Ampal-American vs. Egypt: Terrorist attack
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  • Amount demanded: US$535 million
  • Outcome: Settled
  • Treaty invoked: Egypt - United States of America BIT
  • Sector: Energy
  • Issue: Security / terrorism

The case originates from a group of US-incorporated companies who are shareholders of the East Mediterranean Gas Company S.A.E. (EMG), an Egyptian company that signed a contract in 2005 with two Egyptian state-owned corporations, EGPC and EGAS, to purchase natural gas at the source in northern Sinai and export it to Israel through a pipeline. Egypt gave a license to EMG to operate under a tax-free zone regime until 2025.

The claimants alleged that Egypt carried out the following measures that destroyed their investment:

  • Egypt revoked EMG’s tax-exempt status in 2008 by enacting a new law;
  • Egypt coerced them into renegotiating their contract by withholding gas from EMG;
  • Egypt did not comply with its delivery obligations;
  • Egypt failed to protect the pipeline from thirteen terrorist attacks during the Arab Spring, delivering no gas to EMG for months;
  • Egypt eventually terminated the contract in 2012.

In February 2017, the arbitration panel ruled that, while Egypt had been unable to prevent the first four attacks on the gas pipeline perpetrated in 2011, the Egyptian security forces had failed in the protection they should have provided against additional attacks that occurred, thereby failing to protect the claimants’ investment. The tribunal also held that Egypt had expropriated the investors by revoking their tax-free status in 2008 and by terminating their contract in 2012.

The parties ultimately agreed to a settlement in November 2017, whereby Egypt had to pay the investors US$150 million, as part of a larger transaction. The agreement put an end to the Ampal-American case, as well as another parallel claim launched by the CEO of Ampal-American, Polish national Yosef Maiman, under the Poland-Egypt BIT.

Last update: May 2021