Iran Wants to Sue Boeing Over Cancelled Aircraft Orders

Jun 13, 2018

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Boeing announced last week that it would not deliver a large order of aircraft to Iran, a consequence of President Donald Trump’s decision to pull out of the 2015 Iran nuclear deal. And now Iranian government officials have said they want to sue the aircraft manufacturer for not abiding by the contract.

Iran Air had placed an order for 80 Boeing aircraft in December 2016, a deal valued at $16.6 billion. Boeing also had a contract to sell 30 737 MAXs to Iran Aseman Airlines. 

Taqi Kabiri, a member of the Iranian parliament who sits on the country’s economic commission, said that Iran would pursue legal methods to punish Boeing.

“The Islamic Republic will seriously pursue the cancellation of the Boeing agreement through international, legal and judicial tribunals,” Kabiri told Iran’s Press TV. “From the very beginning, we should have gotten a strong guarantee from the aircraft manufacturer [Boeing] so that they would not be able to easily violate their contracts.”

US Treasury Secretary Steven Mnuchin said that sales of commercial aircraft to Iran must stop by August 6 or else companies could face punishment.

A Boeing spokesman provided this statement when TPG asked about a possible lawsuit:

As previously stated following the Administration’s announcement, we have followed the U.S. Government’s lead with respect to all Iran engagements. We no longer have a license to sell aircraft to Iran, so there will be no further discussions with Iranian airlines at this time.

Boeing’s rival Airbus is also expected to lose billions of dollars in orders. It has a $19 billion, 100-aircraft order with Iran Air. It’s already delivered three aircraft, an A321 and two A330s, to the Iranian flag carrier and plans on delivering 11 more before US sanctions return in August.

But how could a European company be affected by US laws and sanctions? Since Airbus sources more than 10% of its aircraft material from the US, it’s subject to US government export licenses. It received these permits in 2016, but with the new sanctions they’ll be pulled — therefore limiting Airbus’ dealings with Iranian companies.

European leaders are lobbying the Trump administration to grant an exception from US sanctions for European companies (including Airbus) that have been doing business with Iran since the nuclear deal came into effect in January 2016.

H/T: CH – Aviation

Featured image by PASCAL PAVANI/AFP/Getty Images.

This story was updated on June 13 with a statement from a Boeing spokesperson.

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