Kuwait Airways Corporation (Plaintiff) v Iraqi Airways Company (body Corporate)
| Jurisdiction | England & Wales |
| Judgment Date | 07 April 2000 |
| Judgment citation (vLex) | [2000] EWHC J0407-13 |
| Date | 07 April 2000 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | 1991 Folio No: 69 |
[2000] EWHC J0407-13
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Hon Mr Justice Aikens
1991 Folio No: 69
Nicholas Chambers QC, Christopher Greenwood QC, Joe Smouha and Sam Wordsworth, instructed by Howard Kennedy, appeared on behalf of the Claimant.
David Donaldson QC and Stephen Nathan QC, instructed by Landau & Scanlan, appeared on behalf of the Defendants.
I direct pursuant to CPR Part 39 P.D. 6.1. that no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
The Hon. Mr. Justice Aikens
INDEX
| No. | Title | Pages | Paras |
| A | AN OUTLINE OF THE FACTS: PARAS 1 - 14 | ||
| (i) | The invasion and removal of the KAC Aircraft | 1 - 2 | 2 - 4 |
| (ii) | The destruction of the Mosul Four | 2 | 5 |
| (iii) | The removal of the Iran Six to Mashad, Iran | 3 | 6 - 7 |
| (iv) | The recovery of the Iran Six | 3 - 4 | 8 |
| (v) | The decision to replace the destroyed and detained aircraft | 4 - 5 | 9 - 12 |
| (vi) | The disposal of the Iran Six | 5 | 13 - 14 |
| B | THE PROCEDURAL HISTORY: PARAS 15 - 29 | ||
| (i) | The Jurisdiction and "Justiciability" challenged | 5 - 7 | 15 - 20 |
| (ii) | The determination of Liability Issues by Mance J | 8 - 11 | 21 - 29 |
| C | THE CLAIMS BY KAC AND IAC'S DEFENCES: THE ISSUES: PARAS 30 - 39 | ||
| (i) | KAC's case on causation, measure of damages and remoteness | 11 - 14 | 31 - 36 |
| (ii) | KAC's Five Heads of Claim | 14 - 16 | 37 |
| (iii) | IAC's defences in outline | 16 - 19 | 38 - 39 |
| D | THE CAUSATION TRIAL AND THE ISSUES TO BE DEALT WITH IN THIS JUDGMENT: PARAS 40 - 44 | ||
| (i) | The Trial | 20 - 23 | 40 - 43 |
| (ii) | Order of dealing with issues | 23 - 26 | 44 |
| E | GENERAL PRINCIPLES OF ENGLISH LAW ON CAUSATION: "NEW INTERVENING EVENT" AND REMOTENESS OF DAMAGE: PARAS 45 - 86 | ||
| (i) | Do the general rules on causation "in fact" in tort apply to the tort of wrongful interference in goods? | 28 - 31 | 49 - 57 |
| (ii) | How should the Court approach the issue of causation "in fact"? | 31 - 33 | 58 - 62 |
| (iii) | What is the proper test when considering whether there has been a "new intervening event"? | 34 - 35 | 63 - 67 |
| (iv) | When considering the issue of "remoteness" in relation to the tort of wrongful interference with goods, should the test be whether the damage claimed is the "direct" or "direct and natural" result of the interference, or is the general test one of foreseeability? | 36 - 43 | 68 - 86 |
| F | THE PROPER APPROACH TO THE FACTS ON CAUSATION: PARAS 87 - 94 | ||
| (i) | What constitutes the wrong interference or "usurpation"? | 43 - 44 | 88 - 89 |
| (ii) | How should the Court regard Resolution 369 and any directions given by the Iraqi government to IAC when considering what would have happened "but for" the wrongful interference or "usurpation" of IAC? | 44 - 45 | 90 - 91 |
| (iii) | Which Iraqi entity would have been in control of the KAC fleet if not IAC as from 17 August or 17 September 1990? | 45 - 46 | 90 - 91 |
| (iv) | Should the court ignore all that IAC did between 17 August and 17 September 1990 when approaching the issue of where the aircraft would have been "but for" the "usurpation" or wrongful interference? | 46 - 47 | 93 - 94 |
| G | THE ISSUES OF FACT ON THE MOVEMENT OF ALL TEN AIRCRAFT BETWEEN 17TH AUGUST 1990 AND 15 JANUARY AND THEREAFTER: PARAS 95 - 117 | ||
| (i) | The Aircraft and the Airfields | 47 - 51 | 95 - 106 |
| (ii) | Where were the ten KAC Aircraft actually positioned between 17 August 1990 and 17 November 1990? | 51 - 58 | 105 - 115 |
| (iii) | Actual movements of the KAC aircraft after 17 November 1990 | 58 - 59 | 116 - 117 |
| H | THE APPLICATION OF THE "BUT FOR" TEST IN IRAQI LAW AND ENGLISH LAW: WHERE WOULD THE KAC AIRCRAFT HAVE BEEN PLACED "BUT FOR" THE USURPATION OR WRONGFUL INTERFERENCE BY IAC: PARAS 118 - 177 | ||
| (i) | The basis for making findings on this issue | 59 - 61 | 118 - 122 |
| (ii) | Findings on where the KAC aircraft would have been "but for" the usurpation by IAC by incorporating the aircraft into its fleet | 61 - 71 | 123 - 144 |
| (iii) | Conclusions on where the aircraft would have been positioned at the outset of hostilities "but for" the usurpation by IAC | 71 | 145 |
| (iv) | Would the disposition of the aircraft be any different if it is only permissible to consider the movement of KAC aircraft on or after 17 September 1990? | 72 | 146 |
| (v) | Evacuation of the KAC aircraft around the start of hostilities | 72 - 80 | 147 - 167 |
| (vi) | What would have been the fate of the "Mosul Four" if, "but for" the IAC usurpation, they had still been at Mosul on 15 January 1991 and thereafter? | 80 - 81 | 168 - 170 |
