Summary

International Court of Arbitration of the International Chamber of Commerce Case No. 18215/GZ/MHM

FINAL AWARD

ARBITRAL TRIBUNAL
Juan Fernández-Armesto (President)
John Marrin QC (Co-arbitrator)
Osman Berat Gürzumar (Co-arbitrator)

TABLE OF CONTENTS

PERSONS INVOLVED IN THE ARBITRATION
1. The Parties
1.1 Claimant
1.2 Respondents 1 and 2
1.3 Respondent 3
2. The Arbitral Tribunal
3. The ICC Secretariat
4. The Administrative Secretary
II. PROCEDURAL HISTORY
1. The arbitration clause
2. Seat of arbitration, language and applicable law
3. The commencement of the arbitration
4. P0 1 and the Terms of Reference
5. P02
6. First Submissions Jurisdiction and P0 3
7. PO4
8. Second Submission Jurisdiction and P0 5 and 6
9. First Submnission Merits and P0 7
10. Documnent production and P0 8
11. Second Submnission Merits and Supplemnental Submnissions
12. P09
13. P0 10 and Hearing
14. P0 11: PHB, Second Hearing and costs
15. Post -hearing incidents
15.1 Reverse Flow incident
15.2 The alleged forgery and exclusion of witness statements
16. Sumnmnary of the evidence
17. Advance on costs
18. Closing of the proceeding, time period for the issuance of the award
III. ALLEGED VIOLATIONS OF DUE PROCESS RIGHTS
1. The Parties' positions
2. The Tribunal's view
2.1 Applicable rules
A. ICC Rules
B. IBA Rules
C. Swiss Law
2.2 EGAS' allegations of violation of due process
A. A ccise against two co-claimants
B. Time granted during the First Hearing
C. Document production and submission otevidlence
IV. SUMMARY OF THE FACTS OF THE CASE
1. The Parties and the Contracts
1.1 The MoU and the "gas for peace deal"
1.2 GSPA
1.3 Tripartite Agreement
1.4 On -Sale Agreement
2. The Pipeline
3. Chronology of main events
V. RELIEF SOUGHT
1. Claimant
2. Respondents 1 and 2
3. Respondent 3
4. Modification of the reliefs sought
VI. GENERAL OVERVIEW
1. The Parties' claims
1.1 EMG's claims
1.2 IEC's Claims
1.3 EGAS' defence
2. Overview of the Award
2.1 Preliminary objections
2.2 The merits
A. Force majeure defence
B. The Tripartite Repudiatory Breach
C. The Tripartite Delivery Breaches
2.3 Quantum
A. EMG's compensation
B. JEC's compensation
VII. JURISDICTION AND ADMISSIBILITY
1. The dispute resolution mechanisms
2. The parallel arbitration procedures
3. The Parties' positions
3.1 Jurisdiction under Art. 14.9 of Annex ito the GSPA
A. Claimant's position
a. Claimant's interpretation 86
b. Validity and enforceability of Art. 14.9
c. Compliance with all requirements
B. Respondents] and 2's position
a. Respondents 1 and 2's interpretation of Art. 14.9
b. Art. 14.9'srequirementswerenotmet
3.2 Jurisdiction under the Tripartite Agreement
A. Claimant's position
a. Comprehensive arbitration clause
b. Diversity of arbitration clauses
c. EMG has rights under the Tripartite Agreement
d. Third party beneficiary
B. Respondents] and 2's position
a. EMG's claims arise solely out of the GSPA
b. The Tripartite Agreement creates no rights in favour of EMG
c. Two contracts
d. GSPA Claims not subject to a Tripartite Agreement arbitration
e. Opinion of Ms. Geraldine Andrews
3.3 Admissibility of claims under the Tripartite Agreement
A. Respondents] and 2's position
