The ruling by Montreal's Superior Court could undermine efforts by Iraqi Airways to rebuild its fleet with new aircraft from Bombardier and Boeing.

In February the Iraqi national carrier signed deals with the two firms to buy planes valued at $5bn at list prices (MEED 22:2:08).

Iraqi Airways had expected to receive its first Bombardier aircraft in September.

Earlier this year Kuwait Airways won a judgment in the English High Court against the Iraqi government for legal costs of $83.5m incurred during its pursuit of $1.2bn in compensation from Iraqi Airways (MEED 17:8:08).

The long-running legal battle dates back to 1990 when planes and equipment were stolen from Kuwait during the invasion of the country by Iraq.