Case Results

$1.2 Billion Judgment Against Iraq Resolved

The Firm’s international practice played a historic role in successfully resolving a 21-year, $1.2 billion dispute between the Firm’s clients, the Republic of Iraq and Iraqi Airways Company on the one hand, and Kuwait Airways Corporation and the Emirate of Kuwait. The dispute arose in August 1990 when Iraq, then under the control of former President Saddam Hussein, invaded Kuwait and seized the entire fleet of Kuwait Airways commercial aircraft and delivered them to Iraqi Airways. Kuwait Airways obtained a judgment against the Republic of Iraq and Iraqi Airways for $1.2 billion.

During the period of economic sanctions imposed on Iraq by the United Nations, Kuwait Airways was unable to collect its judgment of $1.2 billion. In 2008, Iraq engaged Maggs & McDermott to defend against the asset seizure actions of Kuwait Airways which had been commenced in nine different countries, including the United Kingdom, Canada, Germany, Jordan, Egypt and Lebanon.

After litigation in Canada and England, the Iraqi and Kuwaiti parties determined to attempt to settle the matter once and for all through an “all-hands” 10-day long settlement summit. The Iraqi Prime Minister Al-Malaki requested Mr. Mills of Maggs & McDermott, and the Firm to serve as the principal international legal advisor to Iraq and Iraqi Airways during the settlement process. The matter was finally resolved through Iraqi Airway’s payment to Kuwait Airways of $500 million. As a consequence of resolution of the decades-long dispute, Iraqi Airways no longer was encumbered with world-wide liabilities and asset-seizure litigation, enabling Iraqi Airways to resume international airway service.

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