Dead Sea Works, a subsidiary of Israel Chemicals (ICL), has filed a legal case over the alleged violation of its concession by the State of Israel. The company charges that the decision of Israel’s Finance Minister last year to establish a committee to determine the level of royalties to be paid is a gross violation of its concession. The company is demanding payment for damages it has already sustained and any future damage as a result of the government decision.
The committee appointed last year is headed by Professor Eitan Sheshinski, and is due to issue its report later this year and make recommendations of the level of royalties to be paid by companies in the mining field. According to Dead Sea Works, the committee’s activities run counter to two central conditions in its concession: one that sets the level of royalties to be paid and another that determines that in the event of a disagreement over the level the two sides will resort to arbitration.
ICL is currently in arbitration with the Israeli Finance Ministry involving a March 2011 suit filed by the ministry against ICL and its Dead Sea Works subsidiary demanding $291 million plus interest for the back payment of royalties from the company from the production of potash at the Dead Sea. The Finance Ministry charges that Dead Sea Works failed to transfer to the ministry all data pertaining to the mining operations of potash under the terms of the company’s concession. The ministry said that this prevented it from presenting the court with an exact amount in the suit that pertains to royalties from 2000-2009.
ICL has denied any wrong doing and rejects claims that it owes the state money. A final decision on that arbitration is due in the coming months.