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EMG v. EGPC, EGAS and IEC

East Mediterranean Gas S.A.E. v. Egyptian General Petroleum Corporation, Egyptian Natural Gas Holding Company and Israel Electric Corporation Ltd., ICC Case No. 18215/GZ/MHM
Nature of the proceedings:
International
Type of case:
Commercial Arbitration
Economic sector:
Electricity, gas, steam and air conditioning supply (energy)
Electricity, gas, steam and air conditioning supply (energy)
Date of introduction:
6 Oct 2011
Status of the case:
Concluded
Claimant’s country of origin:
Egypt
Respondent's country of origin:
Egypt
,
Israel
Institution:
ICC (International Chamber of Commerce)
Rules of arbitration:
Seat of arbitration:
Geneva
Applicable law:
England and Wales

Documents of the case

profile picture Juan Fernández-Armesto President
profile picture John Marrin Appointed by the Appointing Authority
profile picture Osman Berat Gürzumar Appointed by the Appointing Authority
Picture of partner

This document was contributed under the IBA x Jus Mundi Exclusive Partnership for Commercial Arbitration.

Contributor(s):

ICC has not contributed to this publication.

Lawyers, other representatives, expert(s), tribunal’s secretary

Final Award

ABBREVIATIONS AND ACRONYMS

2% Tranche Portion of Daily Shortfall Gas which is exempted from accruing Shortfall Compensation
2012 PUA Decision Decision issued by PUA on 14 June 2012
7% Tranche Threshold of the Monthly Shorfall Gas which triggers the right for Monthly Shortfall Compensation
ACQ Annual Contract Quantity
Additional Costs/Additional Fuel Costs Costs of alternative fuels incurred by IEC as a consequence of EGAS' breaches of the Tripartite Agreement
Admissibility Objections EGAS' admissibility objections as to lEC's claims against EGAS
AGP Arab Gas Pipeline in the Middle East for export of Egyptian natural gas to Jordan, Syria, Lebanon and Israel
Al Sakka FWS First witness statement from Mr. Maamoun Al-Sakka, Managing Director for Operations at EMG
Al Sakka SWS Second witness statement from Mr. Maamoun Al-Sakka, Managing Director for Operations at EMG
Amit WS Witness statement from Mr. Moshe Amit, Manager of Economics, Financial Planning and Tariffs at IEC
Andrews Legal Opinion prepared by Ms. Geraldine Andrews Q.C. of Essex Court Chambers
Aronovich WS Witness statement from Mr. Igor Aronovich, Senior Deputy Operations Manager at IEC
Art. Article
Art. 1 Article 1 of the Tripartite Agreement
Art. 14.9 Art. 14.9 of Annex 1 to the GSPA
Art. 16 Art. 16 of Annex 1 to the GSPA
Authorisation Decree No. 100 of 2004 issued by the Ministry of Petroleum
Avoidance Requirement Condition for the availability of the force majeure defence
A-XXX Communications from the Tribunal
B&O’B-Freeny FR First report on repairs of the Pipeline prepared by Mr. Charles C. Freeny, Mr. Gerald B. Gump and Mr. Timothy D. Rooney from Baker & O’Brien, expert witnesses presented by Claimant
B&O’B-Freeny SR Second report on repairs of the Pipeline prepared by Mr. Charles C. Freeny, Mr. Gerald B. Gump and Mr. Timothy D. Rooney from Baker & O’Brien, expert witnesses presented by Claimant

B&O’B-Schrader FR First report on security of the Pipeline prepared by Mr. Benjamin F. Schrader from Baker & O’Brien, expert witnesses presented by Claimant
B&O’B-Schrader SR Second report on security of the Pipeline prepared by Mr. Benjamin F. Schrader from Baker & O’Brien, expert witnesses presented by Claimant
Balance of Payments Item of compensation claimed by EMG consisting of the net amounts owed between EGAS and EMG
BCM Billion cubic meters of natural gas
Brokman FWS First witness statement form Mr. Shimshon Brokman, Head of the Fuel Management Department in the Generation and Transmission Division at IEC
Brokman SWS Second witness statement form Mr. Shimshon Brokman, Head of the Fuel Management Department in the Generation and Transmission Division at IEC
Buyer EMG
CFSC Claimant's First Submission on Costs
C FS J Claimant’s First Submission on Jurisdiction
C FS M Claimant’s First Submission on the Merits
C PHB Claimant’s Post Hearing Brief
C S RF Claimant’s submission on reverse flow
C SS J Claimant’s Second Submission on Jurisdiction
C SS M Claimant’s Second Submission on the Merits
C SU SC Claimant’s Second Updated Statement of Costs
C SupS Claimant’s Supplemental Submission
C USC Claimant’s Updated Statement of Costs
Cairo Arbitration Arbitration under the CRCICA Rules initiated by EGPC and EGAS against EMG pursuant to Art. 14.2 of the GSPA
Claimant East Mediterranean Gas S.A.E.
Com. C-XXX Communications from Claimant addressed to the Tribunal
Com. R1+2-XXX Communications from Respondents 1 and 2 addressed to the Tribunal
Com. R3-XXX Communications from Respondent 3 addressed to the Tribunal
Committee of Five Committee instructed to issue a Technical Report by the Cairo criminal court in the case felony no. 3642 of 2011
common law right EMG's right to accept EGAS' termination of the GSPA and the Tripartite Agreement at common law
Conciliatory Letter Letter sent by EMG to EGAS of 21 September 2011
Contracts The GSPA, the On-Sale Agreement and the Tripartite Agreement

Cook Report on the security of the Pipeline prepared by Dr. Steven Cook, expert witness presented by Respondent 3
Court The International Court of Arbitration of the ICC
CRCICA Cairo Regional Centre for International Commercial Arbitration
CY Contract Year
DCF Discounted Cash Flow
DCQ Daily Contract Quantity
Doc. CLA-XXX Legal authorities presented by Claimant
Doc. C-XXX Documentary evidence presented by Claimant
Doc. H-XXX Documents submitted by the Parties during the First and Second Hearing
Doc. R1+2-XXX Documentary evidence presented by Respondents 1 and 2
Doc. R3-XXX Documentary evidence presented by Respondent 3
Doc. RL1+2-XXX Legal authorities presented by Respondents 1 and 2
Dolphinus Dolphinus Holding Limited
EBT Earnings before taxes
EGAS Egyptian Natural Gas Holding Company
EG PC Egyptian General Petroleum Corporation
Eiland Report on the security of the Pipeline prepared by Major General Giora Eiland, expert witness presented by Respondent 3
EMG East Mediterranean Gas S.A.E.
EMG Pipeline Ramification of the Peace Pipeline constructed and operated by EMG
Enforceability Objections EGAS' enforceability objection as to the unenforceability of the GSPA
EUR Euros
Facilities Valve stations, railway valves, traps and off-take rooms of the Pipeline
FHT First Hearing Transcript
Fifth Amendment Fifth amendment of the On-Sale Agreement on 17 September 2009
First Amendment First amendment of the GSPA on 31 May 2009
First Hearing Hearing held at the ICC Hearing Center located at 112 avenue Kléber, 75016 Paris, between 13 and 24 January, 2014
First Proposal First proposal by EGAS for the calculation of the daily maximum
fn. Footnote
Framework Resolution Resolution issued by the Egyptian Council of Ministers on 18 September 2000

FSPL Swiss Federal Statute on Private International Law
FTI 1 First expert report on damages produced by FTI Consulting on behalf of Claimant
FTI II Second expert report on damages produced by FTI Consulting on behalf of Claimant
FTI/JWC Joint expert report from Messrs. Moselle and Nicholson (Claimant’s experts) and Messrs. Wood-Collins and Giles (Respondents 1 and 2’s experts) on calculation of EMG’s losses
GASCO EGAS’ subsidiary entrusted with the operation of the AGP
GBP British pound sterling
GSPA Long-term gas purchase and sale agreement between EMG and EGPC/EGAS entered into on 13 June 2005
GSPA Claims EMG’s claims under the GSPA
Gurevich WS Witness statement from Mr. Vladimir Gurevich, Manager in the Generation System Planning Department at IEC
Hoffman 1 First legal opinion of Lord Hoffman on behalf of Respondents 1 and 2
Hoffman II Second legal opinion of Lord Hoffman on behalf of Respondents 1 and 2
ICC The International Court of Arbitration of the ICC
ICC Costs Advance on costs fixed by the ICC
ICC Rules Rules of Arbitration of the ICC in force as from 1 January 1998
Jurisdictional Objections EGAS' jurisdictional objections as to EMG's claims against EGAS
JWC EGAS experts Mr. John Wood Collins and Mr. Timothy Giles
JWC I to VIII Expert reports on damages prepared by Mr. John Wood Collins and Mr. Timothy Giles, expert witnesses presented by Respondents 1 and 2
KTISTAR Operator of the EMG Pipeline
Legal Fees Reasonable legal and other costs incurred by the parties for the arbitration
Letter of Intent Letter of Intent signed by Dolphinus and the Delek Group on 19 October 2014
Ling FR First report on the security of the Pipeline prepared by Brigadier Tony Ling CBE, expert witness presented by Respondent 3
Ling SR Second report on the security of the Pipeline prepared by Brigadier Tony Ling CBE, expert witness presented by Respondent 3
LNG Liquidified natural gas
Long FAC Long Term Future Additional Costs

Long FAC Long Term Future Additional Costs in Nera's calculation of lEC's damages
MFO Multinational Force and Observers
MIDOR Middle East Oil Refinery
MMBTU Million British thermal unit
MoU Memorandum of Understanding signed by the States of Egypt and Israel on 30 June 2005
Near FAC Near Term Future Additional Costs
Near FAC Near Term Future Additional Costs in Nera's calculation of lEC's damages
Nera Nera Economic Consulting
Nera I to III Three expert reports on damages prepared by Nera Economic Consulting, on behalf of Respondent 3
NIS Israeli new Shekel
Nudelman FWS First witness statement form Ms. Lena Nudelman, Head of Maintenance Planning at IEC
Nudelman SWS Second witness statement form Ms. Lena Nudelman, Head of Maintenance Planning at IEC
On-Sale Agreement Long-term gas purchase and sale agreement between EMG and IEC entered into on 8 August 2005
Other Costs Other costs incurred by IEC as a consequence of EGAS' breaches of the Tripartite Agreement
Other ICC Arbitration ICC Arbitration initiated on 21 September 2011 by Claimant versus Respondent 3 but suspended by agreement of the parties
p. Page
PAC Past Additional Costs
para. Paragraph
Partial Award in the Cairo Arbitration Partial Award in the Cairo Arbitration issued on 11 November 2013
Parties EMG, IEC and EGAS and EGPC
Pelham FR First report on the security of the Pipeline prepared by Mr. Nicolas Pelham, expert witness presented by Respondents 1 and 2
Pelham SR Second report on the security of the Pipeline prepared by Mr. Nicolas Pelham, expert witness presented by Respondents 1 and 2
Pipeline First section of 192 km of the AGP between Damietta and Al-Arish
PNQs Properly Nominated Quantities
PO Procedural Order
Post-Tamar AC Period selected by the Tribunal to assess Respondent 3's damages
Press Release Press release issued on 18 March 2015 by the Delek Group

Pre-Tamar AC Period selected by the Tribunal to assess Respondent 3's damages
PUA Public Utilities Authority of Israel
PUA Decisions Decisions issued by the Public Utilities Authority of Israel
PUA Letter Letter of PUA dated 14 May 2014
R1+2 FS C Respondents 1 and 2's First Submission on Costs
R1+2 FS J Respondents 1 and 2's First Submission on Jurisdiction
R1+2 FS M Respondents 1 and 2's First Submission on the Merits
R1+2PHB Respondents 1 and 2's Post Hearing Brief
r1+2s rf Respondents 1 and 2's Submission on Reverse Flow
R1+2 SC Respondents 1 and 2's Statement of Costs
R1+2SI Respondents 1 and 2's Submission on Interest
R1+2 SS J Respondents 1 and 2's Second Submission on Jurisdiction
R1+2SS M Respondents 1 and 2's Second Submission on the Merits
R1+2SupS Respondents 1 and 2's Supplemental Submission
R1+2USC Respondents 1 and 2's Updated Statement of Costs
R3 FS C Respondent 3's First Submission on Costs
R3 FS J Respondent 3's First Submission on Jurisdiction
r3 fs m Respondent 3's First Submission on the Merits
r3 phb Respondent 3's Post Hearing Brief
R3 S RF Respondent 3's Submission on Reverse Flow
R3 SS J Respondent 3's Second Submission on Jurisdiction
R3 SS M Respondent 3's Second Submission on the Merits
R3 SupS Respondent 3's Supplemental Submission
r3 USC Respondent 3's Updated Statement of Costs
Release of Claims Letter signed by EMG and EGPC/EGAS dated 31 May 2009 agreeing reciprocal release of claims for liability for breaches of the GSPA prior to the First Amendment
Respondent 1 or EGPC Egyptian General Petroleum Corporation
Respondent 2 or EGAS Egyptian Natural Gas Holding Company
Respondent 3 or IEC Israeli Electric Corporation LTD.
Respondents 1 and 2 EGAS and EGPC
Reverse Flow Hypothesis raised by Respondents 1 and 2 in relation to the quantification of EMG's claim, consisting of the possibility of gas being imported from Israel to Egypt through EMG’s pipeline
Ronai WS Witness statement from Mr. Yaron Ronai, Head of the Haifa office at IEC
RPPO Reasonable and Prudent Pipeline Operator
RPPO Requirement Condition for the availability of the force majeure

