The United Kingdom's House of Lords has
ruled that Kuwait Airlines (KA) is entitled to recover a further
$150 million plus interest from war risks insurers for losses
incurred as a result of the 1990 Iraqi invasion of Kuwait,
solicitors for KA said in a statement on Thursday.
The ruling by the House of Lords — the U.K.'s highest Court
of Appeal — relates to the value of spares, equipment and
engines seized by Iraqi forces following the invasion.
It overturns earlier decisions in favor of the underwriters
in the Commercial Court and the Court of Appeal, KA's solicitors
Elborne Mitchell said.
Subject to proof of the sum, KA will now recover another
$150 million plus nine years' interest, which is thought to
total some $250 million, Elborne Mitchell said.
The war risks insurers and their reinsurers, led by the
Merrett Syndicate at Lloyd's of London insurance market, had
paid $300 million to cover the loss of 15 aircraft in September
1990 but argued that the policy prevented any further recovery.
Andrew Pincott, senior partner at Elborne Mitchell said the
value of the spares, equipment and engines in Kuwait at the time
of the loss was above the maximum covered by the policy and
that a reconstructed inventory showed a total of nearly $300
million.
As the original insurance contract was underwritten in 1990,
the exposure of Lloyd's syndicates now lies with Equitas, the
reinsurance and run-off vehicle set up by Lloyd's to pay its
1992 and prior non-life liabilities.
Jim Burcke, head of communications at Equitas, said: "We
are assessing the exact impact of the ruling," but declined to
comment further.
