Kuwait Airways Corp v Iraqi Airways Corp

In Action 1991 Folio No 69, the claimants (“KAC”) sought damages from the defendants (“IAC”) amounting to something over $800 million for losses allegedly sustained as a result of the wrongful interference by IAC with ten KAC aircraft by reason of their removal from Kuwait International Airport in August 1990 and their subsequent retention.

A preliminary issue arose as to whether IAC was entitled to sovereign immunity by virtue of section 14(2) of the State Immunity Act 1978. This issue reached the House of Lords in January 1995. Their Lordships concluded that IAC was entitled to immunity in respect of its acts in taking and removing the aircraft from Kuwait, but (by a majority) that IAC was not covered by state immunity in respect of the retention and/or use of the aircraft after Resolution 369 of the Revolutionary Command Council of Iraq (which purported to dissolve KAC and transfer all its assets to IAC) came into effect on the 17^th September 1990.

In May 2000, KAC petitioned the House of Lords for a variation of their earlier order so as to deprive IAC of the benefit of sovereign immunity in respect of the period between the 9^th August 1990 (when most of the aircraft had been flown into Iraq proper from Kuwait) and the 17^th September. The basis of the petition was that, in the light of documentary material produced in the action since 1995, it was clear that the factual basis for the decision of the House of Lords depended upon false and perjured evidence deployed by IAC.

In particular, KAC contended that IAC’s earlier evidence that the acts done in the period from the 9^th August to the 17^th September 1990 were limited to basic maintenance, and thus were of no significance, was false and had been given with the intention of deceiving the court. It was said that the new material established that elaborate steps had been taken during that period, on the instructions of the highest levels of the government, to transfer the aircraft to IAC so that they could be absorbed as part of IAC’s fleet. This was evidenced, it was submitted, by the measures taken by IAC, as revealed by the newly disclosed material, to paint, insure and register the aircraft, as well as engage engineering staff, all with a view to their commercial use on the Baghdad-Kuwait route by early September.

Their Lordships concluded ([2001] 1 WLR 429) that, whilst the issues raised in the petition were “prima facie relevant, serious and substantial”, it was not appropriate

On the 2^nd August 1990, Iraq invaded Kuwait. The occupation was complete on the 5^th August. On the 8^th/9^th August, the Revolutionary Command Council of Iraq, under the Chairmanship of President Saddam Hussain, passed Resolution 313 proclaiming the sovereignty of Iraq over Kuwait and its annexation into Iraq. Resolution 312, made the same date, provided :-

At the time of the invasion, there were ten civil aircraft belonging to KAC standing at Kuwait International Airport. These ten aircraft consisted of eight Airbuses (5 type A310 – 200 and 3 type A300 – 600) and two Boeing 767’s. On the 6^th August 1990, the Iraqi Minister of Transport and Communications, Mr Mohammed Hamza Al-Zubaidi (“Mr Al-Zubaidi”), instructed Mr Nor Aldin Saffi (“Mr Saffi”), the Director General and Chairman of the Board of the IAC, that he should arrange to fly these ten aircraft to Iraq for “safe keeping”.

Pursuant to that order, all but one of the aircraft were flown to Basra. Airbus AHI (which was in Egypt air livery) was under repair and did not leave Kuwait until the 22^nd August when it was flown direct to Baghdad. By the 17^th August some of the nine aircraft that had already been flown to Basra were redeployed to Mosul and Tekrit. By the end of August, following further movements, all 10 were deployed at three bases, namely Baghdad, Basra and Mosul. By November, four of the aircraft (two Airbuses and two Boeings) were at Mosul, still in their KAC livery. The remaining six were by then all at Baghdad: the extent to which any of them had been repainted by mid-September was a matter of great controversy.

In the meantime, the Revolutionary Command Council had passed Resolution 369. It was passed on the 9^th September and came into force on the 17^th September. It provided as follows:-

Military action by coalition forces began on the 17^th January 1991. By this time the writ in action 1991 Folio 69 had already been issued. IAC was the first defendant and the Republic of Iraq was the second defendant. Endorsed on it was a commendably succinct Points of Claim, the thrust of which was contained in the particulars to the allegation of interference:-

The writ was served that same day on IAC’s offices in Lower Regent Street pursuant to section 695 (2) of the Companies Act 1985. The legitimacy of this service was challenged but in due course it was held to be valid. Accordingly, I need say no more about it, save that it is to be noted that IAC became aware of the proceedings on receipt of a letter from their London office enclosing the writ on the 13^th January 1991.

As the war progressed, the four aircraft at Mosul were destroyed or damaged beyond repair. The remaining six were flown from Baghdad to Iran, the last arriving on the 4^th February. By this time, at least, all these had been repainted to a material extent in IAC’s livery.

In November 1991, Evans J began the hearing of a number of applications made by IAC in relation to the claim. The material one raised the issue of sovereign immunity. It is necessary to consider the progress of this application in some detail in order to focus on the significance of the evidence adduced by each side.

It was the thrust of IAC’s case that, following their initial involvement in supplying pilots on the order of the Minister to fly aircraft from Kuwait airport to Basra in the immediate aftermath of the occupation, it was only after obtaining title to the aircraft under Iraqi law with effect from the 17^th September that IAC had any further significant involvement with the aircraft. The factual basis for this proposition was supplied by two affidavits of Mr Saffi.

KAC, however, had served two affidavits from members of their engineering staff. Their evidence was to the effect that, in mid August 1990, representatives of IAC had made a determined effort to recruit KAC engineers for maintenance work on the KAC airbuses. They also gave evidence to the effect that some of the KAC aircraft had been seen to have been repainted in IAC livery before the 17^th September and further that KAC ground equipment and spares had been observed being loaded onto an IAC freighter at Kuwait and/or already situated at Baghdad before that date.

The recruiting efforts were said to have been undertaken by three particular individuals, Mr Saffi, the Director-General, assisted by Mr Amer Al Shaikhly (“Mr Al Shaikhly”), the Line maintenance Manager, and Mr Sabah Abbo (“Mr Abbo”), the then Director of Quality Control.

IAC responded to the statements made by the Kuwaiti engineers by tendering two additional affidavits dated the 20^th November made by Mr Al Shaikhly and Mr Abbo. On the 21^st November IAC applied for an order for cross examination of KAC’s witnesses. Meanwhile, the hearing continued. It terminated on the 3^rd December being the seventh day of the hearing. At this stage, having regard to the observations of Kerr LJ in J H Rayner v Dept of Trade and Industry [1989] 1 Ch. 72 at p.194 that the issue of sovereign immunity should be decided as a preliminary issue and not on the basis of good arguable case, Evans J ordered that all 5 deponents should attend for cross examination.

The KAC witnesses were cross examined on the 10^th December and Mr Abbo and Mr Al Shaikhly on the 11^th December. There was then a gap until the 29^th January 1991 when Mr Saffi, who had been unwell, attended for cross examination. During the course of his cross examination some additional documents were adduced by IAC, a

KAC’s case on the facts for the period leading up to the 17 September was based on the evidence of the engineers and was summarised in the KAC skeleton argument as follows:-

This reflected KAC’s pleaded case (which, in essence, has remained KAC’s case throughout). But IAC challenged the evidence of the Kuwaiti engineers. If and in so far as efforts had been made to contact and engage engineers that was all with a view, it was contended, to their recruitment if and when the KAC aircraft were transferred to IAC. Further, it was argued, it was not made out that any steps had been taken to repaint the aircraft in IAC livery or to register them as IAC aircraft prior to the 17^th September.

Evans J recorded in his judgment that the oral evidence had put some aspects of the case in a “fresh light” such that his conclusions were dependent “primarily on the oral evidence”. He expressly put out of account the documentation that had been disclosed relating to what he regarded as preliminary enquiries, made in late August, for the registration of the KAC aircraft “not regarded as urgent in the conditions prevailing during August and September”. He concluded that “a clear general picture emerged”. So far as directly material that picture was:-

Mr Saffi was instructed to “maintain” or “look after” the KAC aircraft that had been brought to Iraq.

