Iraqi Airways continues to fly to Amman, Damascus, Istanbul, Tehran and Dubai.
Iraqi Airways continues to fly to Amman, Damascus, Istanbul, Tehran and Dubai.

Dissolved airline flies on regardless



Compared with other Gulf airlines, with their seat-back movies and e-mailed boarding passes, flying with Iraqi Airways is an unusual passenger experience.

Its jets carry no logos and there are no assigned seats. Tickets are written out by hand by local travel agents and, upon arriving at their destination, passengers must locate the relevant sales office to obtain return tickets.

Yet Iraqi Airways flights leave daily from Dubai to Baghdad, which is surprising to some, considering the company was officially dissolved by the Iraq government eight months ago.

The unlikely endurance of Iraq's national carrier is the latest chapter in a two-decade legal battle between Iraq and Kuwait over the alleged theft of 10 aeroplanes and spare parts during the First Gulf War in 1990.

As Iraq emerges from its war-torn past with a goal to become the next burgeoning frontier market, in part through airport construction and infrastructure improvements, the dispute demonstrates that the country has yet to fully break free from liabilities carried over from the Saddam Hussein era.

The saga began days after Iraq's invasion of Kuwait in 1990, when Saddam ordered that the Kuwait Airways fleet be placed under the control of Iraqi Airways. When the UN military forces invaded Iraq, four of Kuwait's aircraft that had been moved to Mosul in the north of Iraq for safety reasons were destroyed, while six were flown to Iran.

After the war, Kuwait sued the Iraqi carrier in Britain, choosing that jurisdiction because Iraqi Airways had an office in the UK.The aircraft at the centre of the case became known as the "Mosul Four" and "Iran Six".

Between 2002 and 2009, the UK courts issued 38 judgments on behalf of Kuwait Airways, including financial awards totalling US$1.2bn (Dh4.4bn), according to Christopher Gooding, Kuwait Airways' lawyer in London. The Iraqi government has rejected these decisions, arguing that it is already burdened by high war reparations, which currently stand at $24bn, according to Kuwaiti officials.

"The Kuwaiti position has been absolutely identical for the past 20 years, and the Iraqi position of hope over reality has continued to be exactly the same," Mr Gooding said.

Last year, the Supreme Court of Canada found that Iraq was not entitled to plead state immunity when Kuwait Airways sought to enforce the British judgments in the Canadian courts. And two weeks ago, on the 20th anniversary of the case, the Quebec Court of Appeals dismissed Iraq's procedural challenges to the seizure of the aircraft.

The Kuwaiti carrier has attempted to seize planes ordered by the Iraqi government, but it is still not clear whether it will ever be able to collect the financial judgments against the country.

"We hope we can resolve this issue by finding a meaningful solution with our Kuwaiti brothers, cancel these debts and find a way not to dissolve the company," said Nasser al Bandar, the manager of the aviation department at the ministry of transport in Baghdad.

In addition, Iraqi Airways is using leased planes and none of the 10 planes at the core of the dispute, according to Aqeel Kawthar, a spokesman for the airline.

He said officials of the company believed it was within its rights to continue operating. "We have no issues," he said. "Dissolving the company cannot happen in a day or night. We are looking at a timeline of two years."

Iraqi Airways continues to fly to Amman, Damascus, Istanbul, Tehran, and Dubai, in addition to its domestic service. In the meantime, the legal standstill is preventing Bombardier from delivering six of 10 jets ordered by the Iraq government. Only four have been delivered so far.

"Bombardier wants to resume delivering aircraft to our customer, the government of Iraq, however we find ourselves in the middle of a dispute that prevents us," said John Arnone, the media and public relations manager at Bombardier in Toronto.

Just as other Gulf states have used airlines as an important driver of economic growth, a national carrier is important to Iraq's economic rebuilding.

It could play a particularly important role in bringing pilgrims to the holy shrines in Iraq and allow the country to become a key player in the region's booming religious tourism industry, said Dr Mustapha Alani, the programme director at Gulf Research Center in Dubai.

Lawyers say one reason the airline continues to fly freely to Dubai and other parts of the region is that there is no automatic reciprocal enforcement of UK judgments.

"Therefore the bringing of a claim against Iraqi Airways in such a Gulf state brings with it risks of unsuccessful litigation," said Angelique Watkins at the law firm Al Tamimi and Company in Dubai.

In addition, because Iraq is not part of the GCC, and thus not subject to the GCC's Reciprocal Enforcement Treaty among member states, any judgment obtained in Kuwait or another GCC country would not be enforceable in Iraq, Ms Watkins said.

The stalemate shows no signs of concluding.

For the time being, for those who do not mind fighting for an aisle seat, passengers are still able to fly Iraqi Airways. Assuming, of course, they can find an agent with a pen to fill out their tickets.

igale@thenational.ae

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