Kuwait steps up legal fight against Iraqi Airways

Lawyer Christopher Gooding, who is now with London-based Fasken Martineau has represented Kuwait Airways Corporation (KAC) since 3rd August 1990 in its’ legal fight to obtain compensation from Iraqi Airways (IAC) for the “theft of its’ fleet and spare parts.”

The dispute between KAC and IAC is the longest running commercial case in the history of the English Courts mainly due to a series of findings of perjury and fraud against IAC which led to an overthrowing of 12 years of previous decisions. KAC now holds judgments on the correct facts 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 Fasken Martineau  says total value of the contract is nowhere near the full amount of the judgments held by KAC.

IAC has started services to Athens and Stockholm and has announced that it will commence services to London and other European destinations. Press reports suggest that such services will be operated in joint venture with German, Swedish and US charter companies.

Speaking earlier today Christpher Gooding issued a warning to partner companies when he said: “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. We are delighted that the IAC objective is to fly to jurisdictions, especially in Europe, where judgments against it are registered.”

He went on to say “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 will be investigated and assets seized”

Gooding also spoke about reports in Arabian Aerospace magazine and other media that IAC intends to sell its aircraft that are currently in storage at Queen Alia airport in Jordan.

He said “IAC procured the release of an injunction granted by the English Courts by giving various undertakings to the Court relating to the disposal of assets. It now stands in breach of those undertakings and this breach will be brought to the attention of the English Courts and the Jordanian authorities.

“Again, any attempt on the part of IAC to “sell” to shadow companies representing its interests (as it has operated before in Jordan) will be investigated and challenged. “