Kuwait MPs OK $500m Iraq Airways deal

Settlement between two countries relates to airplanes confiscated during first Gulf war

(AFP/Getty Images)

(AFP/Getty Images)

Kuwaiti MPs have ratified a US$500m settlement deal between the Gulf state and Iraq's national airline, bringing to a close a debt dispute ongoing since the first Gulf War.

As part of the deal reached in July, Iraq Airways agreed to pay US$500m in compensation to Kuwait Airways for damages caused by Iraqi troops during the 1990-91 invasion of Kuwait.

Kuwait’s Communications Minister Salem Al Othaina, said in comments published by state news agency KUNA, that the “Iraqi government has shown goodwill and deposited all the claim funds agreed” to a special bank account.

Iraqi Airways director general in December said the deal will allow the carrier to begin flights to the UK and Frankfurt by the end of January. The airline will also start a three-year programme to train 500 pilots and build the largest air training and development institute in the region, said Saad Al Khafaji.

Kuwait Airways had initially sought US$1.2bn from Iraq for the ten jets that were taken by Iraqi forces during the invasion of Kuwait. Two-and-a-half years ago, the airline won a court order in the UK that led to the freezing of Iraqi Airways’ global assets.

Kuwait Airways ceased legal action against Iraqi Airways after a deal on compensation was reached in July and endorsed by the oil-rich Gulf state’s emir in October.

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