Kuwait Airways Corporation v Iraqi Airways Company
| Jurisdiction | England & Wales |
| Judge | Henry,Brooke,Rix L JJ. |
| Judgment Date | 10 November 2000 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 November 2000 |
Court of Appeal (Civil Division).
Henry, Brooke and Rix L JJ.
Geoffrey Vos QC, Christopher Greenwood QC, Joe Smouha and Sam Wordsworth (instructed by Howard Kennedy) for the claimant.
David Donaldson QC and Stephen Nathan QC (instructed by Landau & Scanlon) for the defendant.
The following cases were referred to in the judgment of the court:
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Tort — Conflict of Laws — Conversion — Double actionability — Act of state — Causation — Defendant took over claimant's aircraft after Iraqi invasion of Kuwait — Whether defendant's acts in relation to aircraft amounted to usurpation under Iraqi law and conversion in English law — Whether defendant acquired title to aircraft by virtue of resolution of Iraqi Government — Whether recognition of resolution contrary to English public policy — What damages claimant could recover for conversion — Whether damage too remote.
These were appeals from judgments of Mance J ([1999] CLC 31) on liability and Aikens J ([2000] 2 All ER (Comm) 360) on damages in relation to the claimant's claim arising from the wrongful seizure of its aircraft at the start of the Gulf War.
In August 1990 Iraq invaded Kuwait. Ten aircraft belonging to KAC were removed from Kuwait to Iraq. The House of Lords ([1995] CLC 1065, [1995] 1 WLR 1147) held that the initial removal was an act of sovereign authority attracting state immunity. In September 1990 the Iraqi Revolutionary Command Council passed a resolution (Resolution 369) dissolving KAC and transferring the aircraft to IAC. Four of the aircraft were subsequently destroyed in air attacks on Iraq by coalition forces (“the Mosul four”). Six aircraft were sent for safety to Iran (“the Iran six”). In 1994 the Iran six were returned to KAC in return for a payment to Iran for the costs of keeping and maintaining them in Iran. KAC issued proceedings against IAC claiming delivery up of the aircraft and damages for unlawful interference. Mance J ([1999] CLC 31) at a trial of issues of liability held, as a matter of double actionability, that IAC's conduct in relation to the aircraft (such as repainting and re-registering them) constituted wrongful interference amounting to conversion in English law and “usurpation” in Iraqi law, and that the court would not recognise Resolution 369 as conferring any title to the aircraft on IAC. He further held that to recover under Iraqi law KAC had to show in relation to physical loss and damage that it would not have occurred “but for” IAC's wrongful interference with the aircraft, but that KAC could recover for other losses which naturally resulted from IAC's usurpation by keeping the aircraft.
Questions of causation, remoteness and quantum of damage were tried by Aikens J. He held ([2000] 2 All ER (Comm) 360) that the “but for” test applied under the English law of conversion as well as the Iraqi law of usurpation and that KAC could not show that “but for” any wrongful interference the aircraft would not have been destroyed. IAC appealed from the judgment of Mance J. KAC appealed from the judgment of Aikens J.
Held dismissing IAC's appeal against the judgment of Mance J, allowing in part the appeal of KAC against the judgment of Aikens J, and remitting the case to the Commercial Court:
1. Aikens J was right to find that Mance J held that the conversion consisted of the incorporation of the aircraft into the IAC fleet and that the specific acts (such as re-registration and repainting) relied on by KAC were indicative of that process. As soon as Resolution 369 came into effect IAC resolved to treat the ten aircraft as its own and to exercise dominion over them in denial of...
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