defence
Rules Rules of Arbitration of the ICC in force as from 1 January 1998
Second Hearing Hearing held at the ICC Hearing Center located at 112 avenue Kléber, 75016 Paris, on 15 and 16 May, 2014
Second Proposal Second proposal by EGAS for the calculation of the daily maximum
Seller EGPC/EGAS
SHT Second Hearing Transcript
Simulated Actual Scenario Item used by Respondent 3's expert in the damages calculation
Simulated What If Scenario Item used by Respondent 3's expert in the damages calculation
Source Contract Long-term gas purchase and sale agreement between EMG and EGPC/EGAS entered into on 13 June 2005
Tamar Contract Contract entered into by IEC on 14 March 2012 for the supply of gas from the Tamar field
Technical Report Report issued in February 2014 by the Committee of Five before the Cairo criminal court in the case felony no. 3642 of 2011
Terms of Reference Terms of Reference governing this arbitration approved by the Court on 26 July 2012
The April Ruling Tribunal's communication A 68
Third Proposal Third proposal by EGAS for the calculation of the daily maximum
Tripartite Agreement Agreement concluded between EMG, EGPC and EGAS and IEC on 13 June 2005
Tripartite Agreement Claims EMG’s claims under the Tripartite Agreement
Tripartite Delivery Breaches EGAS’ breach of its delivery obligations under the Tripartite Agreement
Tripartite Repudiatory Breach EGAS' breach of the Tripartite Agreement for repudiation of the GSPA and Tripartite Agreement
UK Base Rate UK Clearing Banks’ Base Lending Rate
USD United States dollar
Valuation Date Valuation date used by the Tribunal to calculate compensation owed by EGAS to IEC
WACC Weighted Average Cost of Capital
Weiss WS Witness statement from Moshe Weiss, Contract Manager at the Mechanical Department at IEC

I. PERSONS INVOLVED IN THE ARBITRATION

1. The Parties

1.1 Claimant

1.
The Claimant is EAST MEDITERRANEAN Gas S.A.E. ["Claimant" or "EMG"], a privately owned company incorporated in Egypt for the purpose of purchasing natural gas for export to locations in the East Mediterranean and, in particular, to Israel. Its registered office is at:

24 Roushdy St.
Heliopolis 11361
Cairo
Egypt

2.
EMG is represented in this arbitration by Ms. Lucy Reed, Mr. Noah Rubins, Mr. Ben Juratowitch and Mr. Ben Love from Freshfields Bruckhaus Deringer LLP, Mr. Niv Sever from M. Firon & Co. Advocates, and Mr. Sarwat Abd El-Shahid from Sarwat A. Shahid LAW Firm, who stated that notifications and communications arising in the course of the arbitration should be made at:

Ms. Lucy Reed
Freshfields Bruckhaus Deringer LLP
11th Floor
Two Exchange Square
Hong Kong
Tel: +852 2846 3400
Fax: +852 2810 6192
Email: lucy.reed@freshfields.com

Messrs. Noah Rubins, Ben Juratowitch and Ben Love
Freshfields Bruckhaus Deringer LLP
2, rue Paul Cézanne
75008 Paris
France
Tel: +33 (0) 1 44564456
Fax: +33 (0) 1 44564400
Email: noah.rubins@freshfields.com
ben.juratowitch@freshfields.com
ben.love@freshfields.com

Mr. Niv Sever
M. Firon & Co. Advocates
16 Abba Hillel Silver St.
Ramet Gan 52506
Israel
Tel: +972 375 40000
Fax: +972 375 40011
Email: niv_firon.co.il

Mr. Sarwat Abd El-Shahid
Sarwat A. Shahid Law Firm
20 B Adly Street
Cairo
Egyt
Email: sarwat@shahidlaw.com

1.2 Respondents 1 and 2

3.
Respondent 1 is Egyptian General Petroleum Corporation ["Respondent 1" or EGPC"], an entity organised and existing under the laws of Egypt. EGPC is engaged inter alia in the exploration, refining and processing of crude oil as well as the production of natural gas. It holds a stake of 10% of the share capital of EMG1. Its registered office is at:

4 Palestine Street
4th Division
New Maadi 11742
Cairo
Egypt

4.
Respondent 2 is Egyptian Natural Gas Holding Company ["Respondent 2" or "EGAS"], an entity organised and existing under the laws of Egypt. EGAS is engaged in the upstream and downstream natural gas sectors and its activities include the exploration, production, processing, transmission, distribution and liquefaction of natural gas, as well as the marketing and sale of natural gas in both its gas and liquefied forms. Its registered office is at:

85, El Nasr Road
1st District, Nasr City 11371
P.O. Box 8064
Cairo
Egypt

5.
Respondents 1 and 2 are represented in this arbitration by Prof. Emmanuel Gaillard, Dr. Yas Banifatemi, Mr. Alexander Uff and Mr. Mohamed Shelbaya from Shearman & Sterling LLP, who stated that notifications and communications arising in the course of the arbitration should be made at:

Prof. Emmanuel Gaillard
Dr. Yas Banifatemi
Mr. Alexander Uff
Mr. Mohamed Shelbaya
Shearman & Sterling LLP
114 Avenue des Champs-Elysées
75008 Paris
Prance
Tel. +33 1 53 89 70 00
Pax: +33 1 53 89 70 70
E-mail: egaillard@shearman.com
ybanifatemi@shearman.com
alexander.uff@shearman.com
mohamed.shelbaya@shearman.com

1.3 Respondent 3

6.
Respondent 3 is the ISRAEL ELECTRIC CORPORATION LTD. ["Respondent 3" or "IEC"], a State-owned electricity company, incorporated under the laws of Israel which generates, transmits and distributes substantially all of the electricity used in Israel. IEC is EMG’s anchor buyer2. Its registered office is at:

1 Netiv Haor Str.
Haifa
Israel

7.
Respondent 3 is represented in this arbitration by Mr. Neil Q. Miller and Ms. Emma Rooney from Norton Rose Fulbright LLP3, who stated that notifications and communications arising in the course of the arbitration should be made at:

Mr. Neil Q. Miller
Ms. Emma Rooney
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
United Kingdom
Tel: +44 20 7283 6000
Fax: +44 20 7283 6500
E-mail: neil.q.miller@nortonrosefulbright.com emma.rooney@nortonrosefulbright.com

2. The Arbitral Tribunal

8.
On 5 April 2012 the ICC International Court of Arbitration [the "ICC" or the "Court"] decided, pursuant to Art. 10(2) of the Rules of Arbitration of the ICC in force as from 1 January 1998 [the "Rules" or the "ICC Rules"], to appoint Mr. John Marrin QC and Mr. Osman Berat Gürzumar co-arbitrators and Mr. Juan Fernández-Armesto as Chairman of the Arbitral Tribunal. The arbitrators stated that notifications and communications arising in the course of the arbitration should be made at:

Mr. John Marrin QC
Keating Chambers
15 Essex Street
London WC2R 3AA
United Kingdom
Tel: +44 20 7544 2600
Fax: +44 20 7544 2700
E-mail: j marrin@keatingchambers.com

Mr. Osman Berat Gürzumar
Bilkent Universitesi Hukuk Fakultesi
06800 Bilkent-Ankara
Turkey
Tel: +90 312 290 34 90
Fax: +90 312 266 22 80
E-mail: berat@bilkent.edu.tr

Mr. Juan Fernández-Armesto (Chairman)
Armesto & Asociados
General Pardiñas 102
28006 Madrid
Spain
Tel: +34-91,562.16.25
Fax: +34-91,515.91.45
E-mail: jfa@jfarmesto.com

3. The ICC Secretariat

9.
The administration of this arbitration was granted to the ICC Secretariat, in the person of Mrs. Galina Zukova, who initially acted as Counsel for the case management. All notifications and communications should be addressed at:

33-43 avenue du President Wilson,
75116 Paris
France
Tel: +33-1 49 53 29 05
Fax: +33 1 49 53 29 33
E-mail: ica7@iccwbo.org

10.
On 30 November 2012 the ICC Secretariat informed the Parties and the Tribunal that Mrs. Maria Hauser-Morel replaced Mrs. Zukova as Counsel in charge of the arbitration.

4. The Administrative Secretary

11.
On 26 July 2012 the Parties agreed on the appointment of Mrs. Deva Villanúa as Administrative Secretary, in order to perform the support requested by the Tribunal, such as keeping all documents and records arising in the course of the arbitration.

II. PROCEDURAL HISTORY

12.
This arbitration has lasted four years. The parties have produced hundreds of communications and submissions (EMG 98, EGAS 111 and IEC 70) and the Tribunal has issued 78 decisions. It is impossible to summarise each submission, communication and decision in this chapter devoted to recapitulating the procedural history. The Tribunal however, confirms that it has carefully analysed all submissions and communications submitted by the Parties and that all decisions are reasoned on the basis of such submissions.

1. The arbitration clause

13.
The Parties to this arbitration are linked by three different contracts, each of which created a separate legal relationship:

- the GSPA is a long-term gas purchase and sale agreement between EMG (Buyer) and EGPC/EGAS (Seller), which are jointly and severally liable pursuant to Art. 13.3 of the GSPA (for convenience EGPC/EGAS will frequently be referred to simply as "EGAS" or as the "Seller"), entered into on 13 June 2005. EGAS agreed to make a specific volume of natural gas available to EMG on a take or pay basis at the delivery point located at Al-Arish, Egypt. This contract enables EMG to satisfy its obligations as seller towards its customers under the on-sale agreements.

- the On-Sale Agreement is another long-term gas purchase and sale agreement between EMG (Seller) and IEC (Buyer) entered into on 8 August 2005. EMG undertook to deliver to IEC a specific amount of natural gas on a take or pay basis at the delivery point located at Ashkelon, Israel.

- the Tripartite Agreement was concluded between all Parties (EGAS and EGPC, EMG and IEC). The purpose of this agreement was for EGAS to guarantee the supply of gas to IEC through fulfilling their obligations towards EMG under the GSPA.

14.
This arbitration was initiated by EMG pursuant to the arbitration clauses contained in the GSPA and the Tripartite Agreement. IEC is also pursuing its counterclaim against EGAS under the arbitration clause of the Tripartite Agreement.

GSPA

15.
Art. 9.2 of the GSPA provides as follows:

"Dispute Resolution. All Disputes or disagreements arising under this Agreement and in connection hereto will be conducted in the English language and as per the applicable procedures in Article 14 of Annex 1 and Annex 4 (Expert Provisions), respectively".

16.
Annex 1 to the GSPA contains its "General Terms and Conditions". And Art. 14 of Annex 1 refers to "Governing Law and Dispute Resolution", and provides for three separate dispute resolution clauses:

"Art. 14.2 -Disputes and Arbitration

Except as set forth in Section 14.9 and 14.11[4] and Paragraph 17 of Annex 4[5], if any dispute between the Parties arising out of or in connection with this Agreement ("Dispute") has not been settled within thirty (30) days of a Party notifying the other Party of the Dispute, then a Party wishing to arbitrate such Dispute may submit such Dispute to arbitration in accordance with and pursuant to the Rules of Arbitration of the Cairo Regional Centre for International Commercial Arbitration ("CRCICA"). All Disputes submitted for arbitration shall be heard and resolved by a panel of three (3) arbitrators, appointed according to the rules of the CRCICA; provided that no member of such panel of arbitrators shall be connected and/or associated with any of the Parties and/or their legal and other advisors. The seat of arbitration shall be in Cairo, Egypt. The arbitration proceedings shall be conducted in the English language, and all documentation submitted for the consideration of the panel shall be translated into English at the expense of the submitting Party".

"Art. 14.9 - Arbitration under On-Sale Agreement

Notwithstanding the foregoing provision of this Article 14, if Buyer and Seller have a Dispute under this Agreement, and if a dispute arising from or related to the same or similar factual circumstances at issue in the Parties’ disagreement is subject to dispute resolution under any On-Sale Agreement, Buyer may choose to resolve the Dispute between Buyer and Seller pursuant to the dispute resolution procedures of the relevant On-Sale Agreement; provided that (a) Buyer provides Seller with notice of the dispute under the relevant On-Sale Agreement, and Buyer’s election to resolve such Dispute pursuant to the dispute resolution procedures under the relevant On-Sale Agreement ("Dispute Resolution Notice"), on or before fifteen (15) days following initiation of the applicable dispute resolution procedure under the On-Sale Agreement; and (b) Buyer shall consult with Seller in respect of such dispute resolution procedure. If Buyer delivers such Dispute Resolution Notice and Seller gave his written consent, neither Party may seek arbitration or an Expert determination regarding such Dispute under this Agreement, and the outcome of such dispute resolution under the On-Sale Agreement shall be binding on the Parties hereunder".

