Talks to resolve Iraq-Kuwait airline dispute stall

05 November 2008
Baghdad claims that negotiations over resolving its aviation dispute with Kuwait have stalled over guarantees for the cash settlement.

A $500m offer from Iraq remains on the table to settle the long-standing row stemming from aircraft and equipment stolen during the 1990 Iraqi invasion of Kuwait.

Kuwait Airways has previously demanded $1.2bn in compensation for the loss, but the two sides have appeared close to agreeing on the $500m cash settlement.

However, Iraq says Kuwait is now demanding an international bank guarantee that the money will be paid next year. Baghdad claims it cannot raise the money until the 2009 national budget has been approved by parliament (MEED 9:10:08).

“We made an offer for $500m, they accepted. Since then they have been very difficult about guaranteeing the money. They want a bank guarantee from an international bank. It does not make sense. The commitment of the Iraqi government should be enough,” says a source in Baghdad.

Kuwait Airways and its representatives were not available for comment. Publicly it has maintained that it still expects to receive $1.2bn.

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