Qatar Airways Seeks $5 Billion Compensation For Gulf Blockade

Filed Under: Qatar

Qatar Airways is seeking $5 billion in compensation from nearby countries, following an International Court of Justice (ICJ) ruling that has positive implications for the airline.

Basics of the blockade against Qatar Airways

The Qatar blockade began in June 2017. With this, Bahrain, Egypt, Saudi Arabia, and the United Arab Emirates, introduced a land, sea, and air embargo on Qatar. This has had a major impact on Qatar Airways, since the airline has been restricted from using airspace of nearby countries.

If you’ve flown Qatar Airways in recent years and have looked at the map for your flight, you may have noticed that your routing wasn’t all that direct.

Map for a recent flight from Cape Town to Doha

Qatar Airways has been trying to battle the legality of the blockade basically since it started. While countries have the right to cut off trade and close borders with one another, under the Convention of International Civil Aviation, they don’t have the right to restrict airspace in the way that has been done.

The airline recently won a big victory in this regard, as the United Nations’ Court of Justice ruled that the ICAO has the jurisdiction to prevent these kinds of blockades.

While the ICJ didn’t explicitly rule in Qatar Airways’ favor, the idea is that this paves the path for these flight rights to be restored.

Qatar Airways seeks $5 billion in damages

Qatar Airways is wasting no time. Following the ICJ’s ruling, the airline has launched an international investment arbitration against Bahrain, Egypt, Saudi Arabia, and the United Arab Emirates, in which it is seeking at least $5 billion in compensation.

The arbitration seeks redress for the blockading states’ actions to remove Qatar Airways from their markets and to forbid the airline from flying over their airspace. It’s argued that the airline has made substantial investments in the four blockading countries over the past three decades, and that this blockade has undone all of that effort.

The airline is seeking full compensation for damages in four investment arbitrations, brought under three treaties, including:

  • The OIC Investment Agreement
  • The Arab Investment Agreement
  • The bilateral investment treaty between Egypt and Qatar

The Notices of Arbitration claim that by imposing these measures, the blockading countries have violated their obligations under the agreements, including by expropriating and failing to adequately protect and secure Qatar Airways’ investments, discriminating against Qatar Airways, and failing to provide fair and equitable treatment to the airline and its investments.

As Qatar Airways CEO, Akbar Al Baker, describes this:

“The decision by the blockading states to prevent Qatar Airways from operating in their countries and flying over their airspace is a clear breach of civil aviation conventions and several binding agreements they are signatories to. After more than three years of efforts to resolve the crisis amicably through dialogue yielded no results, we have taken the decision to issue Notices of Arbitration and pursue all legal remedies to protect our rights and secure full compensation for the violations. The blockading states must be held accountable for their illegal actions in the aviation sector, which includes a failure to comply with their obligations under bilateral agreements, multilateral agreements and international law.”

Qatar Airways is seeking compensation from four countries

Bottom line

It’s understandable that Qatar Airways is going all out in getting its air rights restored for the countries involved in the blockade. One would think that Qatar Airways’ focus would be on the restoration of air rights rather than filing a lawsuit, but I guess the airline hopes that one action may lead to the other.

Qatar Airways does by all accounts seem to be in the right here when it comes to the legality of the blockade. That doesn’t necessarily mean the countries involved in the blockade will give in, though. I would imagine damages over the blockade are an even more complex issue.

This will be an interesting situation to watch…

Comments
  1. Aha, this should be exciting. My original thought was “Al-Baker’s being extra again. On what grounds is he filing this claim?” Then I read of the treaties which appear to be intact :D.

    On another note about the airline, I sincerely hope they get to keep their Brisbane route. Thinking about going next year, hopefully all will be alright by then.

  2. Very cool, to see there is action going on now!
    I hope they all bleed and it should be even more than those $5 Billion, especially as it was based on 1 countries lead (Saudi Arabia) only and other followed as it was convenient.
    Hope Egypt bleeds to death on this, as Religion should NEVER be a reason to follow somebody else. Judging others is easy, but they never looked at how much sh*** those countries have on there own stick!
    From the Business loss as well as the ecological burden on all that, which most people keep forgetting if you need to fly for a rout that usually takes 2 hours now have a flight time of 3 1/2 hours, that’s nuts and helps nobody!
    Being afraid of competition sometimes leads to crazy actions, like this one!

  3. “Qatar Airways does by all accounts seem to be in the right here when it comes to the legality of the blockade.”

    I doubt most countries would support Qatar on this front. If ICAO rules that Qatar can’t be stopped from using the airspace of other countries it could have some serious consequences.

    Wouldn’t that be the equivalent of a country not having authority over who gets to use it’s airspace?

    How is that any different from Israeli flights being banned from Qatari Airspace?

    I’m with UAE on this one, they should have the final authority over who uses their airspace.

  4. @Lucky – Will we see flying rights restored, particularly DXB to DOH via QR, anytime soon?

  5. @Andre – The odds of that happening is kinda low. The ruling mainly focused on the airspace restrictions. And while I’d say they get to use their airspace, they can’t really fly into DXB/AUH/RUH/BAH because these governments own the territory and it’s no longer an -international territory/airspace-.

    I could be wrong here…

  6. Could Qatar Airways ask for aircraft belonging to airlines owned by these countries to be impounded? If so, this could get interesting real fast.

  7. As alluded to by some other commenters, I would be interested to hear how this differs from Israeli flagged aircraft, and aircraft bound for TLV.

  8. These four countries should be ashamed of them selves! Qatar such a beautiful country has to deal with this crap. Saudia Arabia, United Arab Emirates, Egypt, and Bahrain- That is DISGUSTING and VERY STUPID

  9. Good for QR. But lots of luck collecting, even if they are awarded damages. Governments always believe they are exempt from the rules they impose on others.

  10. Even if these countries were to reopen airspace to Qatari flagged aircraft there is a serious corporate security question about whether QR would want to use them. It could risk their insurance coverage.

    Every country has sovereign rights over their airspace. The difference is that the four blockading countries are party to the various international investment treaties quoted, essentially contracts, that require them to open their airspace to Qatari flagged aircraft. That is the difference to the Israeli example.

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