Ampal-American Israel Corporation and others v. Arab Republic of Egypt
ICSID · Investment (ICSID and treaty) · Egypt · 21 Feb 2017
Why it matters
This case is a landmark for its detailed analysis of attribution of state-owned entities' acts, the interplay between parallel ICC and ICSID proceedings, and the application of full protection and security in the context of repeated terrorist attacks on a pipeline. It also clarifies the standard for indirect expropriation through revocation of tax exemptions and termination of a gas supply agreement.
Summary
The case arises from a long-term gas supply agreement between Egypt and an Israeli-Egyptian joint venture (EMG). Claimants, US-Israeli investors, alleged that Egypt expropriated their investment by revoking EMG's tax exemption, coercing a contract amendment, failing to protect the pipeline from attacks, and wrongfully terminating the gas supply agreement. The Tribunal found that Egypt's revocation of the tax license (Law 114/2008) was an unlawful expropriation of the Claimants' property interest in the license, but only up to 2025. It rejected the coercion claim. Regarding delivery failures, the Tribunal held that Egypt breached the full protection and security standard only from the fifth pipeline attack (12 July 2011) onwards, as earlier attacks did not show state failure. The termination of the gas supply agreement by EGPC/EGAS (attributable to Egypt) was also an unlawful expropriation. The Tribunal reserved quantum for a later phase.
The detail
Parties: Ampal-American Israel Corporation and others v. Arab Republic of Egypt
Case number: ICSID Case No. ARB/12/11
Outcome: Tribunal found Egypt liable for unlawful expropriation of tax license and investment, and breach of full protection and security; quantum to be determined later.
Applicable law: Treaty of Peace between Israel and Egypt (1979), US-Israel BIT (via MFN), ICSID Convention, UNCITRAL Rules
Issues in play: Expropriation under Article III(1) of the Treaty vs. Egypt's sovereign right to regulate; full protection and security under Article II(4) vs. Egypt's duty to protect pipeline from attacks.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.