Israel Hires American Law Firm Should Noble Turn to Arbitration

Israel's Ministry of Justice has hired the services of an American law firm to represent the state in the event that Noble Energy sues Israel for damages. The Ministry has also started collecting evidence and documents to defend Israel's legal position.

For the last few months there has been a concern among Israeli officials that the American energy company, who is part-owner and sole operator of the Tamar field and is part owner of the Leviathan field and other natural gas assets offshore Israel, and is the leading player of the monopole in the Israeli natural gas market, will sue Israel at the ICC International Court of Arbitration in Geneva and will seek damages of billions of dollars. It is now assumed that if the Natural Gas Framework will not be approved during the coming few weeks Noble Energy will freeze indefinitely the development of Leviathan field and will turn to arbitration. The arbitration at the ICC could last a few years.

According to reports in Israeli media, Noble Energy is considering that course of action because of regulatory hurdles that the company claims delayed the development of its natural gas assets, in particular the development of the Leviathan field.

As an American company, Noble Energy will not able to sue Israel at the ICC, since there is no bilateral agreement between Israel and the US that enables a private company to sue the state. However, Israel has such an agreement with Cyprus. Commentators have noticed that 3 years ago Noble established a Cypriot entity to deal with Israeli authorities and through this company, according to assessments, Noble is able to sue Israel for damages.