Turkey Claims Iraq Owes Nearly $1bn In Net Arbitration Damages

15 Sep 2023 Issue: 66 / 37 By: Yesar Al-Maleki

Ankara has countered Baghdad’s US court petition to enforce the February ICC arbitration award, arguing that it is Turkey, not Iraq, which is owed damages. If the legal dispute drags on, Iraqi Kurdistan risks complete financial collapse from the continued outage of its crude export pipeline.

The finances of Iraq’s Kurdistan Regional Government (KRG) have been crushed ever since Ankara closed the Iraq-Turkey Pipeline (ITP) on 25 March after the Paris-based International Chamber of Commerce (ICC) ruled against Turkey’s facilitation of independent Kurdish oil exports (MEES, 31 March). The KRG is caught in the middle of the resultant legal dispute between Ankara and Baghdad.

In a 7 September response to a petition filed by Baghdad in April at a US court, Ankara claims that it is owed $956.95mn in damages from Iraq. The sum detailed in court filings seen by MEES is based on Turkey’s own calculations of interest due to each party on awarded damages, and will undoubtedly be disputed by Iraq. A protracted legal dispute greatly reduces the prospect for any near-term political compromise to resume northern pipeline exports to Ceyhan. (CONTINUED - 1768 WORDS)