World Bank body dismisses Kuwaiti logistics firm Agility’s claims against Iraq

Kuwaiti logistics company Agility’s claim to recover more than $380 million it said it lost in Iraq has been rejected by an international tribunal, a document seen by Reuters showed.

Agility, one of the largest Gulf logistics companies, was also ordered to pay Iraq more than $5 million for costs related to the case.

The company filed for arbitration in 2017 with the International Centre for Settlement of Investment Disputes (ICSID), which is part of the World Bank Group and handles disputes between international investors.

Agility has said Iraq indirectly confiscated its investment, which was worth over $380 million, and violated a 2015 bilateral protocol between Kuwait and Iraq on encouraging the movement of capital and investment between the two countries.

Agility said Iraq denied the company and its subsidiaries the ability to challenge a 2014 decision by Iraq’s National Communications and Media Commission (CMC) to annul Agility’s investment in Korek Telecom, an Iraqi mobile phone operator.

CMC’s decision was based on Korek’s not meeting conditions related to improving its services and expanding coverage, a source in the Iraqi prime minister’s office said, asking not to be named.

The World Bank body tribunal on Monday dismissed Agility’s claims, and ordered the company to pay Iraq nearly $5.2 million to cover fees related to the case, the document, a copy of the tribunal’s final decision, said.

If it does not do so within 30 days, Agility must pay Iraq interest at the six-month US dollar rate of LIBOR plus 2 percent, as of the time of the decision, on any outstanding amount, compounded semi-annually.

In a statement on Tuesday, Agility called ICSID’s ruling “fundamentally flawed” and said it was considering its options to apply for the decision’s annulment.

Iraq’s government said in a statement it was delighted with the outcome.

The tribunal’s decision hinged on the fact that the dispute predated the Kuwait-Iraq protocol and that Agility did not use all the legal avenues available in Iraq to challenge the CMC’s decision, the Iraqi source said.

“The ICSID tribunal has sent the message — not only to the Republic of Iraq, but to the international community of civilized nations — that states can expropriate investments without providing compensation to their foreign investors,” Agility said in its statement.

Iraq’s government said Agility’s response was unfair.

“Agility continues to have other business interests in Iraq which are successful. Therefore, a bad commercial investment decision on its part should not be extrapolated to criticize the Iraqi investment climate,” it said in its statement to Reuters.

Related Articles

Back to top button