Iraq loses U.S. appeal over U.N. oil-for-food program suit

Reuters , Thursday 18 Sep 2014

The Red Crescent hands out aid packages in Iraq (File Photo: Reuters)

A divided U.S. federal appeals court on Thursday rejected Iraq's effort to sue dozens of companies for allegedly conspiring with the Saddam Hussein regime to frustrate the United Nations' oil-for-food program.

By a 2-1 vote, the 2nd U.S. Circuit Court of Appeals in New York said Iraq's government could not recoup damages under a U.S. anti-racketeering law because it remained accountable for the Hussein regime's effort to defraud the U.N. program, despite having repudiated that effort and the regime's legitimacy.

The appeals court, by a unanimous vote, also said Iraq could not pursue claims under the federal Foreign Corrupt Practices Act, saying the law's antibribery provision does not allow private lawsuits.

More than 80 companies, subsidiaries and affiliates were named as defendants in the 2008 lawsuit over the $64.2 billion oil-for-food program, which ran from 1996 to 2003.

Among the defendants were; the French bank BNP Paribas SA , which oversaw a U.N. escrow account for the program; Swiss engineering company ABB Ltd ; U.S. oil company Chevron Corp ; British drugmaker GlaxoSmithKline Plc and German electronics company Siemens AG.

Iraq claimed that Hussein defrauded the program by selling oil at below-market prices while receiving kickbacks, and overpaying for food and medicine in exchange for side payments.

It said the defendants' involvement deprived Iraqi citizens of more than $10 billion of essential aid that should have been paid from the escrow account.

Christian Siebott, a lawyer representing Iraq, did not immediately respond to requests for comment.

Thursday's decision upheld a February 2013 ruling by U.S. District Judge Sidney Stein in Manhattan.

"The majority decision is clearly correct," said Robert Bennett, a lawyer for BNP Paribas.

The case is Iraq v. ABB AG et al, 2nd U.S. Circuit Court of Appeals, No. 13-618. 

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