Egyptian Appeals Court overturns November ruling cancelling gas export deal between Israel and Egypt

The Supreme Administrative Court canceled the First Instance Court’s ruling to stop gas exports to Israel, thereby accepting the appeal that was filed by the government. The court explained that the decision to sell surplus gas to the Eastern Mediterranean, including Israel, was issued within the scope of the political function of the sovereign government; a sovereignty that the constitutional, administrative and normal judiciary does not control.

From its side, the Petroleum Ministry, however, said the ruling does not mean it would not negotiate amending the prices.
In a quick response, the members of the popular campaign ‘Gas Setback’ considered the ruling as a shocking violation of the country’s interests. They said the failure to implement the first ruling caused daily losses in millions.

On the other hand, the Government’s appeal on the court’s ruling is contrary to the official governmental statements in the People’s Assembly on the tongue of Dr. Mufid Shehab, who stressed on that the government is away from exporting gas to Israel, as the contract was signed between the two companies and not involving the government.

Gas started flowing to Israel through a pipeline for the first time in May 2008 under an agreement signed in 2005 for the supply of 1.7 billion cubic meters a year over 20 years.
Mohamed Anwar El-Sadat, one of the plaintiffs, told reporters the ruling came as a blow and a surprise. “No one disagrees on the need to stop the bleeding of the state’s resources.

The people are very sad about the export of gas to Israel in the wake of the barbaric massacres which Israeli has carried out in Gaza.”
When the initial judgment was passed to stop the export of gas to Israel in 2008, the decision stated that the main reasons behind it were the ambiguity of the agreement, the low price and the unusual length of the agreement.

Immediately the government and the Ministry of Petroleum appealed. The appeal was based on the premise that it is a “commercial” agreement and is a sovereign act, and that no party has the right to object to it, especially as it is an agreement between the Ministry of Petroleum and a private company, namely EMG.

However, the judge based his ruling on Ambassador Ibrahim Yosri’s, former head of legal affairs and treaties at the Egyptian Foreign Ministry, argument that the Minister of Petroleum’s decision 100/2004 in favor of EMG stipulated that the Ministry is obliged to deliver the quantities covered by the contract to Israel. Moreover, the Israeli Minister of Infrastructure and the Egyptian Minister of Petroleum signed a Memorandum of Understanding (MoU) in June 2005, whereby the Egyptian Ministry of Petroleum guarantees the implementation of the contract between EMG and the Israeli Electricity Company. Yosri referred to the Vienna Convention, which recognizes MoUs as having the same force as treaties. Thus, the MoU between Egypt and Israel had to be submitted to the Egyptian Parliament for ratification, which did not happen.

This court ruling has put the Egyptian government in a very awkward situation because on the one hand, if it fails to implement the court decision it will appear as a government that does not respect the rulings of the judiciary. On the other hand, the implementation of the first ruling would complicate political and economic relations between Egypt and Israel.

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