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Israelis Blast Moscow’s Rejection of $2, 400, 000 Claim for Oil Damages

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Israel sources asserted today that “political considerations, not legal principles” were the determining factors in the rejection by a Soviet arbitration court last Thursday of Israel’s claims for $2, 400, 000 in damages for the unilateral Soviet cancellation of an oil contract during the Suez crisis.

The Israel experts said that all persons and countries conducting trade negotiations with the Soviets would be wise to keep in mind Israel’s experience. They added that the tribunal’s action “gives the lie” to Soviet Russian claims of a desire to expand international trade relations.

The arbitration tribunal, which acted after months of delaying tactics, used the “most peculiar” rules of procedure, unprecedented in legal or arbitration history, it was reported here. Tribunal judges refused to call witnesses Israel wanted to have heard and refused to accept basic documents submitted in behalf of Israels case.

The suing Israel oil firm charged it contracted in 1956 to import several thousand tons of Soviet oil and that the Russian Government cancelled the contract later in the year. Soviet officials contesting the damage suit said the contract was “junked” because of Israel “aggression” against Egypt.

Prof. Haim Halperin of the Agricultural Bank in Tel Aviv left today for Moscow to participate in the fifth convention of the Economic Cooperative Center, which opens there tomorrow.

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