Egypt has frozen gas talks with Israel after being ordered by an arbitration group to pay $1.76 billion in fines for cutting some of the world’s cheapest gas to the Tel Aviv regime.

Cairo said it will appeal the order by the Paris-based International Chamber of Commerce to pay the hefty fine to Israel for halting gas supplies to the occupied territories three years ago.

Egypt cancelled a 20-year deal for supply of natural gas to Israel in 2012 following the ouster of former dictator Hosni Mubarak.

The gas pipeline, running through the restive north Sinai from the city of el-Arish to the Israeli port city of Ashkelon, came under repeated attacks which put it out of service in 2011.

The deal was widely unpopular in Egypt but solidly backed by former rulers who supplied Israel with 40% of its natural gas needs at much lower than market prices under an economic annex of their 1979 peace treaty.

At the time of the cancellation of the deal, Egyptian Natural Gas Holding Company (EGAS) complained that it had not been paid by the firm that bought gas from Egypt and sold it to Israel.

The gas pipeline ran through el-Arish in Egypt to the Israeli port city of Ashkelon

But it was Tel Aviv which took Egypt to the court, demanding $4 billion from the suppliers.

On Sunday, the Paris-based tribunal was reported to have ordered EGAS and another Egyptian firm, EGPC, to pay compensation of $1.76 billion plus interest and legal expenses.

Egyptian Prime Minister Sherif Ismail said an appeal would be filed within six weeks. The government also ordered Egyptian companies to freeze negotiations to import gas from Israel.

Salah Hafez, former chairman and CEO of the National Petroleum Company, said the court was unlikely to change its decision, adding Egyptian authorities had to resolve the dispute with the Israelis.

Ironically, Egypt which used to export gas to Israel under Mubarak plans imports from the occupied territories under the new government of President Abdel Fattah el-Sisi.

The new arrangement comes following reports that Israel was set to become a major gas supplier with the discovery of a massive offshore field and looked to Jordan and Egypt as potential buyers.

In August, however, Eni discovered a “super giant” natural gas field offshore Egypt in what the Italian oil company said was the largest find in the Mediterranean Sea.

Egyptian authorities have said the country still wants to import Israeli gas despite the discovery of the Zohr Prospect which is estimated to hold 30 trillion cubic feet of gas, equivalent to 5.5 billion barrels of oil.