Janeen M. Carruthers and Elizabeth B. Crawford, KUWAIT CORPORATION v. IRAQI AIRWAYS COMPANY, International & Comparative Law Quarterly

Introduction

Kuwait Corporation v. Iraqi Airways Company[1] is one such case under Private international law, which brings into light various issues pertaining to the choice of jurisdiction and choice of law in a cross border tort law dispute. Therefore, Janeen M. Carruthers and Elizabeth B. Crawford in the Article ‘Kuwait Corporation v. Iraqi Airways Company’ critically analyze the decision of House of Lords in this case. The article has been divided in nine sections dealing with various aspects of the case including the dissenting opinion of Lord Scott.

Analysis of Article

In the introduction, the authors explain the relevance of the case Kuwait Corporation v. Iraqi Airways Company. This case exemplifies the challenges and problems related to the choice of law. Even if the lex cause has been identified, the question arises as to whether the whole corpus of lex cause is to be applied? It lies at the discretion of the forum. Also, the case underscores the artificiality of the English Court in applying the law of the forum (rule of double actionability) to the foreign tort. All these aspects illustrate that how the choice of forum impacts the decision in the dispute.

Facts of the Case

The authors also explain the facts of the case in very brief. Iraqi military forces occupied Kuwait and Revolutionary Command Council of Iraq (‘RCC’) passed resolutions claiming sovereignty over Kuwait and transferred ten commercial aircrafts belonging to Kuwaiti Airways corporation (‘KAC’). Later on, by passing Resolution 369, KAC was dissolved and all properties belonging to it were transferred to Iraqi Airways Company (‘IAC’). As a consequence of these events, KAC initiated proceedings against IAC and Republic of Iraq for return of aircrafts, or payment of value and damages.

At first instance, Mance J. ruled in favour of KAC, however, Aikens J. dismissed the claim.  Therefore, KAC appealed against the decision of Aikens J. and IAC against the decision of Mance J. the Court of Appeal, however upheld the claim only against six aircrafts as other four aircrafts were destroyed in coalition bombings. Then, the appeal was made in House of Lords, where IAC prayed the Court to dismiss the whole claim and KAC cross appealed that the claims as to four aircrafts must also be allowed.

Issue of Jurisdiction

Then, the authors proceed to discuss the jurisdiction issue raised in this case. The English Court assumed the jurisdiction in this case despite of the fact that England had no significant connection with the case. The matter involves only two States- Iraq and Kuwait. English Court in order to assume the jurisdiction rejected the claim of forum non conveniens and applied its own law in a matter of foreign tort. Also, the authors highlight that the case raises the concern relating to inadequate safeguard while exercising the discretion and inappropriate assumption of jurisdiction by the English Court.

Further, the article discusses about the choice of law issue where the rule of double actionability was applied by the Court. Rule of double actionability permits the assumption of jurisdiction by the domestic Court (here, English Court) when it is actionable under the law of the forum as well as in the State where the wrong has actually occurred. Therefore, the question that arose here is whether Kuwait has been divested of the ownership of the property after Resolution 369 was passed by Iraq? The Court, based on policy considerations, held that Kuwait still owes those properties. Therefore, the rule of double actionability was applied, and the English Court assumed Jurisdiction in the matter.

Interaction between Public International Law and International Private Law

The fifth section of the article deals with interaction between public international law and international private law. Annexation by Iraq was against the public international law and therefore, against English public policy. Therefore, the question was whether Resolution 369 should be excluded from the corpus of foreign law as it is against the English public policy? If applied, then the English Court would not be able to assume jurisdiction over the matter as the claim would no longer be actionable in Iraq (that is the place where tort occurred) because rule of double actionability would fail. So, a dilemma can be witnessed here that whether Resolution 369 should be included in the corpus of foreign law or not?

Ultimately, however, the majority decided to remove Resolution 369 from the corpus of Iraqi law as it was against the international public policy as such kind of annexation is inconsistent with the international law. Also, there is a Resolution of Security Council[2] that no state shall directly or indirectly recognize any aspect of annexation.

 In the sixth section, the authors have rightly criticized the heavy reliance placed by the Court on the case of Oppenhiemer v. Cattermole[3] where it was opined that the English Court can deny the recognition of a law which violates the public international law. However, it was merely an obiter and not a binding decision. Placing heavy reliance on such case is not, according to the authors, a right approach.

The Court also discussed the case of Williams and Humbert v. W & H Trademarks (Jersey) Ltd[4]., where the foreign confiscatory laws were divided in two categories- laws which are discriminatory in nature (Class I laws) and laws which are refused to be enforced due to policy considerations (class II law). The present law (Resolution 369) is not discriminatory in nature, but obviously is against public international law. Generally, the application of public policy under private international law is limited. But, this case has enlarged the application by denying the application of a foreign law on the ground that it is in violation to public international law. Also, the decision was to give effect the resolution of United Nations.

Examination of Court’s decision

In the seventh section of the article, the authors examine the decision of the Court to remove Resolution 369 from the corpus of Iraqi law and application of modified version of the law to satisfy second limb of the double actionability test. The authors find the interpretation of double rule and its exception by The English Court as surprising and problematic. They argue that the Red Sea[5] exception does not introduce a ‘better law approach’ where a part of foreign law can be completely rejected on the ground of being repugnant to the law of the forum.

The law of the place where the tort occurred can be displaced only when another legal system has a strong connection with the matter in question. Also, there has been no precedent related to the application of a part of the foreign law under the double actionability rule. Complete rejection of the foreign law might have been a better option than applying a part of it. Also, the authors has rightly pointed out the fact that the Court did not try to examine the connection of English and Iraqi law with the case because English law had no real connection with the case.

Then, the authors analyses the dissenting opinion of Lord Scott. He held that rule of double actionability is not satisfied as IAC’s action was lawful and English Court could not decide that what was the law of Iraq at tempus inspiciendum. The authors argue that recognizing a foreign law, whether actively or passively, amount to giving effect to it. Therefore, sometimes rejecting application of foreign law if it violates public policy is more acceptable.

 Lastly, the authors conclude that the Court should not have pick and choose some parts of the foreign law to be applied in the case. The authors criticize such application of foreign law. The authors are of the view that either the Court should have completely applied the Iraqi law or should have refused to apply it entirely. The Court should not have modified the Iraqi law purposely in order to assume jurisdiction.

Conclusion

It can be concluded that the inferences drawn by the authors regarding the decision is right as to the various aspects discussed in the case. Also, the author has provided a very detailed explanation and analysis of the decision from the perspective of both public and private international law. The author has discussed about the public policy considerations in great detail, which is one of the vital concepts under private international laws.

To read more content on similar topics click here.

Reviewed by Jeet Sinha.

---

[1] [2002] 2 AC 883.

[2] UNSC Res. 662 (1192).

[3] [1976] AC 249.

[4] [1986] AC 368.

[5] Red Sea Insurance Company Limited v Bouygues SA [1995] 1 AC 190.