International court: Turkey to pay Iraq $1.47 billion after offset

International court: Turkey to pay Iraq $1.47 billion after offset
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A disclosed court order, recently subjected to speculations by sides, says Turkey is to pay Iraq a remaining amount of close to $1.5 billion after the amount to be paid by Iraq to Turkey is deduced.

Following contradicting claims by sides concerning an international court's ruling in the dispute over Turkey's oil imports from Iraqi Kurdistan, it was recently disclosed that the court did in fact order both sides to pay compensation to each other, but that Turkey is obliged after an offset to pay a remaining amount of around $1.5 billion to Iraq.

Iraq's Oil Ministry had announced on 25 March that Iraq won the arbitration case against Turkey at the Arbitration Tribunal of the International Chamber of Commerce in Paris on 23 March.

Turkey's Ministry of Energy and Natural Resources responded three days later with a statement, saying, "The panel of judges rejected four of the five demands of Iraq, while it accepted most of the demands of our country and ruled that Iraq should pay compensation to Turkey."

The longstanding arbitration case relates to Iraq's claim that Turkey violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil from the Kurdistan Region of Iraq (KRI) to the Turkish port of Ceyhan in disregard of Baghdad's instructions.

Iraq also claimed that the KRG sold oil at a discounted price to what it would have been sold by Iraq’s State Oil Marketing Organization (SOMO), and that Turkey had been overpaid by the KRG for the transportation of oil.

Rudaw said on Thursday that they saw the court ruling and according to the ruling Turkey was to pay over $1.9 billion in compensation to Iraq for buying oil from the Kurdistan Region of Iraq (KRI) at a discounted price and for charging higher transportation fees.

In turn, Iraq was liable to pay $527 million to Turkey in reimbursement claims related to equipment and personnel, and Turkey is "to pay forthwith to the Claimant [Iraq] the sum of $1.471 billion after set off of the amounts" before interest.

The ruling states that "the Respondent [Turkey] is obligated to act in accordance with instructions given by the Claimant [Iraq] in operating the Turkish portion of the Pipelines, as well as the related storage and loading facilities at Ceyhan," and that Iraq has full authority over the utilization of the facilities.