Iraqi Airways Gets Two More CRJ900s

 - August 3, 2011, 11:04 AM

Bombardier delivered a pair of CRJ900s into Iraqi Airways service in July, following an Iraqi payment of security equal to the value of the aircraft to Kuwait Airways. The Canadian manufacturer has now delivered six of the 10 CRJ900s originally ordered by Iraq and, according to a Bombardier spokesman, continues to work toward delivering the remaining four.

The Iraqi security payment to Kuwait Airways relates to Kuwait Airways’ efforts to obtain compensation from Iraqi Airways and the state of Iraq for the theft of its fleet and spare parts during Saddam Hussein’s 1990 invasion of Kuwait. Kuwait Airways now holds judgments–won in a British court–totaling more than $1.2 billion against Iraqi Airways and $80 million against the state of Iraq, stemming from a finding that the country had financed Iraqi Airways and controlled the litigation from the start. It therefore carries responsibility for financing the costs of the claimant, explained the lead attorney representing Kuwait Airways, Christopher Gooding of the international law firm Fasken Martineau.

The $1.2 billion, meanwhile, covers 14 judgments of the English courts, Gooding told AIN today, including the loss of the aircraft destroyed while in Iraqi hands, repair of damages to returned aircraft, the consequential loss of spares and their records. While Iraqi Airways claimed state immunity, the English House of Lords found that its incorporation of the Kuwaiti airplanes into its fleet constituted a commercial rather than a sovereign act, explained Gooding, in effect making Iraqi Airways liable. Consequently, the CRJ900s became subject to seizure to enforce the judgments.

However, after 21 years, Kuwait Airways must now wait until the fall for a Quebec court to hear the case to determine enforcement of the judgments. Yet another action begun this year in England by Kuwait Airways’ lawyers seeks a declaration that the UK courts rule all of the assets of the state of Iraq available for enforcement of the judgments. “We say as a matter of enforcement, Iraqi Airways is so close to the state of Iraq, that it is the state of Iraq for enforcement purposes, and therefore the assets of the state of Iraq are available for enforcement of a judgment against Iraqi Airways,” argued Gooding. He expects that case to go to trial at the end of next year or possibly in early 2013. All told, Fasken Martineau has launched proceedings in 15 countries, said Gooding.

“It’s a big net we’re casting,” said Gooding. “We’re interested in any money wherever it arises.”

“We have absolutely no argument with Bombardier,” he added. “They’re as much innocent parties in all this as we see ourselves being. But they’re clearly stuck in the middle and anything we can do to help them deliver aircraft we’re delighted to do.”

In that spirit, Gooding expressed satisfaction with the latest delivery of the pair of CRJ900s. “My clients are delighted at this development,” said Gooding in a statement. “Our clients’ position is secured fully–effectively Iraq has paid for these aircraft twice, once to Bombardier and again in security for KAC [Kuwait Airways Corporation]. As we have always said that there is no intention, subject to enforcement of judgment rights, to limit the growth of Iraqi Airways or in any way limit the ability of the Iraqi people to travel freely. KAC will continue to pursue compensation whenever opportunities arise. We are pleased to see Iraqi Airways fleet and income grow to enable it to satisfy the judgments against it.”