The kind of basic maintenance required was limited to checking the tyre pressures, moving each aircraft so that its tyres did not become distorted, checking for oil and fuel leaks and removing and replacing engine cowlings and such like from time to time

It was doubtful whether this work required specialist qualifications but unsuccessful attempts were made to recruit airbus qualified engineers, including one of the witnesses called by KAC.

Two of the aircraft were repainted in IAC livery but only after the decree came into effect.

The judge went on to describe the essential issue on sovereign immunity in this way at p.12:-

Having posed the issue in that form he concluded at p.14:-

In those circumstances, the learned judge concluded that IAC was not entitled to sovereign immunity.

In the Court of Appeal (reported at [1995] 1 Lloyds Rep.25), IAC successfully obtained an order reversing the decision of Evans J on the claim to immunity. However, it is to be noted the court did not disturb any of the findings of fact. The essence of the criticism directed at the judge’s conclusions was the apparent reliance

KAC had developed a new argument in the Court of Appeal to the effect that, following the implementation of Resolution 369, the acts of IAC were simply acts in consequence of the vesting of title, not the exercise of sovereign authority. The Court of Appeal rejected that submission. Simon Brown LJ expressed himself as follows at p.37:-

As already observed, the matter went on further appeal to the House of Lords: [1995] 1 WLR 1147. The facts as found by Evans J were by now encapsulated in an agreed statement of facts. However, annexed to that statement was a list of findings of fact by the judge which had been challenged by IAC’s notice of appeal in the Court of Appeal but which that court had not found it necessary to consider. It is notable that, in particular, the following findings were said to be wrong:-

As regards the period after Resolution 369 came into effect, the majority in the House of Lords concluded that it could not be said that IAC’s retention and use of the aircraft as its own constituted acts done in the exercise of sovereign authority: per Lord Goff at p.1163 C – D. Lord Goff ’s speech then goes on at p. 1164 A as follows:-

It is this passage which is the focal point of this action for it is KAC’s case that the factual basis for the conclusion is wholly misfounded. In the light of the evidence now available, the inaccuracy, or at least lack of completeness, in the findings of fact is to a large extent common ground. The primary issue for my determination is the extent of the error and whether that error was deliberately induced by IAC.

The issues of liability and quantum were subjected to split trials. Questions related to title, justiciability and recognition of foreign law, together with the matter of conversion “on the facts” were determined by Mance J : [1999] CLC 31. He also made findings on the required nature of the causal link and the burden of proof under Iraqi law. The issues of causation and remoteness under English law were left over to a stage two trial before Aikens J: [2002] 2 All E.R.(Comm) 360.

Before going onto the subsequent history, it is necessary to say a little more about the issue of justiciability. As clearly foreshadowed in Mr Saffi’s affidavits, it was IAC’s case that, whether or not it was not entitled to sovereign immunity, the issues arising from the acts of which KAC complained were not justiciable in the English courts by reason of the doctrine of act of state. The factual basis for this plea, as already indicated, was that the effect of Resolution 369 was to pass legal title to IAC and that all IAC’s activity with regard to the fleet of aircraft was post the date when the Resolution came into force. It was IAC’s argument that the doctrine of act of state

This issue was canvassed in the House of Lords but their Lordships concluded that the state of the pleadings necessitated the matter being remitted to the Commercial Court. Mance J concluded, however, that Resolution 369 was in breach of clearly established principles of international law:

The Court of Appeal ([2001] 3 WLR 1117) agreed with that conclusion putting the matter this way at p.1219:-

It followed that, as a matter of English public policy, the Resolution should be denied recognition. Mance J so found and this conclusion was approved by the Court of Appeal at p.1220:-

These findings were in turn approved when the appeals from Mance J and Aikens J reached the House of Lords: [2002] UK HL 19. Their Lordships also reiterated that public policy considerations were equally fatal to any submission under the double actionability rule that, in applying the second rule, it was appropriate to consider whether an Iraqi court would have recognised the Resolution as a bar to a claim for usurpation.

The origins of the present action are to be found in the preparations for the trials before Mance J and Aikens J. Indeed Aikens J was told that KAC was contemplating seeking to set aside the decision of the House of Lords at least in part: see para 94 of his judgment. The materials that provoked this proposal were contained in some of the following documents:-

Various witness statements were prepared by IAC for the purposes of the trial before Mance J, albeit their content was more pertinent to the issues that were to arise at stage two. These included one from Mr Saffi dated 14^th June 1997 and two each from Mr Samir Kadhim Sadek Nekash (“Mr Nekash”), the Director of Technical Planning, and from Mr Mouad Al Hakim (“Mr Al Hakim”), Director of Technical Contracts dated 14^th June 1997 and the 15^th December 1997 respectively, together with a statement from Mr Al-Zubaidi dated 15^th June 1997. (It should be noted that none of these persons gave oral evidence at the trial before Mance J).

As regards the second trial before Aikens J, Mr Nekash prepared a number of additional statements. Of particular note is his statement dated 12^th October 1999 which disclosed a copy of Mr Nuaman Na’ama’s diary for the relevant period. Mr Na’ama was the Director of Engineering. (Mr Nekash, but none of the other witnesses named above, gave oral evidence at the second stage trial).

Many of the documents dated prior to the 17^th September which are to be found in bundle D were disclosed for the first time in the period between July 1995 (when the House of Lords handed down its judgment) and October 2000 (when the claim form in the present action was issued).

As explained in the judgment of the Court of Appeal, this material created a difficulty. By reason of the decision of the House of Lords, the period prior to the 17^th September was one in which any activity on the part of IAC in relation to the aircraft was protected by state immunity. Thus any such activities were only of marginal relevance in the context of the issues that remained to be determined. But the new material referred to above appeared to reveal that IAC’s activity prior to the 17^th September was much more extensive than had been found by Evans J and summarised in the agreed statement of facts lodged on the appeal to the House of Lords. In the result KAC lodged their petition to rescind the decision in the House of Lords shortly before the hearing of the Court of Appeal and the response of the House

The evidence of IAC as presented before Evans J in 1991 was to the effect that it had not been involved with KAC aircraft after their arrival in Iraq proper other than in terms of very limited and basic maintenance pursuant to instructions from the Minister of Communications and Transport. This evidence was accurately summarised by Lord Goff in the House of Lords at p. 1161 :-

By the end of the hearing before me, it was accepted even by IAC that some steps had been taken prior to Resolution 369, in regard to at least two or three of the aircraft, to register them, insure them and paint them, all in furtherance of a Presidential instruction to prepare them for operation on the Baghdad to Kuwait route. Nonetheless a substantial gulf remains as to what actually happened in August and early September 1990 and what IAC concedes.

In order to embark on the task of determining the nature and scale of any disparities between the evidence adduced before Evans J and that adduced in this action, it is necessary to focus on those parts of the earlier evidence which KAC alleges were untrue.

Evans J expressly placed considerable emphasis on the oral evidence and it is thus convenient to consider each of the witnesses in turn. But on any view, I agree with the claimants that the general theme of their evidence can be fairly summarised as follows:-

Apart from basic maintenance, IAC was not involved in any activity in relation to the aircraft until September 17^th: in particular no steps were taken to register, insure or paint the aircraft.

No government instructions were given in that regard save for the requirement of basic maintenance nor was IAC aware of government intentions with regard to the use of the aircraft until RCC 369 was promulgated.