a. No enforceable rights
b. Breach of fundamental rights
c. Prematurity
d. No breach of the Tripartite Agreement
B. Respondent 3's position
a. Enforceable rights
b. Mature claim
c. Valid claim
C. Claimant's position
4. The Tribunal's decision on the jurisdictional objection
4.1 Jurisdiction for GSPA Claims
A. Jurisdiction under Art. 14.9 ofAnnex 1 to the GSPA
a. The constructions proposed by EMG and EGAS
b. The preferred construction
c. Allegations of breach of due process
B. Jurisdiction under the Tripartite Agreement
4.2 Jurisdiction for Tripartite Agreement Claims
A. The literal interpretation of Art. 1
a. Meaning of "guarantee
b. The beneficiary of the guarantee/promise
B. The purpose of Art.1
a. The commercial sense of repeat obligations
b. EMG's alleged lack of interest
C. The contractual context
a. Recitals
b. Art. 5 of the Tripartite Agreement
c. Art. 14.10 of Annex 1 to the GSPA
D. Scope of EGAS' repeat obligation and available defences
a. Scope of repeat obligation
b. Defences available to EGAS
5. The Tribunal's decision on the Admissibility Objections
5.1 Prematurity of Tripartite Agreement Claims
5.2 Lack of consideration
5.3 Alleged violation of due process rights
6. Conclusion
7. Impact on EMG's request for relief
7.1 Jurisdiction and admissibility
7.2 Liability
7.3 Quantum
VIII. CORRUPTION
1. The facts
1.1 EMG
1.2 The genesis of the GSPA
1.3 The court proceedings
A. The administrative court proceedings
B. The criminal court proceedings
a. Proceedings against Messrs. Fahmy and Tawila
b. Proceedings against Mr. Mubarak
2. The Parties' position
2.1 EGAS' position
A. Additional facts
B. EMG's burden of proof
C. Unlawfulness under Egyptian law
a. EGPC's Commercial Activity Regulation
b. Egyptian Criminal Code
D. Unenforceability under English law
2.2 Claimant's position
A. Burden of proof on EGAS
B. No illegality
a. EGPC's Commercial Activity Regulation
b. Egyptian Criminal Code
C. English law
2.3 IEC's position
A. Burden of proof and evidence of corruption
B. English conflict of laws and the Ralli Bros case
C. No illegal acts
a. EGPC's Commercial Activity Regulation
b. Egyptian Criminal Code
3. The Tribunal's decision
3.1 Applicable law
3.2 Burden and standard of proof
3.3 Evidence on the alleged corruption
A. The direct selection of EMG
B. Mr. Fahmy's alleged profIteering
C. Mr. Tawila's alleged bribery
IX. FORCE MAJEURE
Introduction
2. EGAS' position
2.1 Arguments
A. Occurrence of a force majeure event that impeded gas supply
B. Requirements for force majeure remedy
a. Acting as a RPPO
b. Notice
C. Acceptance offorce majeure
D. Alleged godsend
2.2 Evidence
A. Expert evidence
B. Documents
3. EMG's position
3.1 Arguments
A. Burden of proof
B. Failure to properly secure the Pipeline
C. Failure to report
D. Failure to repair
3.2 Evidence
A. Expert reports
a. Pipeline security
b. Pipeline repairs
c. Force majeure reporting
B. Documents
a. Exhibits to the submissions
b. Annexes to the reports
C. Witness statement
4. IEC's position
4.1 Arguments
A. Contractual requirements
a. Reasonable and prudent person
b. Reporting
B. Burden of proof and evidence
C. EGAS'failure to act as aRPPO
