Letters of credit (L/Cs) are guaranteeing that Kuwait will finally be paid for airlines seized when it was invaded by Iraq in 1990 if it wins an upcoming court case in Canada.

The L/Cs feature in what has become Britain's longest running commercial court case.

Planes seized

In 1990, invading Iraqi forces seized 10 aeroplanes owned by Kuwait Airways for Iraqi Airways Co.

In 1991, just as the US-led coalition forces embarked on the Gulf War to liberate Kuwait, lawyers for the Kuwaiti airline in London filed a lawsuit demanding restitution.

Unpaid awards

Judgments in London awarded Kuwait Airways US$1.2-billion in compensation and US$84-million in legal costs, which remain unpaid.

Lawyers for the airline then tried to seize four planes ordered by the Iraqis from Canada's Bombardier Aerospace.

Canadian moves

Thus, the legal proceedings moved to Canada, where Quebec Court of Appeal recently overruled an original finding in favour of the Iraqis.

The appeal court has now sent the case back to where it was originally heard in Canada, Quebec Superior Court.

If Kuwait Airways wins this case it is confident that it will be paid, since L/Cs from Iraq are guaranteeing that the airline will be paid if it wins its Canadian court case.

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