The 19-year-old Kuwait Airways (KA) versus Iraqi Airways litigation case – the longest in aviation history – reached a compromise yesterday, allowing Iraqi Airways to take delivery of its aircraft from Bombardier in return for a letter of credit issued by JP Morgan, London.

If the breach of order case, currently pending in Canadian courts, is ruled in Kuwait Airways' favour, the insurer would pay the value of the aircraft to the GCC carrier.

"The letter of credit has been already issued, which allowed Iraqi Airways to take possession of the Bombardier aircraft. As far as we know, the plane has already taken off for Iraq," Kuwait Airways lawyer, Christopher Gooding of Fasken Martineau, told Emirates Business from London. "The case is currently pending in Canadian courts and we are awaiting verdict on the matter."

Despite repeated attempts, this newspaper was unable to contact representatives for Iraqi Airways.

For nearly two decades, Kuwait Airways has been seeking restitution from Iraqi Airways, following former president of Iraq Saddam Hussein's invasion of Kuwait in 1990. According to Gooding, during the invasion, Hussein's troops seized 15 aircraft, comprising Airbus and Boeing planes, and added them to Iraq's fleet after repainting them. Of the 15, six of these aircraft were sent to Iran for safekeeping, while four were bombed by US forces.

"Adding the Kuwait Airways aircraft to Iraq's fleet was an act meant purely for commercial gain. We sued the carrier in London for rightful claim, [because Iraqi Airways' Heathrow operations were listed there] and won the case in the House of Lords it was proven they committed perjury," said Gooding.

The lawyer said they found documentation in Fallujah, Iraq, that revealed the aircraft rightfully belonged to Kuwait, along with further documentation proving the stolen parts also belonged to the GCC carrier.

House of Lords ruled in the favour of Kuwait Airways, awarding the airline $1.2 billion (Dh4.4bn) in compensation. Kuwait Airways also lays claim of $83.5m against the State of Iraq.

"Now, the objective is to obtain the money," said Gooding.

Last year, the Kuwait Airways' litigation team learnt about a pending order from Bombardier and Boeing aircraft for Iraqi Airways and the State of Iraq, and sought seizure of 10 aircraft from the former Canadian-based manufacturer, worth $280m, according to media reports.

"We were also able to prove the $45m state contract with the government of Iraq was a sham," he said. "As recognised by US advisors to the Iraqi Ministry of Transport in the past, the difference between IAC and the Department of Transport is illusory and the idea that IAC can disassociate itself from flights under its colours merely by virtue of chartering in the name of some other organ of the State is absurd. All such avoidance devices are being investigated and assets seized"

Gooding added: "Kuwait Airways has, over many years, made its position very clear. Iraqi Airways assets will be seized in any and all jurisdictions where enforcement of its judgments is possible. Iraqi Airways has made no sensible attempt to address the issue of satisfying its responsibilities amicably and has left Kuwait Airways no other choice."

As the case continues in Canadian courts, the United Nations Compensation Commission, which was set up after the Gulf War, has so far paid $28.2 billion to the victims of the Iraqi invasion of Kuwait. The money has come from the proceeds of Iraq's oil and gas sales.

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