Iraq Says Won’t Pay Kuwait Before Airline Lawsuit Dropped

Iraq will not pay Kuwait Airways Corp. compensation for a debt dispute before Kuwait drops legal claims against Iraqi Airways, according to Ali al-Allaq, general secretary of the Cabinet.

The two neighboring countries reached an agreement in March to resolve the airline dispute under which Kuwait would abandon all lawsuits against Iraqi Airways in return for Iraq paying $500 million, he said in an interview in Baghdad today. Kuwait has yet to drop the claims in court, he said.

State-run Kuwait Airways has been seeking $1.2 billion in compensation for 10 aircraft taken during former Iraqi President Saddam Hussein’s invasion of Kuwait in 1990.

To contact the reporter on this story: Khalid Al-Ansary in Baghdad at kalansary@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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