| (vii) | Conclusion on the likely movements of the ten KAC aircraft "but for" the usurpation of IAC | 81 | 171 |
| (viii) | Overall conclusion on the fate of the KAC aircraft up to the end of the hostilities "but for" the usurpation of IAC | 82 | 172 |
| (ix) | The detention of the Iran Six by Iran after the hostilities ended | 82 | 173 |
| (x) | Causation in English and Iraqi Law: the consequences of the conclusions reached | 82 - 83 | 175 - 177 |
| I | THE CLAIM FOR THE VALUE OF THE MOSUL FOUR: PARAS 178 - 191 | ||
| (i) | The destruction of the Mosul four: the valuation issue: Fair Market Value or Current Market Price? | 84 - 85 | 179 - 184 |
| (ii) | The cases and the applicable legal principles | 85 - 87 | 185 - 188 |
| (iii) | Applications of the principles to this case | 87 - 88 | 189 - 191 |
| J | CLAIM FOR THE LOSS AND DAMAGES RESULTING FROM THE DETENTION OF THE IRAN SIX: PARAS 192 - 207 | ||
| (i) | Can KAC established that "but for" the wrong interference by IAC of the Iran Six they would not have been detained in Iran? | 88 | 192 - 193 |
| (ii) | Was the detention of the Iran Six in Iran the "direct" or "natural" or "direct and natural" or foreseeable consequence of the relevant wrongful interference with the aircraft or was it the result of one of more "new intervening event" | 89 - 91 | 194 - 199 |
| (iii) | Claims under Head B: Was the $20 million payment Iran by KAC a loss that was caused by the wrongful interference by IAC | 91 | 200 |
| (iv) | If so is the claim for US$20 million too remote to be recovered by KAC | 91 | 201 |
| (v) | Head D: the "taint" claim. Has KAC suffered any loss because the Iran Six were "tainted" by their detention in Iran | 92 - 93 | 202 - 206 |
| (vi) | Was the "taint" damage caused by the wrongful interference by IAC: even if so, is the damage too remote to be recoverable by KAC | 93 | 207 |
| K | THE CLAIMS FOR LOSS AND DAMAGE THAT RELATE TO ALL TEN AIRCRAFT: PARAS 208 - 235 | ||
| (i) | In relation to the Mosul Four, is KAC entitled to make any recovery at all for: (a) loss of use; and (b) additional costs borne by KAC to provide substitute capacity, even if KAC has satisfied all other requirements on causation | 94 - 97 | 208 - 218 |
| (ii) | Is KAC entitled in principle to recover the loss of additional net income from cargo carriage in relation to the Iran Six | 97 - 98 | 219 - 220 |
| (iii) | Is KAC entitled in principle to recover the costs of additional cargo capacity and additional short term passenger capacity in relation to the Iran Six | 98 - 99 | 221 - 224 |
| (iv) | Claims under Head E sub head (d): claims for the additional finance costs and the "higher depreciation costs" said to arise from the early replacement of the Mosul Four and Iran Six. | 99 - 103 | 225 - 236 |
| L | SUMMARY OF CONCLUSIONS: PARA 237 | 103 - 106 |
Appendix One: Schedule of KAC Aircraft and their particulars
Appendix Two: Map of Iraq
Appendix Three: Mosul Four: Valuation Figures: "Fair Market Value" and "Current Market Price"
This is the third stage of an action by Kuwait Airways Corporation ("KAC") against Iraq Airways Company ("IAC"). KAC claims damages of over US $800 million for losses that it says it has suffered as a result of the wrongful interference by IAC with ten KAC aircraft following their removal by Iraq from Kuwait International Airport in August 1990. Preliminary points on issues of sovereign immunity and jurisdiction have already been contested up to the House of Lords. It held 1 that IAC could rely on sovereign immunity in respect of its actions concerning the ten KAC aircraft up to 17 September 1990, but not in respect of tortious actions (if any were to be found) thereafter. The case was then remitted to the Commercial Court. On 29 July 1998 Mance J (as he then was) delivered a judgment on various issues of liability. He found that IAC had wrongfully interfered with the ten aircraft, both as a matter of English and Iraqi law. 2 Mance J ruled that all issues of causation and damages should be held over until a further trial. The hearing before me has concerned a number of those issues. However certain substantial claims were not dealt with but left for a fourth round.
A An Outline of the facts
(i) The Invasion and removal of the KAC aircraft
On 2 August 1990 Iraq invaded Kuwait by force. Despite initial resistance the occupation was swift and was complete by 5 August. On 8 and 9 August the Revolutionary Council of Iraq ("the RCC") passed Resolutions 312 and 313. They proclaimed the sovereignty of Iraq over Kuwait and its annexation to Iraq. Subsequently various Presidential Decrees of the government of Iraq designated Kuwait a "Governate" within Iraq and appointed a Governor of the "Governate of Kuwait".
When the invasion took place there were ten civil aircraft belonging to KAC standing at Kuwait International...
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