Kuwait's battle against Iraq continues in court

Lawyers representing Kuwait Airways have issued a statement regarding its ongoing dispute with Iraqi Airways (IAC)

Christopher Gooding, of Fasken Martineau, London, has represented Kuwait Airways Corporation (KAC) since 3rd August 1990 in its’ legal fight to obtain compensation from Iraqi Airways for what it describes as "the theft of its fleet and spare parts."

T he dispute between KAC and IAC is the longest running commercial case in the history of the English Courts KAC holds judgments totalling nearly $1.2 billion against IAC and $83.5m against the State of Iraq.

KAC last year seized IAC and State of Iraq interests in an order of new aircraft from Bombardier in Montreal. KAC claims that the formal contract between the Ministry of Finance of Iraq and Bombardier is a sham and that the real contract is between IAC and Bombardier. The fight continues in the Canadian courts but the total value of the contract is nowhere near the full amount of the judgments held by KAC.

By order of the Quebec Courts, on the request of Bombardier and Iraq, Iraq and IAC have substituted a letter of credit for the value of three aircraft which Bombardier have judicial permission to deliver to IAC .

Gooding said: " KAC has always made it clear that it has no argument with Bombardier and it is delighted that Iraq/IAC have now taken the obvious steps necessary to allow Bombardier's aircraft to be delivered whilst fully securing and totally preserving the rights of KAC against Iraq/IAC. Bombardier has been paid for its aircraft and KAC's security for its' claims remains unchanged. The case continues in the Quebec Courts and before the Supreme Court of Canada.

“KAC has, over many years, made its position very clear. IAC assets will be seized in any and all jurisdictions where enforcement of its judgments is possible. IAC has made no sensible attempt to address the issue of satisfying its responsibilities amicably and has left KAC no other choice.

"KAC’s objective is not to shut down IACs attempts to expand its network: it merely wishes to be paid what it has been legally found to be entitled to receive. We are delighted that the IAC objective is to fly to jurisdictions, especially in Europe, where judgments against it are registered.

"IAC has tried in the past to operate behind legal and commercial screens which hide its financial interest in commercial ventures. KAC has shown, notably in Canada, that it will attack such devices. As recognised by US advisors to the Iraqi Ministry of Transport in the past, the difference between IAC and the Department of Transport is illusory and the idea that IAC can disassociate itself from flights under its colours merely by virtue of chartering in the name of some other organ of the State is absurd. All such avoidance devices are being investigated and assets seized”

There has been no statement issued by Iraq Airways in response.