"Art. 14.10 - Disputes under the Tripartite Agreement

Notwithstanding the provisions of the Tripartite Agreement to the contrary, if any dispute under the Tripartite Agreement arises between EGPC and EGAS on the one hand, and EMG on the other hand, and if the Initial On-Sale Customer is not a party to such dispute, such dispute shall be resolved pursuant to the dispute resolution provisions provided for in this Article 14".

Tripartite Agreement

17.
The Tripartite Agreement includes the following dispute resolution clause:

"9. This Tripartite Agreement shall be governed by, and construed in accordance with, the Laws of England, but excluding (to the fullest extent) any rules or principles of English Law that would prevent adjudication upon (or accord presumptive validity to) the transactions of sovereign states, and without regard to such principles or requirements of conflicts of Laws that would require the application of Laws of any other jurisdiction to govern this Agreement or any matter arising hereunder. If any dispute between the Parties arising out of or in connection with this Agreement ("Dispute"), has not been settled within (30) Days of a Party of the Dispute, then a Party wishing to arbitrate such Dispute may submit such Dispute to arbitration in accordance with and pursuant to the Rules of Arbitration of the International Chamber of Commerce ("ICC"). All Disputes submitted for arbitration shall be heard and resolved by a panel of three (3) arbitrators, appointed according to the ICC rules; provided that no member in such panel of arbitrators shall be a citizen or national of either Egypt or Israel or a citizen or national of a country which does not have diplomatic relations with either Egypt or Israel, nor will any member of such panel of arbitrators be connected and/or associated with any of the Parties and/or their legal and other advisors. The seat of arbitration shall be in Geneva, Switzerland. The arbitration proceedings shall be conducted in the English language, and all documentation submitted for the consideration of the panel shall be translated into English at the expense of the submitting Party. For the purposes of enforcement in Egypt of any decision or award rendered pursuant to this Tripartite Agreement, the Egyptian Arbitration Law No. 27 of 1994, as amended from time to time, shall apply".

On-Sale Agreement

18.
Another relevant dispute resolution clause, which however is not being invoked by any of the Parties, is the arbitration clause contained in the On-Sale Agreement:

"10.2 Disputes and Arbitration. Except as set forth in Section 10.9, if any dispute between the Parties arising out of or in connection with this Agreement ("Dispute"), has not been settled within (30) days of a Party notifying the other Party of the Dispute, then a Party wishing to arbitrate such Dispute may submit such Dispute to arbitration in accordance with and pursuant to the Rules of Arbitration of the International Chamber of Commerce ("ICC"). All Disputes submitted for arbitration shall be heard and resolved by a panel of three (3) arbitrators, appointed according to the ICC rules; provided that no member in such panel of arbitrators shall be a citizen or national of either Egypt or Israel or a citizen or national of a country which does not have diplomatic relations with either Egypt or Israel, nor will any member of such panel of arbitrators be connected and/or associated with any of the Parties and/or their legal and other advisors. The seat of arbitration shall be in Geneva, Switzerland. The arbitration proceedings shall be conducted in the English language, and all documentation submitted for the consideration of the panel shall be translated into English at the expense of the submitting Party".

2. Seat of arbitration, language and applicable law

19.
As per arbitration clause 14 of the GSPA and 10.2 of the On-Sale Agreement; and clause 9 of the Tripartite Agreement, the seat of this arbitration is Geneva, Switzerland. The Parties to these agreements also arranged for the proceedings to be conducted in English language; and the applicable law to be English law. Accordingly, all of these agreements were incorporated into the Terms of Reference6.

3. The commencement of the arbitration

20.
On 7 October 2011 the Secretariat of the Court registered EMG’s Request for Arbitration submitting claims against EGPC, EGAS and IEC under the Tripartite Agreement and claims against EGPC and EGAS under the GSPA7, received by the Secretariat on 6 October 2011.
21.
On 10 November 2011 Norton Rose LLP, representing IEC - as Respondent 3 -informed the Court that due to the divergence of interests with those of EGAS, a joint nomination by all respondents of a co-arbitrator was not feasible. For this reason IEC requested the Court to appoint the Tribunal pursuant to Art. 10(2) of the Rules8.
22.
On the same day Sherman & Sterling LLP informed the Secretariat that it would be representing EGPC and EGAS as Respondents 1 and 2 in this arbitration. Furthermore, it objected to the appointment of the Tribunal under Art. 10(2) of the Rules as suggested by Respondent 3. It alleged that IEC was not a "proper party" to this arbitration and that its inclusion as respondent was only a tactic by EMG and IEC to deprive Respondents 1 and 2 of their right to nominate a co-arbitrator. It therefore requested leave to nominate a co-arbitrator9. EMG rejected such suggestions10. The Secretariat referred the final decision on the constitution of the Tribunal to the Court11.
23.
Furthermore, the Secretariat invited the Parties to comment on the application of Art. 6(2) - i.e. the Court’s determination of prima facie jurisdiction12. The Parties presented their comments on this issue on 30 November and 2 December 201113.
24.
Subsequently, after being granted an extension of time14, on 21 December 2011 Respondents 1 and 2 and Respondent 3 filed their respective Answers to the Request for Arbitration. Respondents 1 and 2 requested leave to file comments on Respondent 3’s Answer to the Request for Arbitration. Accordingly, the Secretariat granted all the Parties until 6 February 2012 to file comments on each of Respondent’s Answers to the Request for Arbitration, and specifically to address whether the matter should proceed pursuant to Art. 6(2) of the Rules15.
25.
In the meantime, on 23 January 2012, Respondent 3 filed a Counterclaim against Claimant and Respondents 1 and 2. Claimant and Respondents 1 and 2 were invited to file a response to the Counterclaim within 30 days from the day following the notification of said Counterclaim16.
26.
Respondents 1 and 2 alleged that Respondent 3’s Counterclaim included new allegations and new claims against EGPC and EGAS which had not been advanced in the Respondent 3’s Answer to the Request for Arbitration dated 21 December 2011. Respondents 1 and 2 therefore requested an extension of time in order to file in one single submission their comments regarding Art. 6(2) of the Rules and the response to Respondents 3’s Counterclaim17. Claimant and Respondent 3 opposed such request18, and the Secretariat eventually rejected the requested extension of time19.
27.
On 9 February 2012 the Secretariat20

- acknowledged receipt of Claimant’s and Respondent 3’s comments on Art. 6(2) of the Rules and noted that Respondents 1 and 2 had failed to submit comments within the allotted time frame;

- confirmed that Respondents 1 and 2’s right to make comments on Art. 6(2) had expired;

- noted that the Court was to examine whether the arbitration should proceed pursuant to Art. 6(2) of the Rules taking into consideration Claimant’s and Respondent 3’s comments of 6 February 2012 and Respondents 1 and 2’s letter dated 10 November 2011 and the Answer to the Request for Arbitration of 21 December 2011; and

- decided that it was appropriate to grant Respondents 1 and 2 permission to file a submission with comments on Respondent 3’s Answer to the Request for Arbitration and Counterclaim.

28.
On 27 February 2012 Claimant and Respondents 1 and 2 submitted their respective Replies to Respondent 3’s Counterclaim. Additionally, Respondents 1 and 2 requested that their Reply should be taken into account by the Court in relation to the pending decision pursuant to Art. 6(2) of the Rules. By letter of 29 February 2012 Respondent 3 opposed said request.
29.
In its session of 1 March 2012 the Court decided that, pursuant to Art. 6(2) of the Rules, the arbitration should proceed21. The Secretariat noted that, in assessing this issue, the Court had examined all the Parties’ submissions, including Claimant’s and Respondents 1 and 2’s Replies dated 27 February 2012 and Respondent 3’s letter of 29 February 201222.
30.
Furthermore the Secretariat noted the disagreement between the Parties in respect of the constitution of the Tribunal - namely Respondent 3’s request for the Court to appoint the Tribunal in toto23, and approved by Claimant24, which was opposed by Respondents 1 and 2, who requested authorisation to nominate a co-arbitrator without consulting or obtaining an agreement with Respondent 325 - and transmitted their comments to the Court for it to adopt a final decision.
31.
On 5 April 2012, pursuant to Art. 10(2) of the Rules, the Court decided to appoint26:

- Mr. John Marrin QC as co-arbitrator;

- Mr. Osman Berat Gürzumar as co-arbitrator;

- Mr. Juan Fernández-Armesto as Chairman of the Arbitral Tribunal.

32.
As per Art. 7(2) of the Rules, each member of the Tribunal provided the Secretariat with a Statement of Acceptance, Availability and Independence, and their curriculum vitae, for its transmittal to the Parties27. None of them raised an objection or comments regarding appointment of the members of the Tribunal by the Court.

4. PO 1 and the Terms of Reference

33.
On 24 April 2012 the Parties and the Tribunal held a case management conference call to establish the procedure for drawing up the Terms of Reference. The agreed procedure consisted in the circulation among the Parties and the Tribunal of two successive drafts incorporating the agreed issues and the points still under discussion. Additionally, the Tribunal requested the Parties to make a submission on the appropriateness of bifurcating the proceeding into a jurisdictional phase and a mertis phase28. The Parties presented their submission on bifurcation by 24 May 2012.
34.
On 31 May 2012 the Parties and the Tribunal held a meeting in Paris at the offices of Freshfields Bruckhaus Deringer LLP, at 2, rue Paul Cézanne, 75008 Paris for the purpose of signing the Terms of Reference and discussing and, if possible, agreeing the procedural timetable contained in a draft Procedural Order No. 1 ["PO 1"]. The Parties did not reach an agreement as to the place of arbitration, and this lack of agreement led to the Terms of Reference not being signed by the Parties during the meeting. Additionally, Claimant and Respondent 3 agreed to incorporate into the file a redacted version of their On-Sale Agreement29.
35.
On 31 May 2012 the Tribunal requested the Court to make a determination of the place of arbitration pursuant to Art. 14(1) of the ICC Rules. On 21 June 2011 and after comments of the Parties in relation to this issue30, the Court decided not to fix the place of arbitration pursuant to Art. 14(1) of the ICC Rules and stated that any question as to the scope and validity of the arbitration agreement was to be decided by the Tribunal31.
36.
The Tribunal then invited the Parties to comment on the determination of the place of arbitration32. Thereafter, on 9 July 2012, the Tribunal issued its PO 1 in which it decided that the proper place of arbitration was Geneva, Switzerland; this being the place of arbitration agreed upon by the Parties in the arbitration clauses invoked by Claimant in its Request for Arbitration (Art. 14.9 of the GSPA, with a cross-reference to Art. 10.2 of the On-Sale Agreement, which provides that the seat of the arbitration shall be Geneva, Switzerland, and Art. 9 of the Tripartite Agreement, which foresees that the seat of arbitration be Geneva, Switzerland).
37.
The determination of the seat of arbitration was incorporated into the Terms of Reference, which thereafter were duly signed by Claimant, Respondent 3 and the Arbitral Tribunal, and was transmitted to the Court, and approved by the latter on 26 July 201233. The Secretariat invited Respondents 1 and 2 to sign the approved Terms of Reference within a period of 15 days34. Despite Respondents 1 and 2’s non-compliance with the Secretariat’s invitation, the arbitration proceeded pursuant to Art. 18(3) of the Rules.

5. PO 2

38.
On 1 August 2012 the Tribunal issued Procedural Order No. 2 ["PO 2"] and decided to provisionally bifurcate the proceedings to address the jurisdictional and admissibility objections. The Tribunal nevertheless reserved the right to join the jurisdictional issues to the merits.
39.
Accordingly, it established two different procedural calendars: one if the Tribunal decided to issue a decision on the jurisdictional issues separately from the merits; another in case the Tribunal decided to opt-out of the provisional bifurcation.

6. First Submissions Jurisdiction and PO 3

40.
On 31 July 2012 the Parties simultaneously filed the First Submission on Jurisdiction35.
41.
Claimant’s and Respondents 1 and 2’s submissions included a request for document production. Thereafter, on 14 August 2012, each Party submitted a response to the document production request addressed to it36; and on 28 August 2012 they filed a subsequent reply37.
42.
On 10 September 2012 the Tribunal issued Procedural Order No. 3 ["PO 3"] deciding on the document production requests on jurisdictional issues.

7. PO 4

43.
Prior to the signature of the Terms of Reference, the Parties had initiated negotiations on the confidentiality regime for this arbitration, but were unable to reach an agreement38. On 27 July 2012 the Tribunal invited the Parties to submit their last proposals on the confidentiality issue39.
44.
On 14 August 2014, after hearing the Parties, the Tribunal issued communication A-9 in which it decided that the confidentiality status would be adopted by the Tribunal on a case-by-case basis, upon a specific request by any Party of a confidentiality order with regards to any document or set of documents40.
45.
On 13 September 2012 Claimant and Respondent 3 filed a request for a confidentiality order in relation to the documents that came to light after the document production41; and on 18 September 2012 Respondents 1 and 2 responded to said request42. On 19 September 2012 Claimant submitted additional arguments43.
46.
The Tribunal issued Procedural Order No. 4 ["PO 4"] adopting a confidentiality order in relation to the documents produced in compliance with PO 3. These documents should not be disclosed to third parties or used for any other purpose than this arbitration, save for written consent by the disclosing party, or order or permission by a competent court.

