Energy Company Bazan Settles Negligence Claim Against Gornitzky Law Firm for 73 Million Shekels

Israeli energy company Bazan accused the prominent law firm Gornitzky & Co. of professional negligence, resulting in a settlement payment of 73 million shekels, approximately 25% of the original claim. The dispute arose from legal representation provided by attorney Jack Smith, formerly of Gornitzky, in a complex conflict between Bazan and the gas company EMG, founded by the late businessman Yossi Maiman to export natural gas from Israel to Egypt.

Bazan alleged that Smith was negligent in drafting documents that would have extended the statute of limitations for Bazan’s claims against EMG under English law. These claims, ranging from 60 to 450 million dollars, concerned EMG’s failure to meet contractual obligations. In 2019, after EMG raised a statute of limitations defense, Bazan’s English lawyers contacted Smith to correct the drafting error, warning that failure to do so would be his responsibility.

An arbitration ruling in February 2021 accepted EMG’s statute of limitations defense, prompting Bazan to send a draft claim against Gornitzky for 265 million shekels in May 2021. Subsequent negotiations led to the 73 million shekel settlement without an admission of liability by the law firm. The insurance company for Gornitzky, Menora Mivtachim, has since sued the previous insurer, Clal, arguing that Smith’s policy coverage was with Clal and that Clal should bear the compensation costs. Gornitzky has not yet responded to the lawsuit.