Claims Processing

     As a subsidiary organ of the Security Council, the Commission operated within the framework of the Council’s resolutions, particularly resolutions 687 (1991), 692 (1991), 986 (1995) and 1483 (2003) that together established the Commission, its jurisdiction, its policy guidelines and its financing.  

     As those resolutions made clear, the Commission was established to process claims and pay compensation for losses and damage suffered by individuals, corporations, Governments and international organizations as a direct result of Iraq’s unlawful invasion and occupation of Kuwait. The legal responsibility and liability of Iraq for those losses and damage was established by the Security Council and expressly accepted by the Government of Iraq. The Commission was thus neither a court nor a tribunal with an elaborate adversarial process. Rather, the Commission was created as a claims resolution facility that could make determinations on a large number of claims in a reasonable time. As such, the Commission operated more in an administrative manner than in a litigation format. The Commission’s claims processing procedures were prescribed by the Security Council, further elaborated in Governing Council decisions and implemented by the Panels of Commissioners. 

      At an early stage, the Governing Council established at the specific parameters for the resolution of claims. At its first session, held from 23 July to 2 August 1991, it identified the types of claims that were later organized into the six categories of claims detailed in the previous section. By June 1992, it adopted Decision 10 approving the Provisional Rules For Claims Procedure (“the Rules”) annexed to the decision, governing all aspects of the processing of claims as well as the selection and appointment of Commissioners. Further elaborations of the Rules were made subsequently, as the need arose, for instance in Governing Council Decisions 35 and 114.

     In a remarkable and important decision, the Governing Council granted priority to individual claimants in both the processing and the payment of claims. Specifically, the Council decided to expedite and treat on an urgent basis the resolution of claims of individuals who were forced to leave Iraq or Kuwait (category “A”); the claims of those who suffered serious personal injuries or whose spouse, child or parent died (category “B”); and the claims of those who suffered personal losses of up to US$100,000 (category “C”). Given the traditional emphasis in previous proceedings on the losses suffered by Governments and corporations, this humanitarian decision to focus first on urgent individual claims marked a significant step in the evolution of international claims practice.  

     Given the large numbers of claims in categories “A” and “C”, the relatively small amount of compensation sought by each claimant and the acceptance by Iraq of legal responsibility for damage arising directly from its invasion of Kuwait, a detailed individual review of these urgent individual claims was neither warranted nor feasible. To deal with these claims in an efficient, fair and impartial manner, the Commission employed, in addition to individual review of claims where necessary, a variety of internationally recognized techniques for claims processing, including computerized matching of claims and verification information, sampling, and, for some loss elements in category “C”, statistical modelling. Category “B” claims, on the other hand, being relatively few in number, allowed the Panel concerned to resolve them largely through a claim-by-claim review.

     In case of the larger individual claims (category “D”), the claims by corporations (category “E”) and the claims by Governments and international organizations (category “F”), the Commission was limited in the expedited procedures that it could employ for their resolution, because many of these claims were complex and sought large amounts of compensation, and because the Rules required that each be reviewed individually. Nevertheless, the similarity of loss types and issues across significant numbers of claims enabled the Commission to employ precedent-setting procedures, which ensured efficiency, fairness and equal treatment in the processing of subsequent and similar claims. To the extent that claims in a particular category or sub-category possessed similar legal and factual characteristics, the Commission attempted to resolve such common issues and develop standard valuation methods during the Panels’ review of the first instalment of such claims. Once relevant legal and factual precedents had been established, the Panels applied them as appropriate in their review of subsequent instalments of claims, thus limiting their work to the verification and valuation of the claims and the calculation of any allowable compensation.  

     The procedure leading up to and guiding the review of claims by the Panels of Commissioners was as follows:

     First, there was the registration of each claim and the organization and computer coding of the claim files. Where possible, this was followed by the grouping of claims according to loss types and similarity of factual, legal and valuation factors. Next, there was a formal review of the claims, undertaken by the Secretariat. Thus, the Secretariat checked the compliance of the claims with certain formal requirements under the Rules. If there were any deficiencies, the claimant was requested to make rectifications within the time period specified in the Rules.  

     Claims undergoing formal review were included in quarterly reports of the Executive Secretary to the Governing Council issued pursuant to article 16 of the Rules (“Article 16 reports”). These reports listed the total number of claims covered and, for each country, the relevant category and total amount of compensation sought. The reports also indicated significant factual and legal issues raised by the claims. The reports were made available to the Governing Council, the Government of Iraq and to all Governments and international organizations that had filed claims (whether on their own behalf or for other claimants), with an invitation to submit within 90 days (for claims in categories “D”, “E” and “F”) any additional information and views they had on the issues raised. The information so submitted was subsequently taken into consideration by the Panels of Commissioners.  

     Before submitting the claim files to the Panels, the Secretariat, acting upon guidance from the Panels, was able to request a claimant to provide further information and documentation deemed necessary to complete the file and to enable the Commissioners to perform a substantive review of the claims.

     The Executive Secretary then submitted the claims in “instalments” to the Panel of Commissioners appointed to review the group of claims in question. The main criteria for the selection of claims for inclusion in an instalment were: the date of the filing of the claim; the compliance of the claim with the filing requirements of the Rules; the homogeneity of the instalment with respect to types of claims, losses claimed and issues raised; geographical balance among the countries represented in the instalment; manageability of the instalment during the review period given to the Panel; and the Commission’s Work Programme.  

     The submission of a particular instalment of claims to a Panel of Commissioners was accompanied by the responses received by Iraq and claimant Governments to relevant Article 16 reports and any additional information and/or documentation provided by the claimants in response to Secretariat requests. Where appropriate, the results of on-site inspections undertaken at the request of the Panel by the Secretariat with outside expert consultants were also made available to the Panel.

     In most instances, these various sources of documentation and other evidence were sufficient for the Panel to establish the facts of a claim, to determine whether the claim was a direct loss resulting from Iraq’s unlawful invasion and occupation of Kuwait, and, where appropriate, to calculate the amount of compensation to be recommended to the Governing Council. Any further evidentiary input in the review process by either the claimants or by Iraq depended on the extent to which the Panel found such input to be necessary. For instance, in “unusually large or complex” claims, particularly where Iraq had been a contracting party, the relevant Panel could decide to make claims files available to the Government of Iraq, and to request additional written submissions from Iraq. Furthermore, the Panels could invite both the claimants and Iraq to participate in oral proceedings (see Decision 114).

     A strict time limit was set for the Panels of Commissioners to deal with each instalment of claims. Claims were normally resolved by Panels within six months. The time frame may have been extended to twelve months in the case of “unusually large or complex” claims, and up to 18 months where the Governing Council so decided (see Decision 35).

     Upon completion of its review of a particular instalment of claims, each Panel of Commissioners submitted a written report through the Executive Secretary to the Governing Council on the claims received and, for each claim, the amount of compensation recommended. The reports also provided brief explanations as to the reasons for the recommendations.  

     The amounts recommended by the Panels of Commissioners were subject to approval by the Governing Council, and the Governing Council could increase or reduce the amounts where it determined that the circumstances so required. Furthermore, while the Governing Council could return a particular claim or group of claims for further review by the Commissioners, this was never done in practice.

     The decisions taken by the Governing Council on compensation awards were final and not subject to appeal or review. Governing Council decisions and the associated Panel reports are publically available and on this web site, excluding the identities of individual claimants and any other information determined by the Panels to be confidential or privileged.  

     The processing of all claims submitted to the Commission was concluded in 2005.