The Israeli High Court of Justice ruled on Sunday (27.3.16) against the Government's gas framework agreement to develop and export the country's offshore gas reserves.

By a 4-1 majority, the Judges ruled the gas framework agreement to be unconstitutional and that the Government exceeded the constitutional limits of its discretion, due to the inclusion of a "stability clause" that guaranteed pricing and regulatory stability for the gas companies for a period of 10 years, whilst barring future governments from amending the terms of the deal.

The Judges decided not to intervene in other issues relating to the framework agreement, including the unprecedented use of Section 52 of the Antitrust Law which exempts the gas companies from various provisions of the Antitrust Law, for reasons of foreign policy or national security. Judge Rubinstein said that invoking Section 52 was reasonable and within the bounds of Governmental authority, notwithstanding the potential to cause substantial harm to competition in the sector.

The Court suspended the gas framework agreement for a period of one year, requiring the Israeli Government to amend the framework agreement within such time period or otherwise it will be canceled.