a. Security
b. Repairs
D. Inadequate reporting
E. Alleged acceptance offorce majeure
4.2 Evidence
A. Expert reports
a. Expert on Middle East conflicts
b. Expert on pipeline security
c. Expert on security in Sinai
B. Documents
5. Facts
5.1 The construction of the Pipeline
5.2 Operation of the Pipeline up to the Revolution
5.3 Attacks after the Revolution
A. Attacks on facilities
a. Attack no. 1 (and 2) (February - March 2011)
b. Subsequent attacks and reactions
B. Attacks on pipe
a. Operation Eagle (August 2011)
b. Subsequent attacks and reactions
5.4 Attacks on other targets
5.5 Identity of the attackers
6. Contractual regulation
7. Burden of proof
8. The RPPO requirement
8.1 Security plan
8.2 Structural protection
8.3 Technological devices
8.4 Security forces
9. The Avoidance Requirement
9.1 Attacks on facilities
9.2 Attacks on the pipe
10. EGAS' counter-arguments
10.1 Other targets
A. Before the Revolution
B. After the Revolution
11. Special Case: First Attack
12. Alleged waiver of right to challenge Force majeure
13. Bad faith
X. MERITS (I): INTRODUCTION
XI. MERITS (II): THE REPUDIATORY BREACH
1. EMG's and IEC's commmon position
2. EGAS' Position
2.1 Unchallenged invoices become payable
2.2 Wrongful alternative Calculations
A. Pass Through Compensation
B. Shortfall Compensation
C. Incorrect PNQ
2.3 Lawful termination of the GSPA
2.4 Art. 2.5 is a complete code
3. EMG's and IEC's reply
3.1 Monthly Payment
3.2 Deductions
3.3 Termination at common law
4. The Parties' position on alternative arguments
4.1 EMG's force majeure
4.2 Good faith
4.3 Reliance on one's own wrong
4.4 Annual Statement and Reconciliation
4.5 January 2012 Payment
4.6 Late termination
5. The Tribunal's Decision
5.1 How is the amount due to be calculated7
A. Payment provisions
a. Art.9.3
b. Art. 9.4.7
B. EGAS' Monthly Invoices
a. EGAS' position
b. EMG's and IEC's position
C. The Tribunal's decision
5.2 Shortfall Compensation and Pass Through Cost
A. Shortfall Compensation provisions
B. Claim for Daily and Monthly Shortfall Compensation
C. Pass Through Costs
D. Waiver of Shortfall Compensation
E. Calculation of the Shortfall Compensation
a. Contractual regime
b. Calculation of the Monetary Compensation
c. FTI's calculation of the Monetary Compensation
5.3 Failure to pay amounts for four consecutive months
A. Recurrent deemed nominations
a. Relevant contractual provisions
b. The Tribunal's decision
B. Amount of gas deemed to have been nominated by EMG
C. Are deemed nominations subject to a contractual maximum?
a. Relevant contractual provisions
b. The Parties' positions
c. The Tribunal's decision
D. The hypothetical application of a daily maximum
a. Relevant contractual provisions
b. The proposed calculations
c. The Majority's decision
d. Daily Maximum
E. Shortfall Compensation owed by EGAS for delivery failures
F. Determination of amounts due between EMG and EGAS
a. Amounts owed by EMG
b. Amounts owed by EGAS
G. EGAS' improper termination of the GSPA
5.4 EMG's and IEC's right to terminate at common law
A. Relevant contractual provisions
B. The Parties 'positions
a. EMG
b. IEC
c. EGAS
C. The Tribunal's decision
