Kuwait Airways v Iraq Airways [2002]

Court: House of Lords

Facts: During the First Gulf War, Iraqi troops seized several aircraft belonging to Kuwait Airways Corporation (KAC) and took them to Iraq. After the war, KAC sought to recover the aircraft and obtain compensation for the losses. Iraq Airways Company (IAC) argued that it was immune from the lawsuit under the doctrine of state immunity, which protects states from legal proceedings in foreign courts.

Held: The House of Lords held that IAC could not claim state immunity. It had waived its immunity by its conduct, which was inconsistent with the claim of immunity. Furthermore, the seizure of KAC's aircraft was an act of aggression and a breach of international law, making IAC liable for compensation. The tort of conversion was established, as IAC's actions, including overpainting the aircraft and using them for commercial flights, indicated an intention to exclude KAC from their possession.

Key Judicial Statement: Lord Nicholls outlined a three-part test for conversion: “The conduct must be inconsistent with the owner's rights, deliberate, and extensive enough to exclude the owner from possession.”

💡LevelUpLaw: This case broadened the scope of the tort of conversion and clarified that state immunity can be waived through conduct