Date: 10/10/2008 7:05 PM
By CHARMAINE NORONHA
Associated Press Writer
TORONTO (AP) _ Bombardier Inc. is trapped in the middle of a protracted legal battle between former enemies Iraq and Kuwait, as Kuwait Airways seeks to get its hands on 10 aircraft that Iraq commissioned from the Canadian plane maker.
The Montreal-based company is denying that it defied a court order barring deliveries of planes to Iraq, arguing that it sent one plane to Iraq after the court order was lifted last week but before it was effectively reinstated after Kuwait Airways appealed.
The Bombardier case is part of a larger effort by Kuwait to force Iraq to pay reparations after Iraq invaded the tiny kingdom in 1990. As part of that case, Kuwait Airways claims it is owed $1.2 billion in judgments dealing with Iraqi Airways to compensate it for aircraft and equipment stolen during the Iraqi invasion and is seeking to take over the planes as partial payment.
The Kuwaiti airline also says it is owed an additional $83.5 million in legal costs after a British court — where the original reparations case has largely been playing out — ruled that the Iraqi airline had perjured itself and ordered it to pay the money to its Kuwaiti counterpart.
The findings of perjury led to 12 years of previous decisions being overthrown and the case continues, lawyers for Kuwait Airways said, making it the longest running commercial case in the history of the British courts. Kuwait Airways has argued that the Iraqi government is liable for the airline because it owns it.
Hoping to recoup some of the money, Kuwait Airways secured a Quebec Superior Court order in August allowing it to seize the aircraft that Iraqi Airways had recently commissioned from Bombardier, said Christopher Gooding, a lawyer with the London law firm Howard Kennedy. His firm has represented Kuwait Airways since the day after the invasion of Kuwait.
However, Quebec Superior Court Justice Paul Chaput lifted the order on Oct. 1 after the Iraqi government argued that no Canadian court has jurisdiction in the case because it involves a foreign government. Gooding said that the order was lifted as far as the state of Iraq was concerned, but remained in effect for the Iraqi airline.
The ruling was suspended on appeal on Wednesday.
Lawyers for Kuwait Airways now are accusing Bombardier of transferring the plane despite the suspension of judgment pending the resolution of the appeal.
Under the original agreement, the remaining nine planes are to be delivered to Iraq through the rest of the year and into 2009.
Bombardier spokesman John Arnone said that the plane maker was not in violation because the company had been dealing directly with the Iraqi government and not the airline and the aircraft was delivered before the appeal was filed.
Gooding, however, said Kuwait Airways is owed the planes and was prepared to seize them if they fly to “a suitable jurisdiction.” Arnone said the plane in question was in Iraq.
Neither Gooding or Arnone would comment further.
The Quebec Court of Appeal is scheduled to hear a motion from Kuwait Airways on Oct. 20.
Copyright 2008 The Associated Press.