While the oil industry's practices under the Iraqi government of Saddam Hussein are regrettable, U.S. law must be applied fairly, a court ruled.
The 9th Circuit Court of Appeals in California overturned a 2010 ruling by a Los Angeles federal judge in the case of Terenkian et al. vs. Iraq.
Manuel Terenkian, a U.S. citizen, filed a lawsuit against Iraq for a decision by a state-owned company to cancel contracts for his companies, Marblearch Trading Ltd. and Pentonville Developers Ltd.
Terenkian said the Iraqi government canceled the contracts after he refused to pay bribes. He was seeking more than $6 million in the lawsuit.
The court, however, ruled that Iraq was protected under the Foreign Sovereign Immunities Act of 1976. While dissenting Judge John Noonan said there's "nothing specifically sovereign about bartering for oil," the majority ruled in Iraq's favor.
"Although we may decry the practices conducted by the regime of Saddam Hussein, we best serve our nation's principles of equity and justice by applying the law in a fair and even-handed manner to all parties before us," wrote Judge Sandra Ikuta for the 2-1 majority.
The contracts in question were awarded under the U.N. Oil-for-Food Program that allowed Saddam's government to sell oil in exchange for non-military goods.