In numbers

$1.2bn: Kuwait Airways is claiming in reparations

August 1990: Legal claim against Iraqi Airways was launched

Source: MEED

Kuwait Airways has seized a group of multimillion-dollar assets in Jordan and London owned by Iraqi Airways in a bid to force the airline to stop operations.

The seizure is the latest development in Kuwait Airway’s attempts to get $1.2bn in compensation for planes and equipment stolen during the 1990 invasion by Iraq.

“Our intention is to deny the skies to Iraqi Airways,” says Chris Gooding of UK-based law firm Fasken Martineau. “We will be rolling out a series of enforcements proceedings for assets in 15 other jurisdictions over the next few weeks.”

The freezing of Jordanian accounts and office premises of the Iraqi government-owned airline is particularly significant as Queen Alia Airport in Amman is used as the airline’s strategic and maintenance hub. Gooding estimates that by early June the airline will have been forced to cease operations. The Jordanian bank accounts alone are expected to contain more than $100m.

The threat of further assets being seized is likely to intensify after 30 June, when a restriction on the enforcement of proceedings against oil assets owned by the state of Iraq is due to be removed.

The Kuwait national carrier launched legal proceedings against its Iraqi counterpart in August 1990 – the case has been ongoing since then. Kuwait Airways is also trying to make the state of Iraq directly liable for the debts, allowing it to seize assets owned by other arms of the government. The latest round of asset seizures includes London bank accounts and commercial property owned by the Foreign Affairs Ministry.

“This is meant to serve as a wake-up call to Iraqi Airways and Iraq,” adds Gooding. “More enforcements against all types of Iraqi entities are coming.”

Iraqi Airways is also expected to receive additional planes from Canadian manufacturer Bombardier in the coming weeks, as part of a $5.5bn order by the Iraqi carrier from Bombardier and the US’ Boeing. Although delivery of the planes could potentially drag Bombardier into the legal dispute between the two Middle East carriers.

Iraqi Airlines did not respond to requests to comment.