8. Second Submission Jurisdiction and PO 5 and 6

47.
On 16 October 2012 the Parties filed their Second Submission on Jurisdiction44; and after reviewing Respondents 1 and 2’s objections on jurisdiction and admissibility and Claimant’s and Respondent 3’s response, the Tribunal held a meeting to deliberate and decided to join the jurisdictional issues to the merits and adjudicate both issues in the same award45.
48.
Accordingly, the Tribunal issued Procedural Order No. 5 modifying the provisional calendar and providing guidance to the Parties on the additional briefing required with regard to certain jurisdictional issues. This new provisional calendar was later modified by the Tribunal, after consultation with the Parties, in Procedural Order No. 6 ["PO 6"]46.
49.
The new calendar provided for a first round of submissions (the First Submission on the Merits) followed by a document production phase, after which the Parties would file a Second Submission on the Merits. The merits phase would conclude with a hearing and the presentation by the Parties of Post-Hearing Briefs.

9. First Submission Merits and PO 7

50.
On 7 February 2013, pursuant to the calendar established on PO 6, the Claimant and Respondent 3 simultaneously presented their respective First Submissions on the Merits47. With its First Submission on the Merits Respondent 3 presented its assessment of the damages allegedly suffered, which was based on the software program UCOD.
51.
Respondents 1 and 2 requested the Tribunal to order Respondent 3 to produce certain information and codes which were relevant for operating the models used in IEC’s damages calculation. After hearing the Parties48, the Tribunal issued Procedural Order No. 7 ["PO 7"] and decided to order Respondent 3 to deliver to Respondents 1 and 2 the information provided to Respondent 3’s expert and to provide Respondents 1 and 2 the necessary assistance in running the models49. Furthermore, the Tribunal granted leave to Respondents 1 and 2 to present an extraordinary submission on the UCOD model.
52.
On 6 June 201350 Respondents 1 and 2 filed their First Submission on the Merits in response to Claimant’s and Respondent 3’s submission51; and on 17 July 2013 Respondents 1 and 2 presented their Supplemental Submission with regard to the UCOD program52.

10. Document production and PO 8

53.
On 28 June 2013, pursuant to the procedural calendar53 and its subsequent amendment54, the Parties filed their respective requests for document production; and on 10 and 17 July 2013 each Party presented a response and a follow-up reply to the requests made by the other Parties.
54.
On 26 July 2013 the Tribunal issued Procedural Order No. 8 ["PO 8"] which formalised its decision with regard to the document production requests submitted by the Parties.
55.
On 3 August 2013 Respondents 1 and 2 informed that they would not be able to comply with the deadline set by the Tribunal for the production of documents due to the social unrest that Egypt was going through55. After numerous communications with the Parties, the Tribunal decided that Claimant and Respondent 3 were to prioritise the documents they required most for the preparation of the Second Submission on Merits and ordered Respondents 1 and 2 to produce documents on a rolling basis as they became available with a cut-off date set at 24 October 2013. Claimant and Respondent 3 would be given the opportunity to file a Supplemental Submission with their observations to any document produced by Respondents 1 and 2 after 28 August 201356.

11. Second Submission Merits and Supplemental Submissions

56.
On 19 September 2013 Claimant and Respondent 3 simultaneously presented their Second Submissions on the Merits57; and on 15 December 2013 Claimant and Respondent 3 simultaneously presented their Supplemental Submissions58.
57.
On 9 December 2013 Respondents 1 and 2 presented its Second Submission on the Merits59.

12. PO 9

58.
On 10 October 2013 Respondents 1 and 2 objected to the content of Claimant’s Second Submission on the Merits, alleging that Claimant had introduced new allegations and a new claim not previously raised: that Respondents 1 and 2 had forced Claimant through coercion to accept the amendment of the GSPA60.
59.
The Tribunal granted all Parties the opportunity to put in submissions in relation to this issue61. Claimant accepted that it had introduced a new claim, not included in the Terms of Reference, and asked for authorisation to do so, under Art. 19 of the Rules62.
60.
On 27 November 2013 the Tribunal issued Procedural Order No. 9 ["PO 9"] and decided to dismiss Claimant’s motion to introduce its new claim, given the advanced stage of the proceedings and the undue delay that the admission of the new claim would generate63.

13. PO 10 and Hearing

61.
The Hearing took place in the premises of the ICC Hearing Centre located at 112 avenue Kléber, 75016 Paris, between January 13 and 24, 2014 ["First Hearing"].
62.
The Tribunal had previously thereto issued Procedural Order No. 10 ["PO 10"], organising the procedural and technical matters affecting the First Hearing.
63.
The following witnesses and experts attended the First Hearing and were duly examined by counsel to the Parties:

On behalf of Claimant

Witnesses Experts
Mr. Maamoun Al SakkaMr. James Nicholson (FTI Consulting)
Mr. Abdel Hamid Ahmed HamdyMr. Boaz Moselle (FTI Consulting)
Mr. Charles Freenv (Baker & O’Brien)
Mr. Benjamin Schrader (Baker & O’Brien)

On behalf of Respondents 1 and 2

Witnesses64 Experts
Mr. John Wood-Collins and Mr. Tim Giles
Mr. Nicolas Pelham

On behalf of Respondent 3

Witnesses Experts
Ms. Lena NudelmanMr. Steven Cook
Mr. Yaron RonaiMr. Giora Eiland
Mr. Shimshon BrokmanMr. Graham Shuttleworth
Mr. Moshe Amit

64.
As per PO 10 the First Hearing was transcribed by a Court Reporter [the "FHT"]. A corrected version of the FHT was approved by the Parties.

14. PO 11; PHB, Second Hearing and costs

65.
During the First Hearing the Tribunal requested the Parties to produce certain evidence and to address specific issues in their Post-Hearing Briefs. The Tribunal set forth in Procedural Order No. 11 ["PO 11"] a calendar for submissions on each of the issues on which the Tribunal required assistance, and fixed a date to hold a second hearing [the "Second Hearing"].
66.
Pursuant to PO 11, on February 2014 the Parties submitted joint expert reports, and where unable to reach an agreement, their respective approaches in relation to each issue:

- Annual Reconciliation Simulation according to Claimant’s construction and Respondents 1 and 2’s construction;

- A joint expert report from Messrs. Moselle and Nicholson (Claimant’s experts) and Messrs. Wood-Collins and Giles (Respondents 1 and 2’s experts) on calculation of EMG’s losses65;

- A counter-report of Messrs. Wood-Collins and Giles (Respondents 1 and 2’s experts) on the report prepared by Nera (Respondent 3’s expert) on IEC’s losses; Respondent 3 presented a reply to the Wood-Collins and Giles counter-report prepared by its expert Mr. Graham Shuttleworth (Nera).

67.
The Tribunal also declared the record closed and that only under exceptional circumstances would the Tribunal admit further evidence upon application by one party after hearing the counterparties66.
68.
On 8 April 2014 the Parties simultaneously presented their Post-Hearing Briefs67. In its closing submission Respondent 3 requested the Tribunal for leave to amend its prayer for relief - in particular its claim for interest68. After receiving submissions from the Parties69, the Tribunal held that the new position of Respondent 3 in relation to its claim for interest was not a new claim in the sense of Art. 19 of the Rules, and therefore, declared it admissible; and afforded Respondents 1 and 2 an opportunity to present a submission on this issue70. Respondents 1 and 2 did so by 30 May 201471.
69.
On 15 and 16 May 2014 the Second Hearing was held at the ICC Hearing Centre located at 112 Avenue Kléber, 75016 Paris. The Parties devoted the Second Hearing to present their concluding remarks on jurisdiction and merits issues. No witness or expert was examined. The Second Hearing was transcribed by a Court Reporter [the "SHT"]. A corrected version of the SHT was approved by the Parties.
70.
Pursuant to the Tribunal’s directions in PO 11 and A-58, on 30 May 2014 the Parties simultaneously presented their First Submission on Costs72. On 24 July 2015 the Parties updated their submissions on costs73 pursuant to the Tribunal’s directions74. On 11 November 2015 the Claimant further updated its cost submission.

15. Post-hearing incidents

15.1 Reverse Flow incident

71.
Seven months after the submission of the Post-Hearing Briefs, on 21 November 2014 Respondents 1 and 2 filed a communication requesting exceptional leave to introduce new and previously unavailable documentary evidence, which allegedly revealed the possibility of gas being imported from Israel to Egypt through EMG’s pipeline ["Reverse Flow"]; EGAS submitted that the Reverse Flow would have a direct impact on EMG’s claim for damages. Respondents 1 and 2 further requested that the Tribunal afford the Parties an opportunity to file written and oral submissions on this issue75. After hearing the Parties76, the Tribunal authorised EGAS request and invited Claimant and Respondent 3 to present documentary evidence in reply77; the Tribunal however rejected for the time being Respondents 1 and 2’s request for written and oral submissions, pending the analysis of the documentary evidence78.
72.
On 23 December 2014 Respondents 1 and 2 requested leave to present a short submission, arguing that Claimant had not only submitted documentary evidence, but also made substantive allegations79. The Tribunal granted the request, and Respondents 1 and 2 presented their submission on 9 January 201580.
73.
Thereafter both Claimant and Respondents 1 and 2 requested another round of written arguments and supporting evidence81. The Tribunal allowed the marshalling of further documents; and invited the Parties to propose a schedule for filing written arguments and evidence82.

Briefs on Reverse Flow

74.
The Tribunal finally adopted a calendar for the Parties to file briefs, and submit documents, witness statements and expert reports on Reverse Flow. Respondents 1 and 2 had also requested a hearing83, but the Tribunal postponed its decision, until it had had the opportunity to review the Parties’ submissions [the "April Ruling"]84.
75.
Accordingly, Respondents 1 and 2 filed their submission on Reverse Flow on 18 May 201585. Respondent 3 did so by 15 June 201586 and Claimant presented its submission by 22 July 201587.

Further application

76.
Respondents 1 and 2 filed another application to submit four documents regarding Reverse Flow88, one of which was a certain portion of the transcript of the hearing in a parallel arbitration under the CRCICA Rules between EGPC and EGAS, and EMG. After hearing all Parties89, on 10 September 2015 the Tribunal accepted three of the documents90, but in a reasoned decision declined to accept the transcript91. The Tribunal added that the introduction of transcripts was inappropriate, since the Tribunal had, "for the time being", not yet adopted a decision to organise a hearing and to examine witnesses on the Reverse Flow issue, making reference to its April Ruling92.
77.
On 18 September 2015 Respondents 1 and 2 submitted the documents which had been authorised, and complained that the Tribunal’s decision of 10 September 2015 indicated that the Tribunal had prejudged its decision not to summon witnesses on Reverse Flow93. According to Respondents 1 and 2, in the April Ruling the Tribunal had stated that it would decide whether subsequent steps were required, after having had the opportunity to review the Parties’ submissions on Reverse Flow, while now in September the Tribunal stated that it had decided not to summon (for the moment) the witnesses and experts on Reverse Flow. Respondents 1 and 2 reserved all their rights and recourse in relation to this alleged violation of due process.
78.
The Tribunal does not agree with Respondents 1 and 2’s complaint that their due process rights have been infringed. No possible interpretation of the Tribunal’s words can lead to the conclusion that it had prejudged its decision on whether to hold a hearing or not. The Tribunal’s statement that "it ha[d] decided not to summon (for the moment) the witnesses and experts on reverse flow" was a true reflection of reality: in April Respondents 1 and 2 had requested that the Tribunal hold a hearing, but the Tribunal had postponed its decision and in September the decision remained pending. In any case, the Tribunal’s remark was made as an alternative argument. The reason for not accepting the CRCICA arbitration transcripts was that they were not necessary.
79.
In their submissions the Parties have sufficiently briefed the Arbitral Tribunal on this issue and the Tribunal will discuss in chapter XIV of the Award dealing with the quantum of EMG’s claims, the actual value of EMG’s pipeline. In that chapter the Arbitral Tribunal will analyse in detail all the arguments raised by the Parties.

15.2 The alleged forgery and exclusion of witness statements

80.
A year after the conclusion of the Second Hearing, on 30 May 201594, Respondents 1 and 2 averred that the document production in the CRCICA arbitration had revealed the existence of two different versions of the minutes of the meeting of EMG’s Board of Directors held on 2 November 2009 (none of the two versions had been produced in this arbitration). Respondents 1 and 2 alleged that one of the minutes was forged and requested that it be allowed to introduce new documents into the record.
81.
Claimant and Respondent 3 rejected Respondents 1 and 2’s assertion that one of the versions of the minutes was forged and objected to the introduction of this evidence into the file95. On 6 July 2015, upon the authorisation from the Tribunal granted on 15 June 2015, Respondents 1 and 2 filed a reply and sought to submit to the record eight additional new documents, and to examine Messrs. Hamdy and Al Sakka on the issue. Respondents 1 and 2 alleged that these documents revealed that the witness statements given by Mr. Hamdy and Mr. Al Sakka (EMG’s executives) in this arbitration in relation to the negotiation of the First Amendment, was contradictory with their testimony given in other arbitrations. Respondents 1 and 2 also asked to be given the opportunity to make written and oral submissions regarding the impact of the alleged forgery on the case96. One of the new documents were the excerpts of the transcripts in the CRCICA arbitration, allegedly relevant to the issue of forgery.
82.
The Tribunal accepted the documents and granted the Parties an opportunity to file written submissions97. Respondents 1 and 2 did so on 12 August 2015 and Claimant and Respondent 3 on 26 August 201598.
83.
In its 12 August 2015 submission Respondents 1 and 2 also requested99:

- the exclusion of Mr. Hamdy’s and Mr. Al Sakka’s witness statements100;

- authorisation to submit two additional demonstrative exhibits, which allegedly disproved the credibility of one of EMG’s witness.