The starting point is the two affidavits made by Mr Saffi in 1991. The first affidavit, made in July, sets out IAC’s stall in regard to the company’s status and its entitlement to immunity as “a separate entity” under the 1978 Act. It also prays in aid the doctrine of act of state in regard to the transfer of title to IAC pursuant to Resolution 369. As regards the factual events post invasion, he simply stated: -

This picture was reinforced in Mr Saffi’s second affidavit made in October. He repeated the nature of the oral instruction from the Minister. As regards events after arrival of the aircraft in Iraq, he said this: -

Mr Saffi went on to deal with the question of registration and insurance. As regards registration, he said that applications for the certificates of airworthiness were made on the 29^th September which were duly granted on the 2^nd October. The relevant section of the affidavit reads:

In apparent support of this statement Mr Saffi exhibited three documents. Since they played a significant part in the cross-examination of the three witnesses before Evans J, it is desirable I should identify them :-

As regards insurance, Mr Saffi’s affidavit went on :-

Mr Al Shaikhly also made two affidavits. The first, dated 20^th November 1991 was primarily directed to challenging the evidence of the two KAC engineers. He confirmed that IAC had received a Ministerial instruction to maintain the aircraft. He emphasised that amalgamation of KAC and IAC did not occur until the 17^th September. He went on to make it clear, no less than six times, that no KAC equipment or spares were removed from Kuwait prior to the 17^th September. Further Mr Al Shaikhly made a particular point to challenge the assertion of one of the KAC engineers that he had seen 4 ex KAC aircraft in IAC livery before the 17^th September. It is fair to say that one of them was said to be a Boeing 767 which on any view had not been repainted by the time it was destroyed at Mosul during the war. But the affidavit went on to state in terms: -

Mr Abbo also made two affidavits. In his first affidavit dated 20^th November, he made the following points :-

He was aware of the oral instruction from the Minister given on the 6^th August to make arrangements for the maintenance of the aircraft although he quotes “the instruction was not in fact carried out before RCC Resolution 369 of the 9^th September came into effect because IAC did not have the qualified personnel…….”

At the time of the meeting of the KAC engineers on the 29 and 30^th August 1990, nothing had been announced about any amalgamation of KAC with IAC.

None of the aircraft were repainted until after the 17^th September: the first aircraft that had been painted was AHD (AOA) painting having started on the 23^rd September.

The first witness to be cross examined was Mr Al Shaikhly. The bulk of it was directed to the detail of meetings and discussions with the Kuwaiti engineers. But in other respects Mr Al Shaikhly insisted: -

The government had only given oral orders to fly the aircraft into Kuwait to avoid them being harmed.

No specific instructions about the aircraft were given initially although it was inferred that the government wanted them in good condition.

Instructions however were given to recruit engineers on behalf of the government, such efforts commencing in late August, albeit that no engineer was in fact engaged by IAC until after the 17^th September.

IAC formed no intention to operate the aircraft until after the 17^th September.

He had no idea that the aircraft were to form part of IAC’s fleet until after the 17^th September.

Mr Abbo was called to give evidence. He claimed in cross examination that: -

The Minister had merely ordered that the aircraft should be taken to Iraq for safekeeping.

There was no intention to operate the aircraft.

He only became aware of Resolution 369 after the 17^th September and he had not heard about it or its contents before.

Efforts were made to recruit engineers for maintenance but no engineer was engaged by KAC until late September.

Mr Abbo was particularly insistent that applications for certificates of airworthiness were not made before the 17^th September nor had there been any correspondence on that topic. The following is an extract from his cross-examination by Mr Clarke QC:-

Inevitably he was asked about the documents exhibited to Mr Saffi’s affidavit. He accepted that there must have been an earlier letter to that of the 27^th September giving notification of the registration markings allocated to AHD and AHB in like form to the letter of the 23^rd October. As regards the reference in the Ministry’s letter to the letter of the 23^rd August, Mr Abbo suggested that this had been in a response to an earlier inquiry emanating from the planning department of IAC about registration requirements generally, unrelated to the Kuwaiti aircraft.

Mr Saffi in his cross examination: -

Confirmed that he had received an oral instruction from the Minister during the night of the 6^th August to provide pilots to remove the aircraft from Kuwait.

Re-affirmed that shortly afterwards the Minister gave instructions that IAC should undertake basic maintenance on them in the form of checking tyre pressures, inspecting for leaks, effecting movements to prevent distortion of tyres and so on.

Explained that he had tried to recruit 5 trained people for maintenance purposes but none were engaged until after the 17^th September.

Accepted that he went to Kuwait on the 10^th August but not with a view to resuming commercial flights.

Asserted that there was no discussion with the Minister about adding to the KAC aircraft to the IAC fleet until after the 17^th September and denied that the Minister had said that the aircraft were to be operated by IAC prior to that date. To the contrary, his evidence was that the Minister had insisted that he did not want the aircraft used at all:-

No steps were taken to repaint or insure the aircraft before the 17^th September. For instance in re-examination, he said this:-

It is to be noted that only documentary material put to Mr Saffi by way of challenge to his evidence on these matters was a newspaper report dated the 17^th September to the effect that “several Kuwait Airways planes including Airbuses and Boeings had already been moved to Baghdad and repainted in the green and white colours of Iraqi airways along with the Iraqi flag……” This was put to Mr Saffi in cross-examination:-

As already noted it was with particular reliance upon this oral evidence that Evans J made the findings of fact set out earlier. He accepted that the activities of IAC were restricted to basic maintenance and a search for qualified engineers to that end. As regards painting, he simply recorded that the evidence showed that, after the decree took effect, at least two of the aircraft were repainted in IAC livery.

So far as Mr Saffi’s evidence on these topics was concerned, the judge’s only critical observation was to the effect that Mr Saffi had been somewhat reticent about his relations with the Minister between the 8^th August and the date when he became aware of the decree. Evans J regarded his evidence as somewhat contradictory in the sense that, on the one hand, he had denied having any communication with the Minister or having any fore knowledge of the decree, but on the other hand that, prior to the decree, he had told the Minister he did not want the KAC aircraft, that he would prefer new aircraft, and that in any event IAC had no need of any aircraft until such time as international flights could resume.

There remains the question of registration. Mr Saffi appears to have arrived in England with three additional documents, although somewhat astonishingly he asserted that he had not read them. During the course of his cross examination, counsel for IAC interposed to put the documents in evidence. The first was a letter dated 15^th August 1990 from Mr Nekash to Mr Abbo which read: -

The second letter was from Mr Abbo to the DGCA under reference MSA/1/1901 dated 23^rd August 1990. This read: -

In due course the authenticity of these two letters came to be challenged by KAC. Mr Saffi’s evidence in 1992 was to the effect that these letters were prompted by a proposed charter of two airbuses from Royal Jordanian Airlines albeit that he accepted that these aircraft were passenger planes and that negotiations had been on hold since the outbreak of the war.

The third letter was a letter written to Mr Abbo on the 23^rd August 1990 by the DGCA dated 23^rd August 1990 (and copied to the General Manager’s office). It read: -

Various requirements were then set out including the requirements for a valid airworthiness certificate, evidence of appropriate maintenance and evidence of appropriates licences held by the crew and maintenance engineers.

Mr Saffi’s evidence in 1992 was that, whilst this was indeed the letter referred to in the Ministry’s letter of the 23^rd October quoted above, it was in fact a reply to the enquiry contained in the second letter and was not related to the Kuwaiti aircraft.

It was no doubt the apparent inconsistencies in this material which led to the tentative conclusion of Evans J (challenged by the defendants on appeal) that the reply was in fact to a preliminary enquiry about the Kuwaiti aircraft, albeit that the learned judge did not regard it as necessary to place any reliance upon this finding in reaching his conclusions on the facts.

The trial before me began on the 13^th May 2002. IAC called a number of witnesses. In order of appearance they were: -

Mr Amer Muhi Al Din Ali (“Mr Ali”). He had been the manager of IAC’s sheet metal workshop and as such had been in immediate charge of IAC’s painting team.

Mr Abbo.

