Business | General
Kuwait obtains approval to seize Iraqi interests in $5b aircraft deal
Kuwait Airways (KAC) on August 27 obtained approval from the Superior Court in Montreal to seize the interests of Iraqi Airways (IAC) and Iraq involving a new Bombardier aircraft recently commissioned in a $5 billion deal.
- Staff Report
- Published: 23:53 August 29, 2008
Dubai: Kuwait Airways (KAC) on August 27 obtained approval from the Superior Court in Montreal to seize the interests of Iraqi Airways (IAC) and Iraq involving a new Bombardier aircraft recently commissioned in a $5 billion deal.
A statement was issued by Byfield Consultancy, which represents the London law firm of Howard Kennedy, which in turn represents Kuwait Airways in the case.
"A further order was obtained seizing two properties in Quebec belonging to the state of Iraq," the statement, a copy of which was emailed to Gulf News, said yesterday.
The orders were made in support of earlier judgments handed down by the English High Court.
The dispute between KAC and IAC, which commenced in 1990 following the invasion of Kuwait, has been the longest running commercial case in the history of the English Courts, mainly due to a series of findings of perjury against Iraqi Airways which led to an overthrowing of 12 years of previous decisions.
Potential liability
Judgments have been given against IAC on the correct facts, totalling some $1.2 billion.
IAC and the Iraqi government recently announced orders for aircraft worth $5 billion from Boeing and Bombardier with deliveries expected to commence next month.
Recent statements from Baghdad have suggested that the orders of aircraft to be flown by IAC were made by the Iraqi state to avoid potential liability to KAC.
In a judgment on July 16, the English High Court ordered Iraq to pay KAC costs (totalling in excess of $83.5 million) incurred by the airline due to Iraqi Airways's fraudulent defence of the KAC claim.
Christopher Gooding of Howard Kennedy stated: "Following the judgment against Iraq I said that enforcement action could be expected shortly.
"This first move in a sequence of planned enforcement proceedings, taken with the consent of the Kuwaiti government, has been forced on KAC by the total lack of movement towards any meaningful negotiations by Iraq and IAC.
"I hope that this action will act as a wake-up call. As I have said before, it is not the intention of KAC to take aggressive action for its own sake, but in the absence of any meaningful dialogue and in the light of KAC's duty to protect public funds, IAC and Iraq can expect further similar action to be taken without further warning."
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