a. EGAS' repudiatory breach
b. Contractual exclusion of the common law right to terminate
5.5 Alternative arguments
A. Partial cure
B. No benefit from one's own wrong
a. EMG's and IEC's positions
b. EGAS' position
c. The Tribunal's decision
C. EGAS' attempt to terminate in badfaith
a. IEC's position
b. EGAS'position
c. The Tribunal's decision
D. Timeliness of EGAS' termination letter
a. Relevant contractual provisions
b. IEC's position
c. EGAS' position
d. The Tribunal's decision
6. Conclusion
XII. MERITS (III): THE DELIVERY BREACHES
Supply of the contractually agreed quantities of gas
1.1 EMG's Position
1.2 IEC's Position
1.3 EGAS' position
1.4 The Tribunal's decision
A. Release of Claims
a. With respect to EMG
b. With respect to IEC
B. Estoppel
C. Abuse argument
2. Reasonable endeavours to enable EMG to deliver
2.1 EMG and IEC's position
2.2 EGAS' position
2.3 The Tribunal's decision
3. Not committing EMG's volumes
3.1 EMG's position
3.2 EGAS' Position
3.3 The Tribunal's decision
4. Conclusion
XIII. QUANTUM (I): INTRODUCTION
XIV. QUANTUM (II): EMG'S COMPENSATION
Preliminary issues
1.1 Claim for Balance of Payments
1.2 Claim for Off-Specification Gas
2. Legal arguments
2.1 Shortfall Compensation as a closed regime
A. EGAS'position
B. EMG's position
C. The Tribunal's decision
a. Compensation for delivery shortfalls
b. The Tribunal's interpretation
2.2 Exclusion of indirect loss
A. EGAS'position
B. EMG's position
C. The Tribunal's decision
2.3 Cap on liability
A. EGAS'position
B. EMG's position
C. The Tribunal's decision
3. Compensation for Tripartite Delivery Breaches
3.1 Liquidated Damages
A. FTI's expert report
B. The calculations
3.2 Limitation on liability
4. Compensation for the Tripartite Repudiatory Breach
4.1 But For Scenario
A. MethodologyappliedbyFTl
B. Criticism by JWC (and FTI's reply)
a. DCF model
b. Assumptions
c. Cap at bookvalue
C. The Tribunal's decision
a. DCF model
b. Assumptions
c. Cap at book value
D. Application of the Tribunal's decision to FTI's calculations
a. Gross margins
b. Operating expenses
c. Capital adjustments
E. Calculation of the cash flows
a. Cash flows
b. Liability cap
c. End of term
4.2 ActualScenario
A. EGAS'position
B. EMG's position
C. The offer
D. The Tribunal's decision
a. Proven facts
b. EMG's value in the Actual Scenario
4.3 Discount rate and valuation date
A. The experts'opinion
B. The Tribunal's decision
a. Discount rate
b. Valuation date
5. Clarification: Shortfall Compensation deduction
6. Conclusion
7. Relief regarding taxes
7.1 The Parties' position
7.2 The Tribunal's decision
A. Direct taxes
B. Indirect taxes
XV. QUANTUM (III): IEC'S COMPENSATION
1. Legal arguments
1.1 Pass through
A. EGAS'position
B. JEC's position
C. The Tribunal's decision
1.2 No compensation for July 2008-January 2011
A. EGAS'position
a. Shortfall Compensation: exclusive regime
b. Settlement
B. JEC's position
a. No waiver
b. On -Sale exclusion clauses not applicable
C. The Tribunal's decision
a. Possible waiver
b. Shortfall Compensation
c. Settlement
1.3 Damages not foreseeable or too remote
A. EGAS'position
a. Losses caused by IEC's alleged inefficiencies
