Iraq-Kuwait aviation dispute reaches Canadian courts

17 September 2008
The latest round in the dispute between Kuwait Airways and Iraqi Airways will take place in a Canadian court on 18 September.

The hearing in Montreal will see Iraqi Airways attempt to overturn the ruling of a Canadian court in late August that allows Kuwait Airways to seize 10 aircraft ordered by Iraq from Canada's Bombardier earlier this year.

Iraq is claiming that the planes are immune from seizure as they are the property of the national government, not Iraqi Airways itself.

Baghdad has employed this ownership structure since it unveiled the $5.5bn deal for 50 new aircraft earlier this year to try and protect them from Kuwaiti seizure.

Talks are ongoing between the two countries over a cash settlement to resolve their dispute. Kuwait Airways claims it is owed $1.2bn to compensate for aircraft and equipment stolen during the Iraqi invasion of Kuwait in 1990 (MEED 29:2:08).

Sources on the Kuwaiti side have made clear that even if the Iraqi claim in Montreal is successful, an appeal by Kuwait Airways could drag the process out for months. If Iraq wants to get its planes, they warn, Baghdad will need to come up with the cash to settle the dispute.

A ruling is expected in late September.

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