- Associated Press - Tuesday, August 26, 2014

HOUSTON (AP) - A federal judge ruled in favor of the Kurdistan Regional Government on Monday by tossing out an order for U.S. marshals to seize and turn over to Iraq crude oil from a tanker anchored off of Galveston.

The Houston Chronicle (https://bit.ly/1mLAh7G ) reports U.S. District Judge Gray Miller ruled Monday on the vessel that has been waiting in the Gulf of Mexico for nearly a month. He said the U.S. lacks the authority to seize the oil because Kurdistan’s ownership dispute with Iraq involves the location where the oil was pumped, not the coastal waters.

Iraq has 10 days to file an amended complaint.

The United Kalavryta carries about 1 million barrels of oil produced in the semiautonomous Iraqi region of Kurdistan.

The Kurdish and Iraqi governments both claim ownership. Iraq has sued to stop the cargo from being offloaded in the U.S. and has threatened any company that touches what it considers to be stolen oil.

The tanker has not offloaded its cargo, according to ship tracking data updated late Sunday night.

Kurdistan has said in legal briefings it plans to unload the oil soon. However, because the ship is too large to travel through the Houston Ship Channel, smaller vessels are needed to move the cargo. Iraq’s attorneys have sent letters warning maritime companies not to transport oil from the tanker.

Miller said Iraq may be able to file a claim directly against the Kurdistan Regional Government under the Foreign Sovereign Immunities Act, a U.S. law that governs how foreign entities may be sued, opening the door for a new round of litigation in an ownership battle that has been playing out for years in Iraqi courts.

Attorneys in the case could not be reached for comment by the Houston Chronicle late Monday.

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Information from: Houston Chronicle, https://www.houstonchronicle.com

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