ERBIL, Kurdistan Region - Iraq’s highest judicial authority, the Federal Supreme Court, announced on Sunday that it has registered a new lawsuit filed by public servants in the Kurdistan Region, seeking an injunction to ensure the continued payment of their salaries. The legal action comes just days after Iraq’s finance ministry said it would cut funding to the Region, including salaries.
In a statement obtained by Rudaw the court stated, “Today [Sunday], a lawsuit was filed by [public] employees from the Kurdistan Region demanding the continued disbursement of salaries on schedule.”
The plaintiffs are “requesting the issuance of an injunction order to compel the federal finance ministry to resume salary disbursements” in accordance with a previous ruling - federal court decision No. 224 and its consolidated case 269/Federal/2023, dated February 21, 2024.
That ruling obliges both the federal government and the Kurdistan Regional Government (KRG) to ensure regular salary payments to all public sector employees, retirees, and social welfare recipients in the Region. It explicitly states that disputes over oil and non-oil revenues between Baghdad and Erbil must not be used as a pretext to withhold constitutionally protected monthly salaries.
“A decision on the request to issue an injunction order will be made as soon as possible,” the court concluded.
The lawsuit comes as tensions have been simmering between Baghdad and Erbil after the Iraqi finance ministry on Wednesday announced that the federal government would suspend all budget transfers to the Kurdistan Region, including salaries for over one million civil servants.
In a letter she sent to the KRG, Iraqi Finance Minister Taif Sami claimed that Erbil had exceeded its 12.67 percent budget allocation for 2025 by 13.547 trillion Iraqi dinars (approximately $10.34 billion). She argued that, under rulings from the Federal Supreme Court, further payments to the KRG under such circumstances are legally prohibited.
The KRG’s Finance Ministry responded on Thursday, accusing the federal ministry of violating the constitution. It added that the Kurdistan Region’s share of funds “must be based on collected federal revenues, not actual expenditures.”
Baghdad’s move has drawn strong criticism from Kurdish political factions, who held a meeting on Saturday, chaired by the ruling Kurdistan Democratic Party (KDP), and denounced the funding suspension as a politically motivated action that undermines the constitutional and legal status of the Kurdistan Region.
The parties said Baghdad must not politicize the rights of civil servants and said that they favored resolving the matter through dialogue.
Speaking to Rudaw on Saturday, senior KDP official Hoshyar Zebari questioned the timing of this decision.
“What is the interest of Mr. [Iraqi Prime Minister Mohammed Shia’] al-Sudani and the ruling [Shiite-led] Coordination Framework in igniting the crisis of funding salaries for regional employees at this particular time, while the country is approaching national elections?” Zebari asked, adding that “perhaps these are technical issues at play,” Zebari stressed.
Finances are a frequent source of friction between Erbil and Baghdad. In stopping the payments, Baghdad accused Erbil of failing to hand over its oil and non-oil revenues and claimed that the KRG had received its full share of the federal budget for 2025.
The KDP said on Thursday that it would take a “serious stance” if Baghdad fails to pay the May salaries by June 6, which coincides with the Islamic holiday Eid al-Adha.
The finance ministry’s decision to cease payments to Erbil came on the heels of the KRG inking two new oil and gas deals with American firms, drawing the ire of Iraq’s oil ministry, which has taken legal action.
A delegation from Baghdad is expected to visit Erbil and meet with top Kurdish officials and politicians to resolve the financial issues.