84.
Claimant and Respondent 3 opposed these requests101. Furthermore, Claimant asked the Tribunal to exclude form the record the portions of the transcript of the CRCICA arbitration submitted by Respondents 1 and 2 which did not relate the forgery issue102.
85.
The Tribunal granted Claimant’s request to exclude from the record the parts of the transcript of the CRCICA arbitration which were not related to the forgery issue103. And, after having reviewed all submissions from the Parties, the Tribunal concluded that there was no legitimate reason to exclude Messrs. Hamdy’s and Al Sakka’s witness statements; and that it would assess the credibility of the witnesses and decide what evidentiary weight would be attached to each testimony taking into consideration all arguments advanced by the Parties. The Tribunal also admitted into the record the two demonstrative exhibits requested by Respondents 1 and 2.

16. Summary of the evidence

86.
The documentary evidence presented by the Parties was:
PartyDocumentsLegal authorities
Claimant Doc. C-1 through Doc. C-428 Doc. CLA-1 through Doc. CLA-146
Respondents 1 and 2 Doc. R1+2-1 through Doc. R1+2-724104 Doc. RL1+2-1 through Doc. RL1+2-144
Respondent 3 R3-1 to R3-414105
87.
The Parties presented the following witness statements106:
ClaimantPosition
Mr. Maamoun Al Sakka107 Managing Director for Operation, Engineering and Contracts at EMG
Mr. Abdel Hamid Ahmed Hamdy Commercial Manager at EMG
Respondent 3
Mr. Igor Aronovich108 Senior Deputy Operations Manager at IEC
Ms. Lena Nudelman109 Head of Maintenance Planning at IEC
Mr. Yaron Ronai110 Head of the Natural Gas and Coal Department, Generation & Transmission Division at IEC
Mr. Shimshon Brokman111 Head of the Fuel Management Department in the Generation and Transmission Division at IEC
Mr. Moshe Amit112 Manager of the Economics, Financial Planning and Tariffs Department at IEC
Mr. Alexander Zaid Company Comptroller at IEC
Mr. David Elmakis Senior Vice President and Head of the Planning, Development and Technology Division at IEC
Mr. Joseph Dvir Former Senior Vice President and CFO at IEC
Mr. Moshe Weiss113 Contract Manager in the Mechanical Department in the Generation Division at IEC
Mr. Vladimir Gurevich114 Manager in the Generation System Planning Department in the Planning, Development & Technology Division at IEC
Mr. Zecharia Kay Head of Finance Division at IEC
88.
Respondents 1 and 2 did not submit any witness statements.
89.
The Parties presented reports from the following expert witnesses :
ClaimantIssue
Mr. Charles C. Freeny, Mr. Gerald B. Gump and Mr. Timothy D. Rooney from Baker & O’Brien Two expert reports on repairs of the Pipeline115
Mr. Benjamin F. Schrader from Baker & O’Brien Two expert reports on security116
Mr. Boaz Moselle and Mr. James Nicholson from FTI Consulting Two expert reports on quantification of EMG’s damages117, and an Annual Reconciliation Simulation
Ms. Zoe Young, Mr. Richard Poole and Mr. Bill Cline form Gaffney, Cline & Associates Compliance with document production
Mr. Daniel Muthmann from Global Gas Partners GmbH A financial report
Respondents 1 and 2
Mr. Nicolas Pelham (independent consultant) Two expert reports on security118
Mr. Chris Clements form Grant Thornton LLP Two expert reports on quantification of IEC’s damages
Ms. Geraldine Andrews Q.C. of Essex Court Chambers A legal opinion119
Leonard, Lord Hoffman Two legal opinions120
Mr. John Wood-Collins (independent consultant) and Tim Giles from Independent Economics & Finance LLP Eight expert reports on quantification of EMG’s and lEC’s damages121
Respondents 3
Major General (ret.) Giora Eiland An expert report on security122
Dr. Steven Cook, Senior Fellow at the Council on Foreign Relations An expert report on security123
Brigadier Tony Ling CBE Two expert reports on security124
Mr. Graham Shuttleworth from Nera Economic Consulting Three expert reports on lEC’s damages125
Joint Expert Reports
Calculation of EMG’s losses by Messrs. Boaz Moselle and James Nicholson from FTI Consulting (Claimant) and Messrs. John Wood-Collins and Tim Giles (Respondents 1 and 2)

17. Advance on costs

90.
The Court initially fixed the advance on costs at USD 240,000126; thereafter, on 1 August 2013, it fixed it at USD 750,000127; and on 27 March 2014 the Court reconsidered the advance on costs and decided to increase it to USD 2,215,000128. It made a last adjustment and increased the advance on costs to USD 2,930,000129.
91.
The Parties have contributed to the advance on costs in the following amounts130:
PartyAmount paid
Claimant USD 1,146,633131
Respondent 2 USD 738,370132
Respondent 3 USD 1,044,997133

18. Closing of the proceeding, time period for the issuance of the award

92.
Taking into consideration that the last submission by one of the Parties was filed on 18 September 2015, on 3 November 2015, in accordance with Art. 22 of the Rules, the Tribunal declared the proceedings closed with respect to the matters to be decided in this arbitration, and invited the Parties to submit their last update on their statement of costs, in light of the full payment made of the advance of costs on 20 October 2015134. Accordingly, on 11 November 2015 Claimant submitted its second updated statement of costs135.
93.
Pursuant to Art. 24(1) of the Rules, the time limit to render the Final Award is six months from the date of the approval of the Terms of Reference by the Court, i.e. 26 January 2013.
94.
In its session of 17 January 2013, pursuant to Art. 24(2) of the Rules, the Court extended the time limit for rendering the Final Award until 30 May 2014136; in its session of 28 May 2014, for the second time, the Court extended the time limit for rendering the Final Award until 31 October 2014137; and on 30 October 2014, once again, the Court extended the time limit for rendering the Final Award until 30 January 2015138 ; on 29 January 2015 the Court extended once more the time limit for rendering the Final Award until 29 May 2015139, and then until 31 August 2015140. The Court granted another extension until 30 October 2015141 and a last one until 31 December 2015142.
95.
Therefore, this Award is rendered within the time limit granted.

III. ALLEGED VIOLATIONS OF DUE PROCESS RIGHTS

96.
EGAS has repeatedly complained that its due process rights had been violated and has reserved its right with respect to such violations.
97.
When the arbitration reached the stage of the First Hearing, the Tribunal requested the Parties to present a brief, listing the alleged breaches of their due process rights and to propose a way in which such alleged violations could be remedied.
98.
On 24 January 2014 EGAS presented its list, setting out its reservation of rights in relation to alleged breaches of its due process rights143. EMG and IEC made no written submissions and instead addressed this issue orally on the last day of the First Hearing.

1. The Parties’ positions

99.
EGAS raised a number of due process violations144, which relate to the allegedly unfair treatment suffered, in view of the fact that EMG and IEC are aligned, and EGAS had to reply to two co-claimants under serious time constraints.
100.
Claimant submitted orally that this arbitration had been conducted in accordance with the principles of due process, and therefore, had nothing to object in this regard145. Additionally, Claimant expressed its concern regarding the effect that the due process violation allegations raised by Respondents 1 and 2 could have on the Tribunal’s decision making process; and requested the Tribunal to be vigilant so as to prevent that an abuse of these type of defences had an impact on its substantive decisions146.
101.
In line with Claimant’s position, Respondent 3 submitted that it had no complaints as to the conduct of the proceeding and the Parties’ due process rights147.

2. The Tribunal’s view

102.
The Tribunal will first analyse the applicable law to due process (2.1); and then it will express its views with respect to the allegations of violation of due process (2.2).

2.1 Applicable rules

103.
This arbitration is conducted under the Rules of Arbitration of the ICC in force as from 1 January 1998.
104.
Art. 15 of the ICC Rules sets forth that the proceedings shall be governed by the ICC Rules and, where silent, by any rules which the parties, or failing them, the Arbitral Tribunal may settle on. In this case, the Parties agreed that the Tribunal could take into consideration the IBA Rules on the Taking of Evidence in International Arbitration148.
105.
Furthermore, the seat of arbitration is Geneva, Switzerland149, and thus the lex fori applicable to procedural issues is Swiss law ; the law of the seat of arbitration provides the mandatory legal framework applicable to the conduct of an arbitral proceedings.
106.
Therefore, in analysing the compliance with the due process rights of the Parties in this arbitration the Tribunal shall first look at the ICC Rules (A.), then it will also take into account the IBA Rules on the Taking of Evidence (B.); and in any case, the Tribunal will give special relevance to the imperative rules on due process under Swiss Law (C.).

A. ICC Rules

107.
The ICC Rules include several norms which have the purpose of preserving the equality of arms among the parties during the proceedings.
108.
For instance, Art. 15(2) requires that the Tribunal acts fairly and impartially, and ensures that each party has a reasonable opportunity to present its case. Other principles, such as the assurance of the proper notification of communications (Art. 3) or the principle of contradictory proceeding and the right to be heard, also act as guarantees of equal treatment of the parties (Arts. 4, 5 and 21).

B. IBA Rules

109.
As for the IBA Rules on Taking of Evidence, they establish a framework to govern the taking of evidence in international arbitration (except if any provision is in conflict with mandatory rules) i.e., presentation of documents, witness examination, organisation of the evidentiary hearing and the admissibility and assessment of evidence.

C. Swiss Law

110.
The statute applicable to international arbitrations seated in Switzerland is Chapter 12 of the Swiss Federal Statute on Private International Law ["FSPL"], save where an explicit declaration by the parties to the arbitration for the exclusion of its applicability exists150. The present arbitration has its seat in Geneva, Switzerland151; and there is no record in the file of the existence of any agreements among the Parties that excludes the application of the FSPL to this arbitration.
111.
Under Swiss Law the determination of the rules of the arbitral procedure, and hence, the rules applicable to due process, is left, to a large degree, to the parties’ autonomy152; there is however, in Art. 182(3) of the FSPL a mandatory rule which neither the Parties, nor the Tribunal can derogate153:

"Regardless of the procedure chosen, the arbitral tribunal shall ensure equal treatment of the parties and the right of the parties to be heard in adversarial proceedings".

2.2 EGAS’ ALLEGATIONS OF VIOLATION OF DUE PROCESS

112.
EGAS maintains that it was put in an unfair position in this arbitration due to the fact that EMG and IEC were in fact two co-claimants, and EGAS had to respond to both their claims under procedural and time constraints154. Specifically, EGAS claims that:

- EGAS had to respond to two claimants in the same time frame that each of the claimants had to defend one case only; the Tribunal should have ordered EMG and IEC to act as co-claimants in this arbitration and by not doing so, EGAS’ right to equality of arms was breached155 (A.);

- EGAS was granted insufficient time and opportunities during the First Hearing156 (B.); and

- EGAS feels that the decisions made by the Tribunal regarding evidence afforded EGAS an unfair treatment (C.).

A. A case against two co-claimants

113.
The Tribunal agrees with EGAS that EMG’s and IEC’s positions in this arbitration are close to co-claimants: both are, basically, claiming against EGAS for breach of the gas supply obligations EGAS had assumed under the relevant contracts, and that EGAS wrongfully terminated the GSPA thereby repudiating the GSPA and the Tripartite Agreement.
114.
This notwithstanding, the Tribunal disagrees with EGAS on the consequences of there being two claimants: EGAS’ due process rights have not been violated.
115.
Multiple parties and multiple contracts are not uncommon in international commerce. And in this case, the three Parties concerned agreed to structure their complex relationship in two bilateral agreements (the GSPA and the On-Sale Agreement) plus a trilateral contract, the Tripartite Agreement, to which EGAS/EGPC, EMG and IEC were party, and which created an overall contractual framework, spanning the complete transaction. When they entered into this complex contractual structure, the three Parties must have foreseen that trilateral disputes could arise, and that these disputes would be solved under the dispute resolution mechanism agreed upon in the Tripartite Agreement. The very reason why the Tripartite Agreement was executed was precisely to create an overall bond between the Parties, and to establish a unified forum where tripartite disputes could be adjudicated in one single procedure by one single set of arbitrators.
116.
Tripartite disputes are consequently the natural outcome of the arbitration mechanism agreed upon in the Tripartite Agreement. Respondents 1 and 2 are wrong when they complain that they have been confronted with two co-claimants who acted in concert. This situation is the natural consequence of having executed the Tripartite Agreement: if EGAS/EGPC failed to deliver gas under the Tripartite Agreement, it would be confronted by a joint claim from EMG, the pipeline operator, and from IEC, the final buyer of the gas.
117.
Notwithstanding the fact that trilateral claims represent the natural outcome of signing a Tripartite Agreement, in the present arbitration the Tribunal has taken all necessary and appropriate measures to accommodate the proceedings to the trilateral nature of the dispute, whilst respecting all Parties’ due process rights. Such measures include, amongst other:

- EMG and IEC have been treated in this procedure as de facto co-claimants: they have produced submissions simultaneously and have been given equal time in the arbitration;

- Due to the fact that EGAS had to respond to two claimants - whose claims, significantly overlapped - EGAS was given more time to present its reply submissions157;

- The amount of time to be given to each party was agreed upon by the Parties and the Tribunal in telephone conferences and recorded in Procedural Orders issued in advance;

- Despite the schedules agreed upon and reflected in the Procedural Orders, EGAS was granted significant extensions158; and

- EGAS’ claim that it should have been granted twice as much time as EMG or IEC is totally unfounded, because EGAS was not faced with two distinct claims: in fact, there is significant overlap between the merits claims of EMG and IEC.

