Elbit Systems Sues Israeli Government Over Lost Turkey Contract

Elbit Systems has filed a lawsuit against the Israeli government for revoking export licenses for a long-range aerial photography program for the Turkish Air Force thus resulting in damages worth $74 million. The weapons manufacturer said that along with its subsidiary, Elop Ltd, “was compelled” to file suit following “unsuccessful efforts to reach an appropriate compensatory settlement” with the government. The lawsuit marks the first of its kind legal action against its host government by the privately held, publicly traded firm. In 2005, Turkey signed a contract with Elop and Elta Systems, a subsidiary of state-owned Israel Aerospace Industries (IAI), for Lorop reconnaissance pods for Turkish Phantom fighters that had been upgraded by IAI. The contract was temporarily suspended due to technical hurdles but was resumed in 2009 after intervention from Israel’s MoD. However, ties between the two countries deteriorated after Israel’s 2008 incursion into Gaza, killing nine activists during a raid of a Gaza-bound Turkish ship. The strain in ties cost Elta $55 million in lost revenue.