absence of a challenge an invoiced amount becomes payable;

- Similarly, there is no wording to show that the payment obligation at Art. 9.3.2 is supplanted.

1029. Having regard to these matters, on this question the Tribunal prefers the arguments advanced on behalf of EMG and IEC. It holds that Art. 9.4.7 did not apply to Monthly Invoices issued pursuant to Art. 9.3.1.³⁰²

The ICC tribunal also concluded that it was "satisfied that, even in a case of suspected or alleged force majeure, the deductions fall to be made, unless and until there is agreement or a determination to the effect that the force majeure provisions apply."³⁰³

1064. The Tribunal must now decide whether EGAS' termination was prima facie lawful: had EMG failed to pay the amounts due for four consecutive months? EMG accepts that it owed amounts for the months of January, March and April 2011; but it denies that amounts were due for February 2011 – quite the contrary, EMG submits that for that month it was EGAS who owed EMG a sizeable amount.

1065. Determination of how much was owed for February 2011 requires as a first step to decide whether EMG can be deemed to have recurrently nominated quantities during that month (A.) and, if so, how much gas was deemed nominated (B.) and whether such deemed nomination is in agreement with the maximum daily nominations admitted by the GSPA (C.). As a third step the Tribunal must establish the amount EGAS owed to EMG for that month as Shortfall Compensation (D.). Finally, the Tribunal will prepare a table with the balance due (E.) […]³⁰⁴

The ICC tribunal also found that EGAS could not invoke the force majeure defence. As a result, the deductions for the shortfall compensations it had applied could not be credited to EGPC/EGAS and its finding that EMG did not owe any amount to EGAS under the GSPA for the month of February 2011 was reiterated. The ICC Tribunal summarized its findings in respect of force majeure as follows:

1790. Between 5 February 2005 and 9 April 2012 the Pipeline was attacked 13 times, explosives were used to blow up the pipe or its facilities, the gas flow was interrupted while repairs were carried out, and EGAS stopped gas deliveries to EMG (and EMG to IEC). EGAS claims that the attacks on the Pipeline amounted to force majeure events, that the contractual requirements for that force majeure event to become a contractual remedy have been met, and that EGAS' failure to deliver is thereby justified.

1791. The GSPA establishes two requirements for the availability of EGAS' force majeure defence:

- the requirement that EGAS acted as a RPPO (i.e. as a Reasonable and Prudent Pipeline Operator) and

- the so-called Avoidance Requirement: had EGAS acted as a RPPO the attacks could indeed have been mitigated or prevented.

1792. After a detailed review of the evidence marshalled by the Parties, the Tribunal has come to the conclusion:

- That EGAS has failed to prove that it acted as a RPPO in preventing and mitigating the effects of the attacks; in particular, it has failed to prove that it implemented security plans, provided physical security to the pipe, deployed technological detection devices, and retained proper security forces; and

- That the evidence in the file indicates that the attacks initially against the facilities and afterwards against the pipe could have been avoided (or, at least, significantly mitigated) had EGAS acted as a RPPO and adopted the minimal standard security measures suggested by the counter-experts.

1793. Consequently, the Tribunal dismissed the force majeure defence: EGAS' failure to perform and to deliver the contractually agreed quantities of gas cannot be excused. The Tribunal also dismissed all additional arguments and defences raised by EGAS relating to this issue.³⁰⁷

[W]hether there has been a breach of the BIT and whether there has been a breach of contract are different questions. Each of these claims will be determined by reference to its own proper or applicable law – in the case of the BIT, by international law; in the case of the Concession Contract by the proper law of the contract […]³⁰⁹

The term "investment" is defined in Article I of the Treaty as follows:

"Investment" means every kind of asset owned or controlled and includes but is not limited to:

(i) tangible and intangible property, including rights, such as mortgages, liens and pledges;

(ii) a company or shares, stock, or other interests in a company or interests in the assets thereof;

(iii) a claim to money or a claim to performance having economic value, and associated with an investment;

(iv) valid intellectual and industrial rights property, including, but not limited to rights with respect to copyrights and related patents, trade marks and trade names, industrial designs, trade secrets and know-how, and goodwill.

(v) licenses and permits issued pursuant to law, including those issued for manufacture and sale of products.

(vi) any right conferred by law or contract, but not limited to rights within the confines of law to search for or utilize natural resources, and rights to manufacture, use and sell products;

(vii) returns which are reinvested.³¹⁰

The Tribunal recalls that Article III(1) of the US Treaty provides:

No investment or any part of an investment of a national or company of either Party shall be expropriated or nationalized by the other Party or by a subdivision thereof – or subjected to any other measure, direct or indirect, if the effect of such other measures, or a series of such measures, would be tantamount to expropriation or nationalization (all expropriations, all nationalizations and all such other measures hereinafter referred to as "expropriation") – unless the expropriation

(a) Is done for a public purpose;

(b) Is accomplished under due process of law;

(c) Is not discriminatory;

(d) Is accompanied by prompt and adequate compensation, freely realizable; and

(e) Does not violate any specific contractual engagement.

[…]

Having found that the wrongful termination of the GSPA by the Respondent is tantamount to an expropriation, the Tribunal need not determine whether the termination constitutes a breach of the FET standard or the umbrella clause³¹⁷.

The Tribunal recalls that the Claimants modified their claim for damages after the Decision on Jurisdiction and Ampal's election. They now claim US$635 million detailed as follows³¹⁸:

Summary of aggregate losses now claimed in the ICSID arbitration, including interest and value leakage (US$million) and as adjusted to remove David Fischer's claim and reduce Ampal's claim in accordance with its election

(a) the Claimants' property interest in the tax license was unlawfully expropriated by the Respondent by the enactment of Law 114/2008 on 5 May 2008 and that the Claimants should be compensated for this unlawful expropriation up until the year 2025 (and not beyond);

(b) the Claimants were not coerced into signing the First Amendment and are therefore not entitled to any compensation in relation to this head of loss;

(c) the Claimants have not succeeded in their claim of losses attributable to delivery failures between July 2009 and February 2011;

(d) by failing to protect the Trans-Sinai pipeline, the Respondent breached the standard of full protection and security under the Treaty and the Claimants should be compensated for this breach as of attack no. 5 (12 July 2011); and

(e) the Claimants' property interest in its shares in EMG was unlawfully expropriated by the Respondent by the wrongful termination of the GSPA on 9 May 2012 and the Claimants should be compensated for this breach.

(a) To the extent relevant to the claims before the Tribunal, EGPC/EGAS's acts are attributable to the Respondent;

(b) The Respondent breached Article III(1) of the Treaty by expropriating the Claimants' property interest in EMG's tax license on 5 May 2008;

(c) The Respondent breached Article II(4) of the Treaty by failing to protect the Claimants' investment as of 12 July 2011;

(d) The Respondent breached Article III(1) of the Treaty by expropriating the Claimants' investment in EMG on 9 May 2012;

(e) Dismisses the Parties' other claims in respect of liability; and

(f) Reserves its decision as to quantum and costs.