B. Time granted during the First Hearing

118.
In view of the fact that EGAS was, in essence, responding to claims from two claimants, the Tribunal accepted EGAS’ request that during the First Hearing it be allocated more time than the counterparties. The Tribunal decided to grant EGAS 40% of the available time, and IEC and EMG had to share the remaining 60% in equal portions of 30%159. The Tribunal reasoned its decision as follows160:

"In deciding the proportion of time allocated to each party the Tribunal sides with Respondents 1 and 2 and accepts that their extraordinary position, facing significant claims and counterclaims, requires that they be awarded more time than their counterparties. The Tribunal disagrees however, that the proportion of time be 50% for Respondents 1 and 2 and the remaining 50% to be split between Claimant and Respondent 3. A large part of Respondents 1 and 2’s defence, regarding admissibility and merits, is identical, irrespective of whether it is the Claimant or Respondent 3 who is pressing the claim. Bearing in mind this overlap, the Tribunal finds that a fair solution is that Respondents 1 and 2 are granted 40% of the time while the rest is split equally between Claimant and Respondent 3".

119.
As it turned out, during the First Hearing EGAS used more time than that initially allocated to it, which was possible because the Tribunal decided to sit longer hours and IEC assigned part of its time to EGAS.
120.
The Tribunal also set forth the principle that each Party was free to allocate its time for opening statements, direct examination cross-examination, as it best saw fit161:

"Subject to the Tribunal’s directions, each party is free to use its allocation of time for opening statements, direct examination, cross-examining and re-examining witnesses or any other intervention".

121.
At the end of each session, the Administrative Secretary regularly informed the Parties of the detail of the time used by each of them. Below is a table which reflects the time (in minutes) used by each party in the examination of witnesses and experts162:
EMGIECEGAS
Mr. Hamdy 30 - 82
Mr. Al Saaka 17 5 13
Mr. Ronai 1 1 25
Mr. Brokman 3 28 131
Ms. Nudelman - 15 52
Mr. Amit - 1 17
Mr. Freeny 59 43 91
Mr. Schrader 25 - 61
Mr. Eiland - 54 75
Mr. Cook 10 26 36
Mr. Pelham 151 181 71
FTI 70 - 162
NERA - 99 95
JWC 182 101 123
TOTAL 548 554 1034
%25,7%25,9%48,4%
122.
EGAS now claims that its due process rights were infringed because:

- It was not attributed half of the available time for examination : in fact, it was allocated almost 50% of the available time.

- It was forced to examine witnesses it did not call163: each party was free to use the time allocated to it as it deemed appropriate; if EGAS decided to cross-examine witnesses that it had not initially wished to call, that was EGAS’ decision - no party was coerced to conduct examinations.

- IEC could perform a direct examination of its quantum expert in two hours, while EGAS’ quantum experts were restricted to 30 minutes direct presentation : the table reproduced supra shows that actually, IEC’s expert (NERA) was subject to 99 minutes of examination by IEC164, while EGAS’ experts (JWC) were subject to 123 minutes of examination by EGAS165; in any case, it was ultimately EGAS’ decision how to allocate the available time.

- EMG and IEC were able to make a second direct examination on each other’s witnesses to support their common position166: In fact EGAS was granted as many rounds of examination as it wished; the Tribunal did not dismiss any witness unless it was satisfied that none of the Parties wished to put any additional question to the witness.

C. Document production and submission of evidence

123.
EGAS submits that the Tribunal treated it unfairly when it decided on document production requests and on the organisation of the submission of evidence:

- EGAS was denied access to information relating to the On-Sale Agreement - especially with respect to the gas flow between IEC and EMG - and to the UCOD and OPED models167: IEC did produce the On-Sale Agreement168 and information on the gas flows169. As regards UCOD and OPED, both are optimisation programs and the former was used by IEC to calculate a part of the damages sought in this arbitration; due to its intrinsic characteristics, EGAS could not be given full access to the programs and the Tribunal has decided in this Award to disregard the calculations made by IEC based on UCOD precisely because EGAS could not verify the underlying assumptions.

- EGAS was ordered to produce documents while preparing its written submissions and seeking to respond to new submissions and expert evidence filed by EMG and IEC170: EMG, IEC and EGAS filed approximately 80, 70 and 110 communications, respectively; it is almost inevitable that some were drafted in parallel to major submissions and this risk has affected all Parties equally. As regards the specific allegation that EGAS was ordered to produce documents while preparing its Second Submission on Merits, the Tribunal redirects to the exchange of communications that took place from 26 July 2013 through 6 January 2014171. According to EGAS, it was unable to meet the originally granted deadline for the production of documents due to the political situation in Egypt at that time - an event outside of the Parties’ control172. The Tribunal encouraged all Parties to cooperate173 and urged EMG and IEC to prioritise the documents that were most essential for the preparation of its Second Submission (which was due by 20 September 2013)174 while the rest of the ordered documents would be produced on a "rolling basis" as the situation in Egypt regained normality175.

- EMG and IEC were allowed to submit new expert evidence at a stage in which it was impossible for EGAS to deal with it176: EGAS is referring to two expert reports attached to the Supplemental Submissions of 15 November 2013177. The Supplemental Submissions were required because EGAS could not meet the deadline for the production of documents and most of the documents were handed to IEC and EMG after the presentation of the Second Submissions; the Supplemental Submission gave IEC and EMG the opportunity to comment and present counterevidence with respect to the documents produced by EGAS after the Second Submission had been presented. All three Parties were extensively heard before the Tribunal adopted a decision on this matter, and the admissibility of the two expert reports is duly motivated in the Tribunal’s decision A-39. The Tribunal notes that it also granted EGAS an extension to produce counter-evidence to respond to these reports178.

- EMG was allowed to call one of its security experts (Mr. Freeny) to the Hearing, despite the fact that no counterparty had called him, but EGAS was not given the opportunity to call his legal expert (Lord Hoffman) who was not called by any counterparty179 : there is no unfair treatment when the two situations compared are different in nature. EMG’s expert was not a legal expert, while EGAS’ was. This distinction is essential to the question whether the legal expert was allowed to be heard in the First Hearing, because, as the Tribunal argued in its decision A-44, it is standard practice in international arbitration that experts on applicable law are not required to support their statement with an oral testimony, and the Tribunal did not find a solid reason to deviate from that standard practice.

- Respondents 1 and 2 aver that the Tribunal prejudged or ignored unresolved issues raised by Respondents 1 and 2, by anticipating the date in which the draft of the award would be sent to the ICC before hearing the Parties on several outstanding issues180 : this allegation became moot in light of the Tribunal’s decision A 73 in which it granted the Parties further opportunities to present their arguments on the remaining issues to be decided by the Tribunal.

124.
In conclusion, EGAS has not made out a case that its due process rights were violated.

IV. SUMMARY OF THE FACTS OF THE CASE

125.
This is a complex arbitration, affecting the production, transport and sale of a strategic asset - natural gas - between two States in one of the most troubled parts of the world. The purpose of the GSPA, the On-Sale Agreement and the Tripartite Agreement, the three "Contracts" which underlie this arbitration, was the export by EGPC and EGAS of a significant quantity of Egyptian gas to Israel, using the so called "Peace Pipeline" (the "EMG Pipeline") built and operated by EMG. IEC, the State owned utility which produces approximately 40% of the Israeli electricity demand, was to purchase 1/3 of the gas, the remaining 2/3 going to other Israeli purchasers. The total expected gas sales amounted to 7.0 BCM or almost 258 Million MMBTU per year, an amount which covered a substantial part of Israel’s energy needs.
126.
The dispute arose because three years after construction of the EMG Pipeline and commencement of deliveries, the gas supply was severely disrupted by terrorist attacks and eventually the GSPA and the Tripartite Agreement were terminated, leaving EMG with an idle pipeline, in which it had invested approximately USD 500 Million181, and forcing IEC to purchase alternative fuels to meet Israel’s electricity demand.
127.
IEC and EMG are claiming damages against EGPC and EGAS in a total amount close to USD 6 Billion.

1. The Parties and the Contracts

128.
The dispute involves three Parties:

- Respondents 1 and 2, the State-owned Egyptian companies entrusted with the production, distribution and sale of petroleum and natural gas - EGPC and EGAS (which, for convenience will frequently be referred to simply as "EGAS" or as the "Seller");

- Claimant, EMG, an Egyptian company with Egyptian, Israeli and American shareholders, that had constructed and was operating an underwater gas pipeline, linking Egypt and Israel, and who was buying the gas from EGAS, transporting it via the EMG Pipeline and reselling it in Israel (which will also be referred to as the "Buyer"); and

- Respondent 3, the principal final buyer of the gas, IEC, the Israeli State-owned electricity company, which used it for producing electricity.

129.
The Parties are linked through the Contracts, which can be traced back to the 1979 Peace Treaty between Egypt and Israel, and which were concluded in a short period of time between June and August 2005182:

- The gas sellers (EGPC and EGAS) and the intermediary (EMG) are bound by the "GSPA", the upstream supply agreement;

- The intermediary (EMG) and the Israeli customer (IEC) executed an "On-Sale Agreement", for the downstream supply of gas;

- All three are Parties signed an overarching "Tripartite Agreement".

130.
This Tribunal has been constituted pursuant to the arbitration clauses contained in the Tripartite Agreement and in the GSPA.

1.1 The MoU and the "gas for peace deal"

131.
In addition to the execution of the three Contracts between EGAS, EMG and IEC, on 30 June 2005 the States of Egypt and Israel signed an inter-State Memorandum of Understanding [the "MoU"], formalising their understanding that significant quantities of Egyptian gas were to be exported to Israel via EMG’s Peace Pipeline. The 1979 Peace Treaty between the two countries had already established that the supply of natural gas from Egypt to Israel would contribute to enhancing peace and stability in the Middle East.
132.
The road map set out in the MoU was as follows:

- The MoU, although signed by the States, designated EGPC as the company responsible for exporting the gas.

- Egypt would sell gas to an intermediary exporter, EMG.

- The transmission of gas would take place through a Pipeline between Al Arish and Ashkelon.

- IEC was identified as the anchor customer, but the MoU "welcome[d] contracts between EMG and [other] Israel companies".

- Egypt guaranteed the supply of gas contracted or to be contracted in an amount of up to 7 BCM per year.

- A Tripartite Agreement would be signed between the Egyptian Government (through EGPC and EGAS), EMG and IEC, in which the Egyptian Government would guarantee the gas supply.

- Once other Israeli customers were identified, similar tripartite agreements would be concluded between the Egyptian Government, EMG and the final buyers.

133.
The MoU was not only executed by the duly authorised representatives of Egypt and Israel, it was also attached to the GSPA as Schedule 5. And, in accordance with Art. 1.1 of the GSPA, all Schedules form an integral part of the GSPA and are incorporated by reference.

1.2 GSPA

134.
A few days before, on 13 June 2005 EGAS and EMG had already entered into the Gas Supply and Purchase Agreement to which the MoU refers. The GSPA is a carefully drafted, lengthy contract comprising 13 articles, six schedules and six annexes, and subject to English law. All schedules and annexes form an integral part of the GSPA183. The crucial annex is Annex 1, which contains the General Terms and Conditions. The GSPA also incorporates the MoU as Schedule 5 and the Tripartite Agreement as Schedule 6.
135.
The GSPA was amended for the first time on 31 May 2009, less than a year after commencement of commercial deliveries [the "First Amendment"]184. Simultaneously, EMG and EGAS signed a letter agreement185 [the "Release of Claims"], agreeing to a reciprocal release of claims for any liability for breach of the GSPA which might have occurred before the First Amendment186.

Object

136.
The object of the GSPA is the purchase and sale of gas, to be delivered at Al-Arish, Egypt (Art. 2). The quantity of gas is defined as up to 7.0 BCM per year (Art. 5), and the price is to be determined according to the pricing provision and formula of Annex 5. EMG had to anticipate the daily nomination of gas under a take or pay regime. If EGAS did not deliver part or all of the properly nominated gas, it was liable for shortfall compensation [the "Shortfall Compensation"].
137.
As a consequence of the First Amendment, the gas price was raised and the maximum quantity of gas to which EMG was entitled was divided into three delivery quantities (Q1, Q2 and Q3), priced differently187. "Q1" represents the quantity of gas that was needed to supply IEC.
138.
The First Amendment acknowledged that late deliveries of Q2 and Q3 volumes had occurred and that such delay had to be compensated by the additional delivery of the so called "Recovery Gas".

Force majeure

139.
The GSPA provides for a force majeure regime under which neither party would be held liable for any delay or failure in performance due to force majeure (Annex 1, Art. 16.1).

