Kuwait Airways Corp v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883

Facts

  • Kuwait Airways was the legal owner of certain aircraft seized by Iraqi Airways during the Iraqi invasion of Kuwait in 1990.
  • Iraqi Airways took physical control of the aircraft, incorporated them into its fleet, and used them for commercial purposes.
  • Kuwait Airways sought legal redress for the seizure and continued use of its aircraft.
  • The dispute arose within the context of armed conflict, implicating issues of both domestic and international law.

Issues

  1. Whether Kuwait Airways had a right to possession of the aircraft at the relevant time.
  2. Whether Iraqi Airways dealt with the aircraft in a manner inconsistent with Kuwait Airways’ right to possession.
  3. Whether Iraqi Airways’ actions constituted a denial of Kuwait Airways’ title to the aircraft.
  4. Whether the principles of conversion as defined in English law applied to these circumstances, including where a foreign state and international issues were involved.

Decision

  • The House of Lords held that Kuwait Airways had a clear legal right to possession of the aircraft at the relevant time.
  • Iraqi Airways’ actions in seizing, using, and incorporating the aircraft into its own operations constituted dealing inconsistent with Kuwait Airways’ rights.
  • The continued use and retention of the aircraft by Iraqi Airways amounted to an implicit denial of Kuwait Airways’ title.
  • The court affirmed that conversion is a strict liability tort under English law, so the defendant’s intent or knowledge is irrelevant to establishing liability.

Legal Principles

  • The test for conversion requires: (1) the claimant’s right to possession, (2) the defendant’s dealing with the goods in a manner inconsistent with that right, and (3) a denial of the claimant’s title, explicit or implicit.
  • Physical possession is not required for legal entitlement; a superior possessory right is sufficient.
  • Conversion is a strict liability tort—liability does not depend on the defendant’s intent or knowledge.
  • Domestic courts may adjudicate disputes involving foreign states if within their jurisdiction, even where international law is implicated.
  • The judgment reinforces protection against wrongful interference with goods and highlights the objective standard for inconsistent dealing.

Conclusion

The House of Lords in Kuwait Airways v Iraqi Airways clarified the strict liability framework for the tort of conversion, holding Iraqi Airways liable for wrongful interference with Kuwait Airways’ aircraft and establishing a three-part test centered on right to possession, inconsistent dealing, and denial of title, with significant implications for property law and the adjudication of international disputes involving state actors.

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