Kuwait Airways had been seeking $1.2bn in compensation for Saddam-era invasion
The Kuwaiti government has ratified a $500m settlement deal with neighbouring Iraq, ending its two-decade long dispute over the seizure of planes in the Gulf war in 1990.
Iraq will complete the payment of $500m by the middle of 2013, according to the state-run Kuwait Gazette.
The deal was ratified by Emir Sheikh Sabah al-Ahmed al-Jaber al-Sabah in a decree late on 23 October.
The settlement is less than half the $1.2bn state-owned Kuwait Airways Corporation (KAC) had been claiming. KAC says 10 of its planes were seized by Iraq during its occupation of Kuwait in 1990.
In May 2010, Iraq began dissolving its national airline after Kuwait Airways obtained an order from the High Court in London, that included freezing the worldwide assets of Iraqi Airways.
According to a statement from the Kuwaiti government, Kuwait’s lawyers in the UK have been informed to stop all the complaints against Iraqi Airways.
“This decision will permit the Iraqi Airways to purchase aircrafts and conduct contract to develop its company.”
Iraq still owes more than $20bn in UN-mandated war reparations, which began in 1994. Since then, five per cent of the Iraq’s annual oil revenues has been allocated to paying compensation to Kuwait.