Iraq celebrates premature victory as Turkey only pays fraction of ruling - report
The Iraqi administration was very quick to declare triumph when the International Chamber of Commerce ruled on Thursday that Turkey breached contract by directly trading oil with Iraq’s Kurdistan Regional Government, and Ankara is likely to pay only a few hundred million dollars to Iraq, which could be indemnified by the Kurdistan Regional Government under a secret deal, Middle East Eye reported.
The Iraqi oil ministry released a statement praising the court's decision, and Iraqi officials quickly conveyed their talking points to local and international media after the court ordered Turkey to pay $1.4 billion. However, western and Turkish sources talking to the MEE said that Baghdad is misrepresenting the court's ruling on the Iraq-Turkey Pipeline (ITP) agreement, which governs the export of Iraqi oil to Turkey through the Turkish port of Ceyhan.
According to the sources, Baghdad claimed breach of contract under five categories, including storage, transportation, exclusive use, access claim, and loading, but only won their claim for loading. The court decided that KRG is an organ of the Iraqi government, making it a legitimate entity under the ITP deal.
Therefore, Turkey was not at fault while storing and transporting the oil under the instructions of the KRG. Their claim of loss of damages under exclusive use was denied, as they asked for full compensation of the oil sale income and lost.
“They can celebrate all they want, but I would definitely fire their lawyers for a botched job,” one western source told MEE.
“Another issue that Baghdad doesn’t want to talk about is Turkey’s counterclaims over a set of issues from the low capacity at the pipeline and unpaid transportation fees going back to decades,” a second western source said. “The court awarded nearly $600m to Turkey because of them.”
A Turkish source who is familiar with the 2013 KRG and Turkey oil agreement said that eventually no money would come out of Ankara’s pocket since the deal includes an indemnity clause. “Any award would be paid by the KRG, therefore by the Iraqi party,” the source said.