Mr Al Shaikhly.

Mr Na’ama.

Mr Saffi

Mr Na’ama completed his evidence on the 27^th May 2002. There then ensued a prolonged adjournment, the original estimate for the trial period having been overrun . It was contemplated at that stage that the court would reconvene for the purposes of hearing expert evidence on painting.

In addition, it was also anticipated that Mr Nekash might also be called at the resumed hearing. He had been in England before the time of the original hearing but had fallen seriously ill. I am sorry to say that he later died and was thus never cross examined. In contrast, although it had earlier been suggested that Mr Saffi was not well enough to travel to England, before the resumed hearing IAC applied to call him after all and I duly gave leave. He gave evidence over some four days.

I have had very much in mind that the trial was taking place nearly 12 years after the events leading up to Resolution 369. The witnesses’ actual recollection of events must predictably have dimmed, giving rise to inevitable inconsistencies and gaps. In any event, there would have been an understandable temptation for those witnesses being recalled simply to repeat what had been said on the earlier occasion or, in the event that the newly disclosed documentary material was inconsistent with their earlier evidence, to effect a reconstruction explaining the disparity.

In these circumstances I respectfully endorse the observations of Robert Goff LJ in The Ocean Frost [1985] 1 Lloyd’s Rep.1 at p.57: -

My position is in stark contrast to that in which Evans J was placed. At the time of the hearing before him, there had been very little by way of disclosure. As he stated in terms he necessarily had to make his findings of fact in reliance on the oral evidence, illuminating as it did the affidavit evidence that had been furnished. But my task of determining the extent and scope of the activity on the part of IAC (albeit many years ago) is rendered easier by virtue of the availability of many of the

That said, the oral evidence was tendered by way of supplement and amplification to the documents and I must consider its reliability in terms of revealing the full picture. In particular, KAC contend that two documents have been fabricated. There is also the important issue as to whether any disparities between the evidence given on the earlier occasion in comparison with the true picture is attributable to the fact that the earlier evidence was knowingly false. In this context, it is right that I should express some comments about the witnesses as they struck me: -

Mr Ali, whose evidence was directed primarily to the question of painting, managed to undermine my confidence in his evidence in a devastating and irredeemable manner at a very early stage. A supplementary statement was furnished by him dated only three weeks before the hearing in which he purported to give some further detail about the painting of the aircraft and the sourcing of additional supplies of paint. This was by way of elaboration of his first statement which dealt with the scope of the repainting undertaken using white, dark green and light green paint.

Mr Abbo spoke very good English (indeed he has now lived in the United States for some 8 years or more). He gave his evidence fluently and with apparent confidence. Whether it was reliable depends to a significant extent on my findings as to the circumstances surrounding the preparation and subsequent late disclosure of his letter to the DGCA said to have been prepared on the 23^rd August and whether or not the letter from the DGCA of the 23^rd August was a reply thereto. This issue I deal with later.

As regards Mr Al Shaikhly, even allowing for the fact that his command of English was less secure than some of his colleagues, the impression left by him was that he was less than frank in recounting events at Kuwait airport where he had been stationed, particularly as regards to the alleged transfer of KAC’s spares to Baghdad. He was also markedly unconvincing in seeking to explain the disparity between his asserted recollection and the content of the Na’ama diary. Just as Aikens J regarded the diary as comprehensive and reliable with regard to the movement of the aircraft, so also I regard it as equally comprehensive and reliable in most other respects.

Mr Na’ama was called next. Re-reading the transcript merely confirms my contemporary impression that Mr Na’ama was a distinctively evasive witness, an attitude all the more indefensible given the detailed and contemporary notes in his diary, the broad reliability of which I have just referred to.

As explained earlier, Mr Saffi was somewhat of a surprise, albeit very important, witness. It was clear that, whilst not in the best of health, Mr Saffi was able to cope with four days in the witness box with considerable vigour. He had gone to considerable lengths in preparing for the hearing, including listening to a taped version of the evidence that he gave in 1992. No doubt he also took the trouble to absorb what the other IAC witnesses had said in this action in May this year. Despite all that, he was not really willing to face up to the difficulties of reconciling his evidence with the contemporary material. Indeed his introduction of a new theme for the pre September 17 period, to the effect that ownership of the aircraft had been vested in the Ministry and that IAC had received instructions from the Minister to prepare three of the airbuses on the government’s behalf for non-commercial flights to Kuwait, had all the appearance of being simply a new attempt to explain away documentary evidence that sat very uncomfortably with his earlier protestations of IAC’s lack of involvement.

Three statements were prepared by Mr Nekash. Sadly he was not available for cross examination and I must approach the contents of those statements on that basis. Nevertheless, I feel it right also to bear in mind the observation of Aikens J, before whom Mr Nekash did give oral evidence in 2000, that “he was not entirely open about his knowledge of the overpainting….”.

Prior to the war, IAC had ambitions to expand its passenger fleet. In June 1990, it had entered into a purchase contract with Airbus for the delivery of five A310’s to add to its existing Boeing fleet. The first of these airbuses was due to be delivered in April 1992.

Anxious to gain familiarity with such aircraft meanwhile, IAC had been looking to wet lease two 310’s. Mr Abbo told the court that he had had a discussion with KAC with a view to leasing some of their aircraft. This was vigorously denied by Mr Saffi, but an entry in the Na’ama diary on the 23^rd June tends to confirm Mr Abbo’s account.

In the event, Royal Jordanian was also approached and a letter of intent relating to two aircraft was signed on the 16^th July 1990 with a view to negotiations being completed within two weeks and for delivery to occur in September and November respectively. The invasion, of course, intervened.

I accept that on the 6^th August, Mr Saffi received a direct oral instruction from the Minster of Transport and Communication to arrange for the KAC aircraft to be flown into Iraq. But much more significantly on the 7^th August, the Presidency Secretariat sent the following message to the Ministry marked Top Secret – Personal – Urgent: -

This was copied to a number of parties including IAC with the added specific requirement “to take necessary action”. (This message was not disclosed until after the Aikens J trial in April 2000.)

Over the next few days, IAC was also notified by the Presidency Secretariat of Resolutions 312 and 313 which prescribed the integration of Kuwait into Iraq and the assumption of responsibility for all Kuwaiti financial obligations with the added notation: -

IAC reacted quickly. On the 9^th August an IAC delegation went to Kuwait airport. It was led by Mr Abbo. His letter reporting on the visit is incomplete. Nonetheless, the

The next day, the 10^th August, Mr Saffi flew to Kuwait to see the position for himself. The Na’ama diary records instructions given by him on his return to the effect that Kuwait airport would operate as “second airport after Basra for domestic transport”. The thrust of the presidential order of the 7^th August was duly recorded in the diary “Repairing Kuwait airport – Iraqi pilots – domestic transport”, this being confirmed again in an entry on the 17^th August.

On the 13^th August, the Na’ama diary records Mr Saffi’s order that a “full inventory” of stores and equipment at Kuwait should be prepared. Indeed some details of engines, tyres, brakes and other items were already recorded in the diary on the 14^th August. On the 16^th August, IAC resumed scheduled services to Kuwait using an IAC Boeing 727. IAC Boeing 737’s were added on the 21^st August.

In the meantime, preparations began in earnest with a view to using KAC airbuses for the service. The next fortnight saw the following developments.

On the 18^th August Mr Saffi chaired a meeting which arranged for Mr Al Shaikhly to take up station in Kuwait, so as to supervise the stores there and engage suitable airbus staff. Mr Al Shaikhly left the following day.

On the 20^th August, the first of KAC’s airbuses (AHD) was relocated to Baghdad and on the 22^nd August, its engine problems having been overcome, AHI was brought into Baghdad direct from Kuwait. The entries in the Na’ama diary for that day speak for themselves: -

These instructions were, in my judgment, a direct and accurate reflection of the presidential order to the effect that the Kuwaiti aircraft were to be urgently prepared for commercial service between Iraq and Kuwait flown by Iraqi pilots.