Dispute resolution

140.
The GSPA provides that disputes will be subject to arbitration.
141.
The general rule is that disputes will be subject to an arbitration with its seat in Cairo before the CRCICA (Annex 1 Art. 14.2). The GSPA however provides for an exception, Art. 14.9 of Annex 1, which incorporates by reference the dispute resolution mechanisms of an On-Sale Agreement, subject to certain requirements. Art. 14.9 is one of the sources, which EMG claims afford jurisdiction to this Tribunal (alternatively, it also claims jurisdiction under the Tripartite Agreement).

1.3 Tripartite Agreement

142.
On 13 June 2005188 all three Parties to this arbitration concluded a Tripartite Agreement in which EGAS guarantee the supply of up to 2.2 BCM annually of gas to IEC, through fulfilling their obligations to EMG under the GSPA (called Source Contract in the Tripartite Agreement).
143.
The Tripartite Agreement, which is governed by English law, includes an arbitration clause providing for ICC arbitration, with a seat in Geneva (which is one of the two alternative arbitration clauses invoked by EMG for its claim against EGAS and the only arbitration clause invoked by IEC for its counterclaim against EGAS).
144.
The penultimate Recital of the GSPA includes a specific reference to the Tripartite Agreement, acknowledging that189

"in such Tripartite Agreement EGPC and EGAS guarantee the commencement and continuous supply of Gas to IEC through fulfilling their obligations to EMG under [the GSPA]".

145.
Furthermore, the Tripartite Agreement was attached to the GSPA as Schedule 6 and Art. 1.1 of the GSPA specifically provides that all Annexes "form an integral part hereof and are hereby incorporated by reference herein".
146.
Art. 7 of the MoU stated that multiple tripartite agreements would be signed; one for each on-sale customer. Eventually, seven additional on-sale customers were identified. EMG wrote to EGAS requesting that individual tripartite agreements with each new customer be executed190. EMG alleges that EGAS refused to sign such tripartite agreements, despite the commitment set out in the MoU191. There is no evidence that any additional tripartite agreement was ever signed.

1.4 On-Sale Agreement

147.
On 8 August 2005 EMG as seller, and IEC as buyer concluded a gas sale and purchase agreement192. This contract has been referred to in this arbitration as the ‘EMG GSPA’, the ‘Downstream Contract’, or the ‘On-Sale Agreement’. The Tribunal prefers to refer to this contract as the "On-Sale Agreement".
148.
Under the On-Sale Agreement, EMG agreed to the supply to IEC of an annual contract quantity of 1.2 BCM for the first year193, which could be augmented by 25%194.
149.
The On-Sale Agreement was modified on several occasions. To the matters disputed in this arbitration, however, only the "Fifth Amendment" executed on 17 September 2009195 becomes relevant196. The Fifth Amendment raised annual maximum gas supply to 2,125 BCM, permitted IEC to nominate additional gas quantities per day197 and established that any shortfall in EMG’s deliveries was to be added to IEC’s entitlement for the following month198.
150.
The dispute resolution clause of the On-Sale Agreement provides for an ICC arbitration, with its seat in Geneva199. The governing law is English law200.

Other on-sale agreements

151.
Evidence contained in the file proves the existence of the following customers of EMG, each of which should have signed an on-sale agreement with EMG201:

- Mashav Initiating and Development Ltd. ["Mashav"]

- Haifa Chemicals South Limited

- Agan Chemicals Manufactures Ltd.

- Oil Refineries Limited

- Dorad Energy Limited202

- Negev Natural Gas Marketing203 plus

- O.P.C. Rotem Ltd204

- DSW Works Industries205

- DSW Works Limited206

- IC Power Israel207

2. The Pipeline

152.
The Arab Gas Pipeline ["AGP"], but which often will simply be referred to as the "Pipeline" is a natural gas pipeline in the Middle East, which exports Egyptian natural gas to Jordan, Syria and Lebanon (and, through the underwater branch built and owned by EMG, to Israel). The AGP receives gas from a natural gas complex in Damietta, which is located 60 km west of Port Said, and it has a 10 BCM annual capacity208. The first section of the AGP is approximately 192 km long, begins in Damietta and ends in Al-Arish209, the capital and largest city of the North Sinai Peninsula. This section of the AGP is also called the Trans Sinai Pipeline (because it crosses the Sinai desert) or the feeder line. Most of the disputes to be adjudicated in this arbitration are related to this section of the AGP.
153.
The AGP has two major off-takes: in southern Al-Arish it connects to a branch which heads to the Red Sea and in the east of Al-Arish it connects to the EMG Pipeline, which crosses underwater to Ashkelon in Israel. In addition, there are other off-takes to feed a number of recipients, including cement factories and power stations located in the vicinity of the Pipeline, plus the Al-Arish Township210.
154.
The AGP is State-owned, and operated by an EGAS subsidiary, the Egyptian Natural Gas Company ["GASCO"]211.

EMG’s pipeline

155.
As soon as the GSPA and the On-Sale Agreement were concluded, EMG started the construction of the Al-Arish - Ashkelon branch of the AGP, the so-called EMG Pipeline, which was to export Egyptian gas to Israel through a 100 km submarine duct. EMG’s facilities are located in Sheikh Zuwaid district212.
156.
EMG’s pipeline is owned by EMG, operated by a separate Egyptian company, KTISTAR, and was partly financed through a USD 340 Million loan from the National Bank of Egypt. The investment amounted to USD 500 Million approximately213.

3. Chronology of main events

Early years

157.
The MoU and the Contracts were executed in 2005, at the time when President Mubarak was in power in Egypt.
158.
The construction of the EMG Pipeline was finalised some three years thereafter, and on 15 June 2008 commercial operations were commenced214. Although gas deliveries started, the quantities actually made available by EGAS to EMG were consistently less than the quantities agreed in the GSPA. Negotiations ensued and led to the execution on 31 May 2009 of the First Amendment and the Release of Claims. This settlement proved, however, to be only a temporary solution, because soon thereafter renewed shortfalls occurred: in November 2010 EGAS acknowledged that since the signature of the First Amendment, it had incurred in a 15% shortfall215.

Egyptian revolution

159.
At the beginning of 2011, the third year of performance of the GSPA, an unexpected event shook the Middle East: the revolutionary movement which was to be known as the "Arab Spring". By the end of January 2011 the Mubarak regime was toppled, and a period of confusion and violence ensued. In North Sinai, the region crossed by the Pipeline, local insurgents took advantage of the power vacuum.
160.
As early as 5 February 2011 the Pipeline suffered a terrorist attack; the first in a chain of 13. The first six attacks targeted the facilities of the Pipeline, such as traps and off-take rooms, which are above ground and easily vulnerable; the next seven attacks targeted segments of the buried duct. The Parties discuss whether these attacks qualify as force majeure events or whether this excuse is unavailable because EGAS failed to act as a reasonable and prudent pipeline operator in its efforts to protect and secure the Pipeline and its facilities.
161.
As a result of these attacks, gas supply suffered significant disruptions during 2011 and the first quarter of 2012. In fact, the total amount of gas delivered was 26 Million MMBTU in 2011 and only 2 Million MMBTU in 2012 (January - March)216 - the annually contracted Q1 gas, i.e. the gas allocated to IEC only, was 78 Million MMBTU217.

Lack of payment

162.
In the course of 2011 - in the midst of the alleged force majeure events - EMG fell behind in the payment of invoices due to EGAS for the gas delivered. The GSPA provides that the failure to pay invoices due for four consecutive months entitles EGAS to terminate the GSPA218. On 24 August 2011 EGAS delivered notice to EMG requesting that EMG cure its failure to pay the January through April 2011 invoices219. In January 2012 EMG was able to pay USD 12 Million to EGAS, which covered the January 2011 invoice.

Termination of the GSPA

163.
On 18 April 2012 EGAS formally terminated the GSPA220, claiming a total debt of USD 55 Million221.
164.
EMG reacted by claiming that EGAS’ purported termination was wrongful and that it amounted to a repudiation of the GSPA, which entitled EMG to treat the GSPA as discharged at common law. EMG did so on 9 May 2012222.

Repudiation of the Tripartite Agreement

165.
It is EMG’s and IEC’s common position that EGAS’ repudiation of the GSPA also implied a repudiation of the Tripartite Agreement. On 6 February 2013 IEC notified EGAS of its election to accept the repudiation of the Tripartite Agreement and to treat the Tripartite Agreement as discharged under English law223.
166.
Since March 2012 EGAS has not delivered any gas to EMG (and EMG has failed to deliver to IEC) and EMG’s pipeline has remained idle and seemed doomed to be scrapped.

Changes in the Middle Eastern gas market

167.
In the meantime, the Middle Eastern gas market has experienced dramatic changes, which have led to a turnover in the roles of exporting and importing countries: Egypt has suffered a steep decrease in the amount of gas available for export224, while Israel has discovered two significant new gas reserves: the Tamar and Leviathan fields, with production capabilities well in excess of Israel domestic requirements.
168.
The abundance of gas in Israel, its relative scarcity in Egypt, and the availability of a liquefaction plant in Damietta, which would permit the export of liquefied natural gas ["LNG"], has rekindled the interest in the EMG Pipeline. One of the alternatives discussed for the future is whether this Pipeline could be used in reverse flow, i.e. to permit export of gas from Israel to Egypt.

V. RELIEF SOUGHT

1. Claimant

169.
Claimant’s final prayer for relief - for jurisdictional and for merits issues - is summarised in its Post-Hearing Brief as follows:

"VI. REQUEST FOR RELIEF

178. The Claimant respectfully requests that the Tribunal:

(a) With respect to objections to the Tribunal’s jurisdiction and to the admissibility of the Claimant’s claims:

(i) DISMISS the First and Second Respondents’ objections to jurisdiction and admissibility in their entirety;

(ii) DECLARE that the Tribunal has jurisdiction over the Claimant’s Source GSPA claims pursuant to Article 14.9 of Annex 1 to the Source GSPA and Article 9 of the Tripartite Agreement;

(iii) DECLARE that the Tribunal has jurisdiction over the Claimant’s Tripartite Agreement claims under Article 9 of the Tripartite Agreement; and

(iv) DECLARE that the Claimant’s claims under the Source GSPA and the Tripartite Agreement are admissible.

(b) With respect to questions of liability:

(i) DECLARE that the First and Second Respondents breached their obligations under the Source GSPA;

(ii) DECLARE that the First and Second Respondents repudiated the Source GSPA, entitling the Claimant to accept that repudiation, terminate the Source GSPA, and claim full compensation under English law;

(iii) DECLARE that the First and Second Respondents breached the Tripartite Agreement; and

(iv) DECLARE that the First and Second Respondents repudiated the Tripartite Agreement, entitling the Claimant to accept that repudiation, terminate the Tripartite Agreement, and claim full compensation under English law;

(c) ORDER the First and Second Respondents to pay to the Claimant compensation of US$1,500.4 million as the principal sum due for breaches of the Source GSPA and the Tripartite Agreement and their repudiation of the Source GSPA and the Tripartite Agreement;

(d) AWARD the Claimant pre-judgment interest on all amounts payable from the relevant date of injury, as more specifically described in this pleading;

(e) DECLARE that the award of damages and interest is made net of applicable Egyptian taxes;

(f) ORDER the First and Second Respondents to indemnify the Claimant should Egypt impose tax on the Award;

(g) ORDER the First and Second Respondents to pay all of the costs and expenses of this arbitration, including the Claimant’s reasonable legal and expert fees, and the expenses of the Tribunal;

(h) AWARD the Claimant post-judgement interest on all amounts payable, as more specifically described in this pleading, until the award is paid in full; and

(i) AWARD the Claimant any other relief deemed appropriate by the Tribunal.

179. To the extent the Claimant is not fully compensated for its loss, the Claimant expressly reserves the right to seek additional or modified remedies in any other current or future arbitral proceedings, including (but not limited to) indemnification for any additional losses incurred towards third parties due to the First and Second Respondents’ breaches, and claims concerning the First Amendment to the Source GSPA".

2. Respondents 1 and 2

170.
In their Post-Hearing Brief, Respondents 1 and 2 request the Tribunal to:

"Request for Relief

370. In light of the foregoing, EGAS[225] respectfully reiterates its request that the Arbitral Tribunal:

1. Find and declare that it has no jurisdiction over the claims submitted by EMG or IEC in this arbitration;

2. Alternatively, to the extent the Arbitral Tribunal may find it has jurisdiction to hear any of the claims submitted in this arbitration, find and declare that such claims are inadmissible and/or premature and/or fail to state a cause of action and/or unfounded;

3. Order EMG and IEC to bear the costs of this arbitration in their entirety, including but not limited to compensation for all the arbitrators’ fees and expenses, administrative costs and legal fees, and all expenses incurred by EGAS in connection with the present dispute; and

4. Grant EGAS such further relief as the Arbitral Tribunal deems fit and proper".

3. Respondent 3

171.
In its Second Submission on Jurisdiction Respondent 3 captures the relief sought in relation to the jurisdiction of this Tribunal and admissibility of the claims as follows:

"Conclusion

98. By way of summary:

(1) For the reasons given in \IEC’s First Submission, article 9 of the Tripartite Agreement confers jurisdiction on the Tribunal to determine the dispute that has arisen between EGPC/EGAS, EMG and IEC as to whether there has been compliance, in particular, with article 1 of the Tripartite Agreement. EGPC/EGAS raises no arguments of construction of article 9 to the contrary.