b. Remoteness, foreseeability and
7c. Other Costs
B. JEC's position
a. Alleged inefficiencies
b. Foreseeability, remoteness and proof
C. The Tribunal's decision
a. Exclusion of losses under second limb in Hadley v. Baxendale
b. IEC's alleged inefficiences
c. Proofof future loss
2. The experts' calculations of Additional Fuel Costs
2.1 PAC:Ju1y2008-June2Ol3
A. Nera's assumptions
B. JWC's criticism
2.2 Near FAC (July 2013 - June 2015)
2.3 Long FAC (July 2015 - June 2028)
A. Price and quantity
B. Duration
3. The Tribunal's decision
3.1 Tripartite Delivery Breaches
A. Nera's calculation
a. UCOD
b. PUA's decisions on Additional Fuel Costs
B. The Tribunal's decision
a. PUA's decision as an indication of the Additional Fuel Cost
b. The amount of Additional Fuel Costs
C. Calculation of the liability cap
a. Hourly Shortfall Compensation
b. Monthly Shortfall Compensation
3.2 Tripartite Repudiatory Breach
A. Pre-TamarAC
a. May-December 2012
b. January-March 2013
B. Post-TamarAC
a. The2Ol2PUADecision
b. Difference in prices
c. Quantity
d. Duration
3.3 OtherCosts
A. Insufficient evidence
a. Additional maintenance costs
b. Chartering storage facilities
c. LNG shipments
B. Avoidance of double recovery
4. Capitalisation and discounting
4.1 Discount rate: WACC
4.2 Discounting
A. May - December 2012
B. January - March 2013
C. Apri12013-June 2023
XVI. QUANTUM (IV): INTEREST
1. EMG's position
2. IEC's position
3. EGAS' Position
3.1 With respect to EMG
3.2 With respect to IEC
4. The Tribunal's decision
4.1 IEC's modification of the interest rate
4.2 Applicable law
A. Pre-award
a. Interest rate
b. Simple vs. compound
c. Dies a quo and dies ad quem
B. Post-award
a. Interest rate
b. Simple v. compounded
c. Dies a quo and dies ad quem
4.3 Quantification of interest
A. Amounts awarded to EMG
B. Amounts awarded to IEC
XVII. COSTS
EMG's position
A. Jurisdictional phase
B. Merits and Quantum phase
2. EGAS' position
A. Jurisdictional phase
B. Merits and Quantum phase
3. IEC's position
A. Jurisdictional phase
B. Merits and Quantum phase
4. The Tribunal's decision
4.1 LegalFees
A. Criteria for the allocation of costs
a. Jurisdictional issues
b. Liability issues
c. Quantum issues
B. The reasonable Legal Fees
C. Apportionment 0fEGAS' reasonable Legal Fees
a. Jurisdictional Issues
b. Liability Issues
c. Quantum Issues
D. The allocation of reasonable Legal Fees
a. Jurisdictional Issues
b. Merits Issues
c. Quantum Issues
4.2 ICC Costs
4.3 Interest
XVIII. SUMMARY OF THE DECISIONS
1. Jurisdiction and Admissibility
1.1 Summary of the decisions
1.2 Relief sought
A. Claimant's Relief
B. Respondent 3's Relief
C. Respondents] and 2's Relief
2. Merits
2.1 Summary of the decisions
A. Force majeure
B. Merits
2.2 Relief sought
A. Claimant's Relief
B. Respondent 3's Relief
C. Respondents] and 2's Relief
3. Quantum
3.1 Claimant's Claim for compensation
A. Summary of decisions
B. Claimant's Relief
3.2 Respondent 3's Claim for compensation
A. Summary of the decisions
B. Respondent 3's relief
4. Costs and expenses
4.1 The Parties's relief
A. EMG's
B. JEC's
C. EGAS'
4.2 The Tribunal's decision
A. LegalFees
B. ICC Costs
C. Interest
XIX. DECISION