On the 23^rd August, Mr Abbo prepared a letter to the DGCA seeking advice on registration requirements. This was only disclosed in July 1996. It was marked “Urgent”. It read: -

Precisely when that letter was signed and/or sent remains a matter of controversy. But it is unquestionably clear that that same day Mr Abbo was informed of the registration requirements as set out in the letter of the DGCA quoted in paragraph 60 above. Indeed Mr Abbo duly annotated a copy of that letter in manuscript noting that both insurance and maintenance programmes were “pending” and stating: “the technical assistant general manager: to be informed of the above regarding registration of airbus A310 – 200 aircraft (formerly of Kuwaitia) and your instructions please.” (This annotated copy was not disclosed until July 2000 after the hearing before the Court of Appeal.)

Also on the 23^rd August, the Na’ama diary records that AHD had entered the hanger for painting work to commence at 12.30. The note goes on to record the availability of enough paint for one aircraft, with a balance of 4 gallons of dark green, 4 gallons of light green and 5 gallons of light grey available for the second aircraft. (The need for further supplies of paint is recorded in the Na’ama diary for the 25^th August).

On the 25^th August Mr Saffi wrote a memorandum to all employees of IAC. This was disclosed in September 1997. It read as follows: -

I accept the submission made by KAC that Mr Saffi, as the author of this letter, was proceeding on the basis that, in responding to the instruction to implement Resolution 312 and 313, IAC could properly regard the effect of the merger and integration as being that the KAC fleet was to all intents and purposes part of, and to be operated with, IAC’s fleet. This view receives further support from the content of the Na’ama diary in the period between the 24^th August and 9^th September from which it would appear that KAC stores and equipment were systematically removed from Kuwait and brought into Iraq.

Insurance matters were also active at this stage. The Na’ama diary records that it was contemplated on the 25^th August that cover for AHD (AOA) would be in place by the 30^th August. To that end, Mr Abbo’s assistant wrote (pp. Mr Abbo) to IAC’s insurance manager on the 25^th August as regards AOA stating: -

From an IAC internal memorandum dated the 25^th August, it is clear that the National Insurance Company had already been given informal notice of the need for insurance cover for two airbus 310s, the first of which was to be AOA. Confirmation that the registration label AOA had been allocated by the DGCA was contained in a letter (disclosed in September 1997) also dated 25^th August and received on the 27^th August. This read: -

On the 26^th August Mr Saffi reported on progress to the Presidency Secretariat (in a letter disclosed in May 2000): -

On the 27^th August painting work on AOA was completed and AOB entered the hanger in its stead at 1600.

On the 28^th August, the Minister issued an order, copied to Mr Saffi for “confirmation”, establishing a joint committee of the DGCA and IAC to prepare an inventory of items at Kuwait so as, amongst other things, to identify items belonging to the “former” KAC and transferred to IAC.

The next day Mr Saffi appears to have written to the Deputy Prime Minster Mr Sa’adoon Hammadi on the general topic of the transfer of KAC’s assets to IAC. This letter has not been disclosed. It lead in turn to contact with the Deputy Prime Minster by the Presidency Office (in a letter dated the 1^st September which has also not been disclosed).

The outcome was the following letter (only disclosed in October 2001) to the Presidency Office from the Deputy Prime Minister dated the 5^th September: -

In the meantime, on the 30^th August, the Na’ama diary records that a delegation led by Mr Saffi visited Kuwait in one of the airbuses. On the 31^st August work on painting AOB was completed at 1300. The Egyptian airbus (AHI/AOC) entered the hanger for painting at 1400 on the 1^st September. That same day insurance cover for AOA was confirmed as included with IAC’s existing fleet.

On the 2^nd September, a board meeting of IAC dealt with the question of fares between Baghdad and Kuwait. The board’s decision was to the effect that government employees and military personnel should be offered a discounted fare on production of an official letter.

Following interviews conducted by Mr Saffi whilst he had been in Kuwait on the 30^th August, two former KAC engineers were recommended for employment by Mr Abbo in his letter to the administrative department dated 6^th September “in view of the company’s need for their services to operate the aircraft”. This proposal was endorsed by Mr Saffi on terms that the engineers should continue to work for IAC “on the same basis as their previous contract”.

As already recorded Resolution 369 was passed on the 9^th September and sent to IAC. IAC in turn sent a copy to the Ministry. The Resolution came into force on the 17^th September.

IAC’s case as to the true state of affairs that prevailed in the crucial month between the 7^th August and the 9^th September became somewhat of a moving target. In the event, the extent of the concessions made by IAC seemed to amount to this. Contrary to the evidence produced by IAC before Evans J, there was some activity with regard to the aircraft and in particular steps were taken to register and insure 2 or 3 of them and to use some form of paint to hide their KAC livery. All this was said to be in response to an oral instruction given by the minister some time in late August to prepare 3 airbuses on behalf of the government for non-commercial services to Kuwait.

The extent of these admissions, whilst themselves demonstrating a marked contrast with the evidence given only 18 months after the event, is wholly lacking in realism. They fly in the face of the contemporary documentation.

First, despite Mr Saffi’s persistent assertion to that effect in his oral evidence, there is no basis for the contention that, on the instructions of the minister, flights were to be commenced but restricted to the carriage of those on official business: -

There is nothing in the contemporary documentation to support the suggestion that the airbuses were to be used solely for governmental transport. To the contrary, the board minutes demonstrate that transportation of government and military personnel was to be a revenue earning exercise at a discount to otherwise normal passenger traffic. Indeed, the steps taken to insure the aircraft were solely on the basis of their being employed for commercial use.

Furthermore, there is nothing in the contemporary documents to support the suggestion that there was in fact any ministerial instruction in late August to supplement the original order from the Presidency Secretariat dated 7^th August for all the aircraft to be used for “internal transport”.

The origin of this alleged instruction from the minister in late August is to be found in Mr Saffi’s statement prepared in June 1997. The purpose of the flights was described as “domestic” generally, without any suggestion (as contended in Mr Al Zubaidi’s statement in February 2001) that the flights would only be available for official government business. Indeed, before Aikens J, it was IAC’s case that the aircraft were for internal flights in contra distinction to governmental use.

In the second place, it was fully apparent that the aircraft were being treated as part of IAC’s fleet rather than that IAC were merely engaged in conducting activity on behalf of the government: -

The starting points here are Resolutions 312 and 313. The instruction to IAC to take the necessary action for implementation of those Resolutions can be fairly construed as an invitation to IAC to absorb its Kuwaiti counterpart. This is how IAC viewed it, as is confirmed by Mr Abbo’s letter enquiring about registration requirements for “formerly Kuwaitia” aircraft. On the same basis steps were taken to insure the aircraft as part of IAC’s fleet.

Indeed it was notable that in his evidence in chief, Mr Abbo was asked about the manuscript notes that he had added to the DGCA letter of the 23^rd August: -

This analysis is fully confirmed by Mr Saffi’s letter to all employees dated 25^th August which describes the joining of the two fleets as a fait accompli.

If further confirmation was required, Mr Saffi’s letter to the Presidency Secretariat of the 26^th August establishes that the transfer to the Iraqi register being arranged by IAC was being pursued so as to put into effect the instructions contained in the Presidency Secretariat letter of the 7^th August.

Thus, in commenting on the Deputy Prime Minister’s letter of the 5^th September copied to IAC, Mr Saffi realistically observed: -

Whilst the legal position was only perfected by Resolution 369, it is accordingly clear that there was an acceptance of a de facto transfer much earlier. Indeed, in his oral evidence, Mr Saffi said that the catalyst for the resolution was not the desire to accomplish the transfer but simply the need to enable IAC to stamp out theft at the airport.

