A Swiss court has ordered an Israeli oil firm to pay Iran $1.1 billion in compensation over a joint venture from before the 1979 Islamic revolution, state news agency IRNA said Thursday.

A judicial official quoted by IRNA said Tao, an Israeli firm registered in Panama, was ordered this month to pay the compensation to the National Iranian Oil Company (NIOC), in a legal tussle dating back to 1989.

NIOC and an Israeli company had signed an agreement in 1968 to transport Iranian oil to the Jewish state across the Red Sea.

But Tehran says it was owed $450 million after the revolution when Iran cancelled the contract because it does not recognise the Jewish state.