European High Court to Be Asked to Rule on Legality of Britain’s Refusal to Sell Oil to Israel

The European Court of Justice will be asked to pronounce on the legality of Britain’s refusal to sell oil to Israel.

This was decided in the English High Court Friday despite opposition by the British government. Lawyers expect the case to come to the European Economic Community’s tribunal in the latter part of next year, barring a successful last minute appeal by the British government’s attorney general.

The case stems from a dispute between two oil companies following a refusal to load an Israel-bound cargo at the British North Sea oil terminal in the Shetland Islands.

A Swiss subsidiary of the Bulk Oil Co. had purchased the oil on behalf of the Israeli Delek Co. from the American owned Sun Oil, the world’s 12th biggest oil concern.

The first shipment was barred in May, 1981 by British Petroleum, which had produced the oil in the North Sea and which operates the giant Sullom Voe terminal on the Shetlands.

CLAIMS AND COUNTER-CLAIMS

It was stopped under a four-year-old government ruling that British North Sea oil can only be sold to members of the International Energy Agency, the European Economic Community and other countries with whom there was already a pattern of supply. This included Finland but excluded Israel.

Sun Oil has been claiming damages for loss of profits from Bulk Oil, whose Swiss subsidiary has in the past been the main non-Israeli procurer of oil for Israel. Bulk argues that the British ban on oil for Israel breaches the 1975 Free Trade Area pact between Israel and the EEC.

Had the deal gone ahead it would have involved the delivery of 13 cargoes of North Sea crude oil over an 18 month period worth about $200 million.

The British government’s oil export guide lines were issued during a world wide oil shortage which briefly followed the revolution in Iran. Prior to that, Israel had discreetly obtained about half her oil from Iran and was apparently hoping that Britain would help to replace it.

DENIES DISCRIMINATION AGAINST ISRAEL

The government denies that Israel was being discriminated against, pointing out that many other countries are not on her list of approved oil customers, and that since Britain sells Israel coal she cannot be accused of kowtowing to the Arab boycott.

Israelis, however, reply that the oil ban hits them harder than other countries, since they are barred from most of the world’s markets. Recently, Norway agreed for the first time to sell North Sea oil to Israel. However, British officials have said they will not change their policy whatever the Norwegians do.