(2) On the true construction of article 1 of the Tripartite Agreement, it amounts to a promise to EMG, as well as IEC. Consequently, EMG was entitled to commence this arbitration on the footing of a breach of article 1, enforceable by EMG, on the part of EGPC/EGAS. If it were necessary (which it is not), EMG had a cause of action under English law for breach of contract which arises out of or in connection with the Tripartite Agreement. At the very least, there is an arguable case to that effect which is more than sufficient to found the Tribunal's jurisdiction.

(3) In any event, a cause of action is not a prerequisite for the commencement of an arbitration under article 9. The requirement is that there should be a dispute between the parties to the Tripartite Agreement. There plainly is a dispute about whether EGPC/EGAS have performed their promise to continue the supply of gas to IEC through fulfilment of their obligations under the GSPA, which is a dispute that arises out of or in connection with article 1 of the Tripartite Agreement. It is a dispute between all the parties to the Tripartite Agreement, i.e. EGPC/EGAS, EMG and IEC, regardless of whether each of those parties has a cause of action for breach of contract or not. The dispute was validly raised by EMG's Request for Arbitration and, in any event, by IEC's Counterclaim.

(4) EGPC/EGAS's "condition precedent" argument on admissibility is without substance. There is, in particular, no need to await the outcome of bilateral arbitrations under the GSPA and On-Sale Agreement before a claim for breach of article 1 of the Tripartite Agreement can be heard by this Tribunal. The Tripartite Agreement contains no such precondition which would, in any event, be unworkable and unjust. It will be for this Tribunal to determine whether there has been compliance with article 1 and, if and insofar as this may require the Tribunal to have regard to the content of obligations created by the GSPA or On-Sale Agreement and to make findings about whether they have been performed, this Tribunal will be entitled and duty-bound to do so.

99. Accordingly, the Tribunal should hold that it has jurisdiction under article 9 of the Tripartite Agreement to determine the dispute raised in the Request and the Counterclaim and order EGPC/EGAS to bear all of the costs of and occasioned by the jurisdiction phase of this arbitration, including IEC's legal costs".

172.
And in its Post-Hearing Brief Respondent 3 consolidates its prayer for relief in relation to liability and quantum as follows:

"H PRAYER

294. IEC seeks the following relief from the Tribunal

(a) a declaration that EGAS/EGPC are in breach of Articles 1 and/or 2 of the Tripartite Agreement for the shortfalls in supply that IEC has suffered to date;

(b) a declaration that IEC has lawfully terminated the Tripartite Agreement on account of the continuing and repudiatory breaches by EGAS/EGPC of the Tripartite Agreement and/or breaches of the conditions of the Tripartite Agreement;

(c) an award of damages in IEC’s favour in the principal amount of US$3,566,479,895 in respect of additional fuel costs, or such other sum as the Tribunal finds appropriate;

(d) an award of damages in IEC’s favour in the principal amount of US$39,939,320 in respect of additional maintenance and associated costs;

(e) an award of damages in IEC’s favour in the principal amount of US$6,845,727 in respect of additional gasoil storage costs;

(f) an award of damages in IEC’s favour in the principal amount of US$211,225,376 in respect of LNG vessel charter costs;

(g) an award of damages in IEC’s favour for penalties for the cancellation of two LNG cargos in the principal amount of US$24,350,600;

(h) an award of damages in IEC’s favour for ship demurrage charges in the principal amount of US$445,000;

(i) an award in IEC’s favour for compound interest on the principal amount of US$2,601,612,903 (being IEC’s additional fuel costs for the historical period July 2008 through June 2013) in the amount of US$105,897,235;

(j) an award in IEC’s favour for compound interest on all other principal amounts (set out at sub-paragraphs (d) to (h) above, totalling US$282,806,023) in respect of losses already incurred as at 30 June 2013, in the amount of US$2,042,982;

(k) an award in IEC’s favour for compound interest on IEC’s total claim from 30 June 2013 to the date of any award, accruing at a daily rate of [US]$350,038, based on Bank Prime Loan Rate published by the US Federal Reserve Bank, or such other rate or on such other basis as may be fixed by the Tribunal;

(1) an award that EGAS/EGPC and/or EMG be liable in full for IEC’s costs of the arbitration, including the fees and expenses of the Tribunal, the ICC’s costs, IEC’s legal costs and expenses;

(m) an award in IEC’s favour for post-award interest at 8% per annum on any amount awarded to IEC, from the date of the award until payment, or at such rate or for such period as the Tribunal deems appropriate; and/or

(n) such other or further relief (whether against EGAS/EGPC or EMG) as the Tribunal may deem appropriate".

4. Modification of the reliefs sought

173.
EMG has in the course of the procedure modified the declaratory relief with respect to the Tripartite Agreement. At the beginning of the arbitration, in the Terms of Reference226, EMG requested the Tribunal to make four declarations with respect to the Tripartite Agreement:

"1. Respondents 1 and 2 breached the Tripartite Agreement;

2. Respondents 1 and 2, and not the Claimant, are liable to Respondent 3 for any damages resulting from their failure to deliver contractual quantities of gas to the Claimant;

3. Respondents 1 and 2, and not the Claimant, are liable to Respondent 3 for any damages resulting from Respondents 1 and 2’s repudiation of the GSPA; and

4. the Claimant is not liable to Respondent 3 for any damages resulting from Respondents 1 and 2’s breaches of GSPA and the Tripartite Agreement".

174.
The Tribunal notes that in its Post-Hearing Brief the only declaratory relief which is still being sought by Claimant is a simple declaration that Respondents 1 and 2 breached the Tripartite Agreement (see para. 178.(b.)(iii) of its Post-Hearing Brief, which is consistent with the prayers for relief sought in all previous submissions on merits). The Tribunal finds that EMG has tacitly abandoned the three additional declaratory prayers for relief (nos. 2, 3 and 4) originally formulated in the Terms of Reference.
175.
IEC’s prayer for relief has also undergone modifications. In the Terms of Reference IEC included a conditional claim against EMG227:

"In relation to the Claimant, insofar as the Claimant may be found to have breached Art. 5 of the Tripartite Agreement prior to the termination of the GSPA and/or in such a way as to justify Respondents 1 and 2’s purported termination of the GSPA or in any other way, Respondent 3 requests that the Arbitral Tribunal award Respondent 3 compensation and interest on the basis set out above".

176.
In its First Submission, IEC continued to reserve its position in relation to any alleged breach of Art. 5228. But during the First Hearing, Mr. Ronai, one of IEC’s representatives, answering a direct question from the Tribunal, stated that IEC was not bringing any claim against EMG229. And in its Post-Hearing Brief there is no prayer for relief directed against EMG. The Tribunal understands that IEC’s reservation of rights to claim against EMG has not been exercised and the Tribunal will therefore not address the issue of a possible breach of Art. 5 of the Tripartite Agreement.

VI. GENERAL OVERVIEW

1. The Parties’ claims

1.1 EMG’s CLAIMS

177.
EMG is the Claimant in this procedure; it is submitting claims against EGPC and EGAS based on the allegation that it breached the supply obligations under the GSPA and under the Tripartite Agreement, and then wrongfully repudiated not only the GSPA but also the Tripartite Agreement. A significant initial hurdle for EMG’s claims is the jurisdiction of the Tribunal:

- For the breaches affecting the GSPA, EMG invokes jurisdiction derived from the arbitration clause contained in Art. 14.9 of Annex 1 to the GSPA, and alternatively, from Art. 9 of the Tripartite Agreement; and

- For the claims deriving from the Tripartite Agreement, the alleged jurisdictional basis is Art. 9 of that agreement.

1.2 IEC’s Claims

178.
IEC, Respondent 3, was called into this procedure as a respondent vis-à-vis EMG’s initial request for declaratory relief (which EMG later abandoned).
179.
IEC has used the present arbitration, initiated by EMG, to submit a counterclaim against the other Respondents, EGPC and EGAS, alleging that they have breached Art. 1 and/or 2 of the Tripartite Agreement for the shortfalls in supply, entitling IEC to lawfully terminate the Tripartite Agreement on account of the continuing and repudiatory breaches by EGAS of its conditions. The jurisdictional basis for this counterclaim is, again, Art. 9 of the Tripartite Agreement.

1.3 EGAS’ DEFENCE

180.
Respondents 1 and 2, which for reasons of convenience are frequently referred to simply as EGAS, in fact not only rejects having breached or having wrongfully repudiated either the GSPA or the Tripartite Agreement, but it also:

- objects to the Tribunal’s jurisdiction over EMG’s claims, submitting two "Jurisdictional Objections" denying that the Tribunal has jurisdiction to adjudicate EMG’s claims against EGAS; and

- avers that the GSPA is void and not enforceable having been procured and executed by corruption [the "Enforceability Objection"].

181.
EGAS has reacted against IEC’s claims submitting:

- three "Admissibility Objections", arguing that these claims are inadmissible and/or premature and/or fail to state a cause of action;

- and alternatively that all claims be dismissed as unfounded; mainly because delivery failures were due to force majeure events, and thus, excused.

2. Overview of the Award

2.1 Preliminary objections

182.
In the next Chapter the Tribunal will analyse the Jurisdictional and Admissibility Objections, and come to the conclusion:

- that it lacks jurisdiction under Art. 14.9 of Annex 1 of the GSPA, but that it does benefit from jurisdiction under Art. 9 of the Tripartite Agreement; and

- that EGAS’ Admissibility Objections must be dismissed.

183.
Having come to the conclusion that the Tribunal has jurisdiction to settle disputes between the three Parties arising from the Tripartite Agreement, the Tribunal then will establish the scope of rights granted by the Tripartite Agreement in favour of IEC and EGAS:

- As regards the relationship between EMG and EGAS, the Tribunal will conclude that EGAS’ obligation to deliver gas to EMG under the GSPA is reititerated, as a repeat obligation in Arts. 1 and 2 of the Tripartite Agreement, and any dispute relating to that obligation can be adjudicated by a tribunal formed under Art. 9 of the Tripartite Agreement (as the present Tribunal is), provided that IEC is also a party to such dispute (as required by Art. 14.10 GSPA), that an annual amount of gas not to exceed 2.2 BCM is delivered to EMG in compliance with the GSPA, for redelivery to IEC under the On-Sale Agreement.

- As regards the relationship between IEC and EGAS, the conclusion will be that Art. 1 of the Tripartite Agreement also affords IEC a freestanding enforceable right for delivery of gas vis-à-vis EGAS up to the same annual maximum quantity, for delivery under the GSPA and re-delivery under the On-Sale Agreement.

184.
EGAS also denies the enforceability of the GSPA, averring that the GSPA is void and unenforceable because it is tainted by bribery and profiteering - two crimes allegedly committed in Egypt. This is an extremely serious allegation, which the Tribunal will study in detail in Chapter VIII, reaching the conclusion that EGAS has failed to make out its contention of corruption.

2.2 The merits

185.
Having rejected the Jurisdictional, Admissibility and Enforceability Objections, the Tribunal is in a position to delve into the merits of the different disputes.

A. Force majeure defence

186.
Before analysing whether EGAS breached the Tripartite Agreement, as claimed by EMG and IEC, it will prove necessary to address a further preliminary defence advanced by EGAS: that even if EGAS had failed to deliver gas as it was bound to do under the Tripartite Agreement, such failure was excused by a general force majeure situation. President Mubarak was toppled in January 2011 by a popular uprising, Sinai’s Bedouin population rebelled, Egypt’s State police abandoned the area, a security vacuum resulted, and 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.
187.
The Tribunal’s analysis will centre on whether two requirements for the availability of the force majeure defence have been met:

- the requirement that EGAS act as a Reasonable and Prudent Piepline Operator ["RPPO"]; and

- the additional consequence that the attacks could have been mitigated or prevented, had EGAS acted as a RPPO [the "Avoidance Requirement"].

188.
The Tribunal will conclude that EGAS has not proven that it acted as a RPPO in preventing and mitigating the effects of the attacks, and that there is sufficient circumstantial evidence to affirm that, had EGAS implemented the security measures which a RPPO should have adopted, the attacks on the facilities and on the Pipeline could have been prevented or at least significantly mitigated.
189.
The Tribunal will then be in a position to analyse EMG’s and IEC’s claims, requiring in essence that the Tribunal adjudicate the same two distinct issues:

- the first is a declaration that EGAS has repudiated the Tripartite Agreement, as a consequence of its wrongful termination of the GSPA [the "Tripartite Repudiatory Breach"]; and

- the second that EGAS breached its delivery obligations under the Tripartite Agreement [the "Tripartite Delivery Breaches"].

B. The Tripartite Repudiatory Breach

190.
On 18 April 2012 EGAS decided to terminate the GSPA, the 15 year gas supply agreement between Egypt and Israel, invoking as a formal cause for termination that EMG had for four consecutive months (January - April 2011) failed to pay

the invoices due for the delivery of gas (in an amount of USD 23 Million). It is worth noting that EGAS failed to put IEC on notice of the potential termination of the GSPA.