Kuwait Airways Corporation –v- Iraqi Airways Company. Bank accounts seized in Jordan and London

In co-ordinated enforcement proceedings, following on from permission granted earlier this year by the High Court to join the State of Iraq, The Ministry of Finance and Ministry of Transport to the proceedings, the High Court in London on Friday 13th May issued a number of enforcement measures against shares and London bank accounts in the name of Trade Bank of Iraq, London accounts in the name of Rasheed Bank and against commercial property owned by the Ministry of Foreign Affairs of Iraq. All three parties were also joined to the action.

These are the latest developments in Kuwait Airways Corporation's legal fight to obtain compensation from IAC for the theft of its fleet and spare parts in the 1990 invasion of Kuwait.

The dispute between KAC and IAC has been the longest running commercial case in the history of the English Courts, mainly due to a series of findings of perjury against IAC which led to an overthrowing of twelve years of previous decisions. Judgments have been given against IAC on the correct facts, totalling some $ 1.2 billion and against the State of Iraq in respect of its financial support and direction of the action for $ 80m.

Christopher Gooding, of Fasken Martineau, London, has represented Kuwait Airways since the 3rd August 1990, the day after the invasion of Kuwait by Iraq. Commenting on these dramatic developments, he said:

"This marks the latest move in a sequence of planned enforcement proceedings which has been forced on KAC by the total lack of movement towards any meaningful negotiations by the State of Iraq and Iraqi Airways.

The enforcement is of English final judgments given in proceedings in which IAC was fully represented and, in the case of the spares action, enforced in Jordan, admitted liability.

Iraqi Airways has been repeatedly warned that it will be forcibly denied the skies unless and until it pays its obligations to KAC. Today's developments should act as a wake-up call for Iraqi Airways and Iraq. The orders in the English Courts were based on arguments which treat the distinction between airline and State as illusory. Enforcement against Iraqi State assets will continue and the range of those assets available for attachment will expand after 30th June.

I have said many times before that it is not the intention of KAC to take aggressive action for its own sake, but, in the absence of any meaningful dialogue, Iraqi Airways and Iraq can expect further decisive action to be taken worldwide without further warning. KAC has a duty to protect Kuwaiti public funds and to ensure that Iraqi Airways' $1.2bn judgment debt is paid in full."