Iraqi Airways CRJ900s Still in Limbo

 - January 21, 2011, 11:00 AM

The Court of Appeals of Quebec on January 11 summarily dismissed appeals by the state of Iraq and Iraqi Airways in the 20-year-old legal case brought by Kuwait Airways seeking damages for Iraq’s seizure of 10 airplanes and associated spares and records during its 1990 occupation of Kuwait. The case continues to prevent Bombardier from delivering the final six of an order for 10 CRJ900s placed by the government of Iraq in 2008.

Kuwait Airways now holds judgments totaling more than $1.2 billion against Iraqi Airways and $83.5 million against the state of Iraq. Kuwait Airways last year seized Iraqi Airways and state of Iraq interests in an order of new CRJ900s from Bombardier. Representatives of Kuwait Airways refer to the formal contract between the Ministry of Finance of Iraq and Bombardier as a “sham” and contend that the actual contract exists between Iraqi Airways and Bombardier. That fight continues in the Canadian courts.

“The case against the state of Iraq has been up to the Supreme Court [of Canada] and the Supreme Court found they were not allowed to plead state immunity last year,” said Christopher Gooding of the international law firm Fasken Martineau and the lawyer representing Kuwait Airways since Aug. 2, 1990. “That case is continuing, and it’s pretty simple. They owe us $80 million.

“In the Iraqi Airways action, we say that albeit that [it] subsequently turned out that contract was in the name of the state of Iraq, it was [for] the benefit of Iraqi Airways,” Gooding told AIN. “Therefore we should be able to enforce against those assets as well. So that’s the trial issue.

“Now the way is free for us to proceed with the central issue, which is, was this what they call in Quebec a prête-nom situation, where the state of Iraq was fronting, we say totally cynically, for Iraqi Airways.”

Due to appear in court again early in the week of January 17 “to try to get directions for the trial and push as fast as possible against the state of Iraq for enforcement,” Gooding told AIN that he expected the case to go to trial in the summer.

Of the four CRJ900s in Iraqi Airways’ possession, three were released against a letter of credit provided by the state of Iraq and one was transferred in breach of a court order, claimed Gooding. “Proceedings will follow in respect to that aircraft against Bombardier,” he said.