Given the content of the documentation there could be no serious issue as to the extent of the steps taken by IAC to insure the aircraft or, subject to the controversy about the letters to the DGCA asking for registration requirements, the extent to which steps were taken to register the aircraft. However, there was a wide ranging dispute as to the extent to which the aircraft were overpainted before the 17^th September.

I suspect that this is somewhat of an arid dispute. Some degree of overpainting on three of the aircraft prior to the 17^th September is conceded. My initial reaction is that the nature of the paint used, and the extent to which overpainting took place, are not determinative of the decisions I have to reach. But I must make my findings on the issue.

Mr Saffi’s witness statement for this trial conceded that overpainting commenced before the 17^th September with green paint, with the purpose of obscuring KAC’s name and logo. Mr Ali’s recollection as the man in charge of the paint shop, as recorded in his statement, was that there had been some overpainting with green and/or white paint.

It was this latter evidence which underwent such a drastic change when Mr Ali gave oral evidence. I unhesitatingly reject his evidence that the only material applied to the aircraft was primer:-

At no stage prior to Mr Ali’s oral evidence had anyone (let alone himself) or any document suggested that primer rather than paint had been applied.

The instruction emanating from the minister which was relied upon and said to have been given at the end of August, actually called for repainting.

There was no need to apply primer since the work consisted of overpainting not application of a livery to bare metal.

Furthermore, the application of primer would not have achieved the object of obscuring the Kuwaiti livery unless a large number of coats was applied.

The entries in the Na’ama diary as regards painting were accepted by IAC as probably correct before Aikens J. Indeed, in those proceedings, Mr Nekash said that overpainting had started before the 17^th September.

As regards to the degree of overpainting, the probabilities are that, although hurriedly and sloppily effected, the three aircraft did emerge from the hanger in what would pass for IAC livery: -

Although time was short, Mr Saffi’s instructions were to undertake painting round the clock under the threat of extreme sanctions.

The scale of the task was significantly limited by the fact that the grey underbody and the white superstructure did not need covering.

Supplies of dark and light green paint and of grey paint were available for at least one aircraft as recorded in the Na’ama diary.

I am not persuaded that the absence of specialised docking equipment would have significantly inhibited the painting process.

The Na’ama diary records that painting was completed on all three aircraft (and indeed started on a fourth in the form of
Emirate 727 on September 12^th).

It can be safely inferred that additional supplies of paint as called for on the 25^th August were obtained.

Indeed, it is common ground that all six aircraft were repainted in IAC livery by the time of their departure to Iran: the Na’ama diary also

In short, the finding made by Aikens J that three of the airbuses had been overpainted in IAC livery before the 17^th September was, in the light of the new evidence, manifestly correct.

Before turning to the issues relating to the contemporary knowledge of the witnesses of the true facts and whether they had had them in mind when they gave evidence in 1992, I must turn to an issue which straddles the parties’ contentions as to the true facts and the honesty or otherwise of the witnesses.

In the bundle of contemporary documents there were two whose authenticity was vigorously challenged by KAC. On their face, they were written shortly before the draft letter prepared by Mr Abbo on the 23^rd August and quoted at paragraph 85 above. I set them out in full once again.

The first is a memorandum dated 15^th August from Mr Nekash to Mr Abbo. It reads: -

The second letter is dated 23^rd August 1990 from Mr Abbo to the DGCA which reads:-

The claimants’ primary case is that these two letters were forgeries prepared by IAC in 1992 and brought to London by Mr Saffi for the purpose of explaining the origin of the letter from the DGCA dated 23^rd August referred to in the letter which had been disclosed and attached to Mr Saffi’s second affidavit of the 23^rd October 1990.

In the alternative KAC contended that even if the letter of the 15^th August was genuine, nonetheless the second letter was a forgery prepared for the same purpose taking advantage of the fact that action had not been taken on the earlier one.

In the further alternative, KAC contended that, if the letters were genuine, nonetheless, the DGCA letter of the 23^rd August was, contrary to IAC’s case, written in response, not to the enquiry originally promulgated by Mr Nekash, but in reply to the letter enquiring about the registration of Kuwait aircraft (a letter which KAC contends (i) was sent on the 23^rd August and not on the 27^th or 28^th and (ii) was deliberately suppressed by IAC for the purposes of the sovereign immunity hearings).

In an attempt to avoid confusion, I propose to refer to Mr Abbo’s letter of the 23^rd August referring to a cargo plane as “Abbo 1” and the letter that was drafted (even if not sent) on the same day relating to the Kuwait aircraft as “Abbo 2”.

Mr Nekash’s letter of the 15^th August 1990 unquestionably has some oddities:

By the time it was written, Iraq was isolated internationally. Indeed on the 9^th August the Security Council had passed its Resolution 662 whereby the annexation of Kuwait was declared as being of no legal validity and calling upon states not to recognise the annexation and to refrain from any dealings which might be interpreted as recognition of it.

In any event, such planes as had been in contemplation prior to the outbreak of war (the purchase from Airbus or the leases from KAC or Royal Jordanian) all related to two or more passenger aircraft and not a single cargo plane.

Turning to Abbo 1, its contents are equally surprising since Mr Abbo would be unlikely not to observe the “error” of Mr Nekash in referring to an intention to obtain a “cargo plane” from a foreign airline. Furthermore, treating the letter from the DGCA dated the 23^rd August as a response to Abbo 1 creates certain striking inconsistencies: -

It is marked “immediate” although there is no suggestion in Abbo 1 that there was any need for dispatch.

It refers to the requirement for registering “aircraft” not a single cargo plane.

It refers to the need for insurance cover for “passengers”

The copy disclosed in July 2000 has Mr Abbo’s manuscript note referring to registration of Kuwaiti Airbus A300’s.

In contrast, Abbo 2 fits happily with the DGCA letter in that: -

It is marked “urgent”

It refers to the need to register a number of aircraft.

Those aircraft are passenger aircraft.

The aircraft were formerly owned by KAC.

Indeed, the fact that the letter from the DGCA dated the 23^rd August was dealing with an inquiry about the Kuwaiti aircraft is clearly demonstrated by a later letter from the DGCA dated the 29^th September which stated: -

However, in assessing the authenticity of Abbo 1 it remains necessary to subject Abbo 2 to careful scrutiny because the copy available has various dates and references on it all of which have been extensively considered in the trial: -

There is a notation at the bottom whereby (and I believe this is common ground) Mr Abbo’s secretary records the date of preparation as the 23^rd August.

There is an Arabic calendar date in the heading the equivalent to the 23^rd August.

There is a western calendar date in the heading which appears to be the 28^th August corrected to the 23^rd August (or possibly vice-versa).

There is a date probably applied at the time of the signature (albeit the only version disclosed is a carbon copy) of the 27^th August.

In addition there is a reference number in the heading which is 1909, corrected in manuscript on the carbon copy to 1901 – the same reference number as on Abbo 1.

Mr Abbo was inevitably and properly cross examined at some length about the preparation of this correspondence. In summary, his account, as finally formulated, was as I understood it as follows.

Having received Mr Nekash’s memorandum of the 15^th August, Mr Abbo’s prepared Abbo 1 on the morning of the 23^rd August. The original was sent by hand to the DGCA. The copy in the papers was the top carbon copy from the file at IAC.

At about noon, he learned from Mr Saffi of the Minister’s instructions to operate the KAC aircraft between Baghdad and Kuwait. By virtue of that instruction, he perceived the need to register the aircraft. He then dictated Abbo 2 to his secretary.

But before it had been sent, the answer to Abbo 1 arrived from the DGCA. Having read it, he realised that the requirements set out in the letter would apply equally to the KAC aircraft so he decided not to send Abbo 2 but merely annotated the reply in manuscript with the manuscript note referred to earlier on in this judgment.