...

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, ii 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 Reference

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 10 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 2011.

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 2012.

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 appoint2:

- 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.

...

XIX. DECISION

1831. For the reasons given above, the Tribunal declares and orders the following:

As regards EMG's claims

1. Declares that the Tribunal lacks jurisdiction to adjudicate EMG's GSPA Claims.

2. Declares that the Tribunal has jurisdiction to adjudicate EMG's Tripartite Agreement Claims.

3. Declares that EMG's Tripartite Agreement Claims are admissible and enforceable.

4. Declares that EGPC and EGAS breached the Tripartite Agreement and committed the Tripartite Delivery Breaches and the Tripartite Repudiatory Breach.

5. Declares that the EGPC and EGAS repudiated the Tripartite Agreement, entitling EMG to accept that repudiation, terminate the Tripartite Agreement and claim full compensation under English law.

6. Orders EGPC and EGAS to pay to EMG (i) USD 230,935,579 as compensation due for Tripartite Repudiatory Breach plus (ii) USD 57,357,135 as compensation due for Tripartite Delivery Breaches.

7. Orders EGPC and EGAS to pay to EMG interest on the total compensation awarded in the preceding Decision, at an interest rate p.a. equal to USD LIBOR for one month deposits plus a margin of 3%, to be recalculated at the end of each month, and to be compounded annually on the last day of each year; interest will accrue (i) for compensation due for the Tripartite Repudiatory Breach, from 30 April 2012 until the date of actual payment, and (ii) for compensation for Tripartite Delivery Breaches, from the dates and on the amounts set forth in the following table, until the date of actual payment:

Dies a quo - Principal amount
28 February 2011- 4,529,891
31 March 2011 - 2,724,295
30 April 2011 - 1,263,851
31 May 2011 - 5,061,914
30 June 2011 - 3,376,243
31 July 2011 - 2,184,486
31 August 2011 - 4,331,418
30 September 2011 - 4,192,061
31 October 2011 - 3,401,235
30 November 2011 - 3,428,510
31 December 2011 - 5,203,639
31 January 2012 - 4,261,872
29 February 2012 - 4,198,869
31 March 2012 - 4,586,380
30 April 2012 - 4,612,472

As regards IEC's claims

8. Declares that the Tribunal has jurisdiction to adjudicate IEC's Tripartite Agreement Claims.

9. Declares that IEC's Tripartite Agreement Claims are admissible and enforceable.

10. Declares that EGPC and EGAS breached the Tripartite Agreement and incuned in the Tripartite Delivery Breaches and the Tripartite Repudiatory Breach.

11. Declares that IEC lawfully terminated the Tripartite Agreement on account of the repudiatory breach of the Tripartite Agreement committed by EGAS and EGPC.

12. Orders EGPC and EGAS to pay to IEC (i) USD 1,650,564,941 as compensation due for Tripartite Repudiatory Breach plus (ii) USD 113,092,525 as compensation due for Tripartite Delivery Breaches.

13. Orders EGPC and EGAS to pay to IEC interest on the total compensation awarded in the preceding Decision, at an interest rate p.a. equal to USD LIBOR for one month deposits plus a margin of 3%, to be recalculated at the end of each month, and to be compounded annually on the last day of each year; interest will accrue (i) for compensation due for the Tripartite Repudiatory Breach, from 30 April 2012 until the date of actual payment, and (ii) for compensation for Tripartite Delivery Breaches, from the dates and on the amounts set forth in the following table, until the date of actual payment:

Dies a quo - Principal amount
28 February 2011 - 8.039.600
31 March 2011 - 5.861.061
30 April 2011 - 2.338.025
31 May 2011 - 10.076.554
30 June 2011 - 5.088.394
31 July 2011 - 4.377.856
31 August 2011 - 7.540.762
30 September 2011 - 7.351.662
31 October 2011 - 4.927.387
30 November 2011 - 6.177.571
31 December2011 - 11.167.577
31 January 2012 - 9.598.701
29 February 2012 - 9.603.257
31 March 2012 - 10.474.414
30 April 2012 - 10.469.704

As regards Legal Fees and ICC Costs

14. Orders EGPC and EGAS to pay (i) to EMG USD 1,475,000 for EMG's reasonable Legal Fees and (ii) to IEC USD 2,600,000 for IEC's reasonable

Legal Fees.

15. Orders EGPC and EGAS to pay (i) to EMG USD 267,633 for ICC Costs and (ii) to IEC USD 751,997 for ICC Costs.

16. Orders EGPC and EGAS to pay to EMG and IEC interest on the Legal Fees and ICC Costs at an interest rate p.a. equal to USD LIBOR for one month deposits plus a margin of 3%, to be recalculated at the end of each month, and to be compounded annually on the last day of each year, from the dies a quo, which is the date of this Award, until the date of actual payment.

17. Dismisses all other prayers for relief submitted by the Parties.

Place of arbitration: Geneva, Switzerland
Date of this Award: 4 December 2015

...

Footnotes omitted