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Mon 30 May 2011 10:33 AM

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Iraqi Airways to fight asset freeze ruling in Jordan

Kuwait Airways seeking $1.2bn over planes, parts stolen during Iraq invasion in 1990

Iraqi Airways to fight asset freeze ruling in Jordan
A man walks past an Iraqi Airways logo on June 3, 2010 in Baghdad as the national airlines employees protest the states decision to close them down in the face of a decades-old financial dispute with Kuwait. AFP PHOTO/ALI AL-SAADI (Photo credit should read ALI AL-SAADI/AFP/Getty Images)

Iraqi Airways will appeal a court order to freeze its bank
accounts in Jordan following a lawsuit by Kuwait Airways Corp, Karim Al Nuri, a
spokesman for the Iraqi Minister of Transport, said.

“We are preparing to appeal the Jordanian court order,” he
said in a phone interview from Baghdad Sunday. “Our appeal is based on the fact
that Iraqi Airways is a state company and thus enjoys immunity and cannot have
its offices seized.”

The Iraqi national carrier’s offices in Amman were seized three
day ago and assets of $1.5m were frozen after the May 10 order by a Jordanian
court, he said.

State-run Kuwait Airways is seeking $1.2bn in compensation
for 10 aircraft taken when Iraq, under the rule of former President Saddam
Hussein, invaded Kuwait in August 1990. Kuwait Airways won a UK court order to
freeze the Baghdad- based airline’s global assets on April 25 last year, the
same day as an Iraqi Airways flight landed in London for the first time in 20
years.

The Iraqi government decided in May 2010 to dissolve Iraqi
Airways within three years because of the legal battle with Kuwait. The airline
has cancelled flights to Europe since last year and continues to fly to
destinations in the Middle East.

Iraqi Airways is planning to pursue negotiations with
Kuwaiti officials in order to find a solution to the conflict that would
benefit both parties, Al Nuri said.

The Iraqi airliner is also still considering government
plans to operate under a new company to avoid the legal dispute and
compensation claims raised by Kuwait, he said.

“We are considering some contracts with local and foreign
companies, although there is nothing final for now,” he said.

Kuwait Airways “seized multi-million dollar funds in various
Iraqi Airways bank accounts in Amman,” following the May 10 Jordanian court
order, Kuwait Airways lawyer Christopher Gooding of law firm Fasken Martineau
said in an emailed statement on May 24.

The claim is in addition to $40bn in debt amassed by Iraq
under the regime of Saddam Hussein. The country, holder of the world’s
fifth-largest crude reserves, is struggling to rebuild its damaged infrastructure
and continues to allocate five percent of its annual oil revenue to repay the
debt, roughly half of which it owes to Kuwait.

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