A few days later, Mr Saffi asked Mr Abbo whether he (Mr Abbo) had sent any message to the DGCA arising out of the Minister’s instructions. When Mr Abbo said that he had not done so because the DGCA had already given him details of the registration requirements, Mr Saffi told him nonetheless to send a letter to the DGCA in the context of the Minister’s instructions in order “to protect his neck”.

Accordingly, Mr Abbo signed Abbo 2 on the 27^th August. At some later stage his secretary put on the date of the 28^th and sent it to the DGCA. The version in the bundle was the top carbon copy.

Mr Abbo was unable to help as to why or when the date had been altered to the 23^rd or why and when the reference number had been changed from 1909 (a reference number the same as an undisclosed letter from the quality control department of the 25^th August) to 1901 (the same reference number as that contained Abbo 1).

By any standards, this was an improbable tale, bearing all the hall marks of an attempt to effect a reconstruction consistent with the documents rather than any genuine recollection: -

The premise for the whole account is that it was not until the 23^rd August (by chance just after the despatch of Abbo 1) that Mr Saffi told Mr Abbo about the Minister’s instructions. But, as I have already held, the underlying instructions were the Presidency Secretariat’s written order dated 7^th August. Mr Saffi’s evidence was that he would have told Mr Abbo about it straight away. I accept that that is what occurred; indeed it led to the departure of Mr Abbo for Kuwait on the 9^th August. Furthermore the Na’ama diary reveals that the instruction was common currency by the 12^th August.

Mr Abbo’s contention that the reason for not sending Abbo 2 was the receipt of the answer to Abbo 1 must be rejected simply on the grounds that, as already outlined, the DGCA’s letter was manifestly an answer to Abbo 2. It dealt (on an immediate basis) with passenger aircraft not a single cargo plane. Indeed the DGCA confirmed as such in their letter of the 29^th September.

Mr Abbo’s manuscript notes on the DGCA letter were dated the 23^rd August. There was nothing in the notes suggesting that he was merely proceeding on the assumption that the registration requirements for a cargo plane bought from a foreign airline were the same as the registration requirements for passenger aircraft that “formerly” belonged to KAC. Indeed my own impression from the evidence generally is that bureaucracy was an art form in Iraq – even in a time of war – and that Mr Abbo would never have jumped to any such conclusion on his own initiative.

Mr Abbo’s contention that on or about the 27^th August, Mr Saffi had instructed him to write to the DGCA regarding registration of the KAC aircraft must also be rejected:-

It involves the proposition that Mr Abbo delayed sending what he regarded as an urgent message for 4 days (simply on the basis that he had received a response to a completely different enquiry) and then received no reply to his “urgent message” at all.

It involves the DGCA allocating new registration letters to AHD and AHB on the 25^th and 27^th August respectively before it had even received the initial enquiry. Furthermore the notification from the DGCA of the new registration letters, in expressly referring back to the letter of the 23^rd August, would on this basis be identifying a response to a completely different enquiry without any explanation.

The account of the conversation with Mr Saffi is very sketchy – not least the extent of Mr Saffi’s knowledge of the correspondence, both final and in draft. It is difficult to see why Mr Saffi would be concerned to send a letter regarding registration of the KAC aircraft if he had in fact been given details of Abbo 1 and the alleged reply to it. Equally, it remains wholly obscure as to how and in what manner the topic came to be raised on the 27^th August.

Most significantly Mr Saffi denied that he was aware of the correspondence, let alone that he intervened. On this topic, I prefer Mr Saffi’s evidence (albeit there were certain variations to it in his oral evidence) not least because he felt able to respond to the Presidency Secretariat on the 26^th August as to the steps taken to transfer the aircraft to the Iraqi register before, on Mr Abbo’s evidence, any contact with the DGCA had been made.

I have referred to the anomalies as regards the dates and reference numbers on Abbo 2. The fact that the signature and dates had been added to the carbon copy if anything undermines any reliance that I might otherwise place on them in identifying the nature of the documents.

Against this background I unhesitatingly reject much of Mr Abbo’s account. It is not just improbable; it is absurd. The only possible sequence is that Abbo 2 was sent on

Was Abbo 1 a forgery? The whole subterfuge with regard to the sequence of events on the 23^rd August and thereafter casts great suspicion on the authenticity of Abbo 1. One possibility is that although drafted on the 23^rd in furtherance of the 15^th August letter, Abbo 1 was not sent since matters had been overtaken by the urgent need to arrange registration of the Kuwaiti aircraft. But this was not canvassed in the evidence. Futhermore:-

If, as I have found, Abbo 2 was written that day, it would be a remarkable coincidence that Mr Abbo should concurrently be making the same enquiry in regard to other planes, plans for which on any view had been overtaken by events.

There is the additional oddity that Mr Abbo’s secretary allocated the same reference number to both letters.

In striking contrast she used completely different headed carbon paper for the two letters on the same topic written on the same day.

If I am right about the DGCA’S letter being a reply to Abbo 2, there was no reply at any stage to Abbo 1.

I confess that, in my judgment, the circumstances of the disclosure of this letter also invites suspicion. Given the theme of the evidence of Mr Abbo and Mr Al Shaikhly that no activity had occurred prior to the 17^th September, some explanation of the reference to registration enquiries in August as contained in an attachment of Mr Saffi’s second affidavit was called for. Mr Saffi was called in January and on the way to England brought with him three new documents, albeit he was notably minded to distance himself from them. Indeed, as described, they were adduced in evidence in a very unusual way.

By that time Mr Abbo had returned to Iraq. He was best placed to go through the quality control department files. Indeed, Mr Saffi accepted in his evidence in chief that Mr Abbo looked the documents out. The outcome, whoever conducted the process, was with the benefit of hindsight astonishing. All the documents which were difficult to reconcile with Abbo 1 and the alleged reply to it were not disclosed at that stage including in particular the order of the 7^th August, the annotated version of the DGCA reply dated the 23^rd August, the DGCA notice of allocation of registration

These suspicions are heightened by another respect in which the attachments to Mr Saffi’s second affidavit were selective. As is perhaps already apparent, it is, to put it conservatively, striking that whilst the documents relating to the application for and granting of a certificate of airworthiness for AOA were exhibited, the DGCA notification of the allocation of registration letters relating to that aeroplane (dated 25^th August) was not. In its place was the DGCA letter of the 23^rd October relating to registration letters allocated to other aircraft.

I have come to the conclusion, bearing well in mind the high standard of proof called for in resolving issues of this kind, that Abbo 1 was not a genuine contemporary document. The only letter written and sent to the DGCA on the 23^rd August by Mr Abbo was Abbo 2 to which the DGCA replied the same day. I am also satisfied that Mr Saffi and Mr Abbo were fully aware of the true position as regards the correspondence and were, perhaps with others, both directly involved in the preparation of Abbo 1.

The claimants recognise that the position as regards the 15^th August letter might be different in the sense that it was possible that it was a genuine letter advantage of which was taken in preparing Abbo 1 to accord it greater verisimilitude. Indeed, Mr Abbo asserted a recollection of some form of inquiry when he gave evidence in 1991.

I also appreciate that the untimely death of Mr Nekash has meant that he has not been cross examined as regards to the 15^th August letter. In addition, I bear in mind that the allegation that both letters were forged involves a widening of the conspiracy to an extent that might seem unnecessary. Abbo 1 would be enough to seek to explain the DGCA’s exposition of registration requirements without more.

That said, I have already identified the surprising nature of the content and timing of the 15^th August letter: see para 118 above. Indeed it is ironic that Mr Abbo’s oral evidence was to the effect that the 15^th August letter, given its timing, could not relate to the Royal Jordanian aircraft and must have been referring to an even earlier proposal to wet-lease some KAC aircraft, a plan the existence of which was vigorously denied by Mr Saffi. In short, it is impossible to discern any legitimate reason why the inquiry regarding registration of a cargo plane should have been initiated.

