Jordan's Confrontation With The Israeli Gas Supply Halt

(MENAFN- Amman Net) The Context of Force Majeure

Two Arab nations, Qatar and Kuwait, have officially declared Force Majeure, halting gas and oil supplies to international buyers. By doing so, they legally exempt themselves from non-supply penalties stipulated in their sales agreements. In contrast, Jordan entered a controversial $10 billion agreement in 2016 to purchase gas from the Israeli Leviathan field through the National Electric Power Company (NEPCO). This long-term contract was set to supply 45 billion cubic meters over 15 years, starting in 2020.

The Breach and Financial Impact

Israel has recently halted supplies, violating the contract terms without an official declaration of Force Majeure. This disruption is not merely a technical glitch; it is estimated to cost Jordan a staggering $1.5 million every single day. Legally, if this stoppage continues without a valid justification, it constitutes a clear Breach of Contract, opening several legal pathways for Jordan under international commercial and energy law.

Legal Recourse: Specific Performance and Compensation

Jordan can pursue “Specific Performance,” legally demanding the immediate resumption of gas pumping. Furthermore, the Kingdom has the right to claim compensation for direct damages, such as the high cost of operating power plants with diesel or fuel oil, and indirect damages reflected in NEPCO’s growing deficit. It is worth noting that Israel previously used international courts to force Egypt to pay $1.76 billion in 2012 when gas supplies were interrupted due to pipeline bombings in Sinai.

Strategic Loopholes for Contract Termination

While the agreement includes heavy penalties for early cancellation, Jordan can strategically navigate certain legal “loopholes” to reduce obligations or terminate the contract without massive fines. The most prominent is the Misuse of the Force Majeure Clause. If the Leviathan field remains operational while exports to Jordan are halted, the Force Majeure claim becomes selective and unlawful, stripping it of legal protection.

Hardship Doctrine and Material Breach

Additionally, Jordan can invoke the “Hardship Doctrine” (Change of Circumstances), arguing that the contract no longer ensures the “Energy Security” it was built upon. Under international law, a contract cannot be used as a tool for political leverage. If the disruption is prolonged and unjustified, it qualifies as a “Material Breach of Contract,” which allows for termination without the burden of penalties.

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