The overwhelming probability is that the letter of the 15^th August was created to explain the sequence leading up to a letter dealing with registration requirements prior to the 17^th September. It was appreciated that Abbo 1 in isolation would undoubtedly be perceived as a strange enquiry arising out of the blue. This in turn necessitated the creation of the 15^th August letter to add a degree of apparent legitimacy. Equally it was appreciated that it could not refer to earlier leasing negotiations as they had run their course. I am in summary persuaded to the required standard of proof that the 15^th August letter is not genuine either.

I should add that the resolution of the issue is perhaps of less significance than might otherwise appear. On the assumption that I am wrong and both letters were genuine, I have no doubt nonetheless that Mr Saffi was fully aware at the time when he came to give evidence before Evans J that vital correspondence was being suppressed and that the documents brought with him were misleading. In the event, whilst the learned judge was minded to reject the evidence adduced by IAC as regards the absence of inquiries made prior to Resolution 369 about registration of the Kuwaiti aircraft, he was deceived into according little significance to such steps as were taken.

I do not propose to dwell on the knowledge of Mr Al Shaikhly of the events leading up to the 17^th September or his recollection of them when he gave evidence in 1991, since it is sufficient for the purposes of this judgment to consider the position of Mr Saffi and Mr Abbo, the Director General and the newly appointed Assistant Director General (Technical) respectively.

Mr Al Shaikhly was significantly below them in the managerial structure. Furthermore, he was posted to Kuwait as from the 19^th August and was thus less well placed to become acquainted with any activity in regard to the aircraft that had by then all been flown to Iraq. It would also appear that he was not likely to have been directly concerned in preparations for Mr Saffi giving evidence in January 1992.

I accept the submission made by KAC that Mr Abbo must have been fully aware of the plans to make use of the aircraft for domestic flights to Kuwait. Mr Abbo was a very senior figure in IAC with frequent contact with Mr Saffi. The order of the Presidency Secretariat was unquestionably brought to Mr Abbo’s prompt attention – certainly no later than the 12^th August and probably before going to Kuwait on the 9^th August. He was clearly also aware of the steps taken in furtherance of that, particularly registration, insurance and employment of engineers. Indeed he was the author of the key letters on those topics on the 23^rd August, 25^th August and the 6^th September.

As regards registration, he was the author of the contemporary note on the DGCA letter of the 23^rd August. He was also the addressee of the DGCA notification of the registration letters for AOA sent on the 25^th August. As regards insurance, telephone contact between him and the insurance manager on the 25^th August was recorded in the memorandum prepared by the insurance manager that day (in which the proposed usage is described as “trade”). Furthermore I find that his deputy’s letter of the 25^th August requiring action to insure AOA for commercial use could only have been written with his express approval. The announcement dated the 4^th September of the fact that AOA was covered was sent to him personally.

Mr Saffi’s position is a fortiori. He was Director General of IAC. He was in direct contract with the Presidency Secretariat and with the Minister of Transport. He duly gave instructions to his subordinates as regards the preparation of the Kuwaiti aircraft for use on the Baghdad/Kuwait route; such is fully evident from the content of the Na’ama diary. His direct involvement in the process of absorbing the Kuwaiti aircraft within the IAC fleet is demonstrated by the fact that he was the recipient of the Presidency Secretariat order dated the 7^th August and the author of the message to all employees dated the 25^th August, not forgetting the report to the Presidency Secretariat of the 26^th August. Reflecting his hands on approach to the detailed arrangements, he was copied into the correspondence regarding insurance, registration, the preparation of inventories and the engagement of the engineers.

In their evidence before Evans J neither Mr Abbo nor Mr Saffi suggested that the events of August 1990 were difficult to recall, even if they might not have been expecting to deal with some of them. Indeed the scope of their personal involvement with the KAC aircraft in August 1990 renders it wholly improbable that they could have conceivably forgotten about almost every aspect of those remarkable events a year or so later.

To the contrary their evidence was firm and unequivocal to the effect that, save in respect of very basic maintenance, KAC had had no involvement in any activity pertaining to the KAC aircraft prior to the 17^th September. Furthermore, it is clear from my summary of the proceedings before Evans J that the suggestion by these witnesses that they had not been asked about the material matters must be rejected.

Mr Saffi, arriving as he did some two months after Mr Abbo had given oral evidence, was in an unusually good position to correct any misconceptions that might have arisen. He did not do so. Indeed there is a striking entry in the Na’ama diary for the

In any event, my findings as regards forgery imports with it a finding that Mr Abbo and Mr Saffi were only too aware of the Presidency Secretariat order of the 7^th August and the steps taken in response to it at the time of the Evans J trial. I accept that these witnesses in fact got their heads together in order to seek to support the position that IAC’S activities only began after property in the aircraft was transferred to IAC by virtue of Resolution 369. On the legal advice that had been received by IAC, this would enable IAC to avoid exposure to KAC’S claim. There was accordingly a strong motive to distort the evidence in this way.

There was no dispute between the parties as to the relevant legal principles to be applied in an application to set aside a judgment for fraud:-

On my findings so far, it is axiomatic that:-

As regards whether either or both were to be treated as IAC itself, it was common ground that Mr Saffi was the directing mind and will of IAC. If the issue was determinative, I would hold that Mr Abbo also had the status and authority to be treated as the company: R v Andrews-Weatherfoil Ltd [1972] 1 WLR 118 at p.124. At the material time he had been the Director of Quality Control with responsibility for all safety issues, including maintenance scheduling and liaison with the DGCA. By the time he gave evidence in 1991 he had been promoted to Assistant Director General (Technical) reporting direct to Mr Saffi.

I turn now to consider whether the disparity between the perjured evidence and the new evidence entirely changes the nature of the case in regard to sovereign immunity during the relevant period, being that between the arrival of the aircraft in Iraq and Resolution 369. I have already quoted from Lord Goff’s speech in respect of this

Lord Goff summarised the test at page 1160 A as follows:-

In reality, far from IAC confining itself to basic maintenance, IAC was responding to a government instruction to prepare the aircraft for commercial flights to Kuwait. Given the steps taken by way of a response, it is no longer arguable, in my judgment, that they were sufficiently related to the act of seizure to attract immunity. Per contra, IAC was, even during this interim phrase, engaged in the process of absorbing the KAC fleet and, to that end, had commenced changing the aircraft livery, re-registering them, insuring them and employing maintenance personnel. This in my judgment wholly changes the nature of the case. These acts of IAC, albeit on the direction of the Iraqi state, were not acts jure imperii.

Put another way, the basis for denying immunity in respect of the period after the 17^th September applies with equal force to the interim period. Lord Goff summarised the features of the later period as follows at page 1151D:-

I have not forgotten the submission made by IAC that it is inappropriate to treat the KAC aircraft as a fleet but that the question of the immunity must be assessed by reference to the acts undertaken in regard to each individual aircraft. However, I regard that submission as unrealistic. Whilst the process of registration, insuring and re-painting had only progressed so far as some of the aircraft were concerned, the reality is that the process was an on-going one in the context of effecting the absorption of the whole fleet. As Lord Wilberforce put it in Il Congreso del Partido [1983] AC 244 at 268:-

There remains the final question as to whether the nature of the case is changed in respect of the entire period from the 9^th August to the 17^th September. There was little, if any, argument on this issue. As I see it, IAC had already commenced activity unrelated to the original seizure when Mr Abbo and Mr Saffi flew to Kuwait on the 9^th and 10^th August respectively. As already noted, the thrust of the Presidential Order of the 7^th August was already recorded in the Na’ama diary on the 12^th August. Although the first airbus was not relocated to Baghdad until the 20^th August for painting, I do not regard it as appropriate against this background that KAC should be bound by a finding that accords sovereign immunity to IAC in respect of any activities from the 9^th August onwards.