* Agility says case is at most a contract dispute
* Arraignment follows 18 months of legal argument
* Case is politically sensitive in Kuwait and Washington (Adds detail on timing of trial)
By Matthew Bigg
ATLANTA, Aug 16 (Reuters) - Kuwaiti logistics firm Agility (AGLT.KW) pleaded not guilty on Tuesday to charges it defrauded the U.S. government over multibillion-dollar supply contracts during the war in Iraq, a senior company official said.
The case is politically sensitive in Washington and Kuwait because Agility was one of the largest suppliers to the U.S. Army in the Middle East during the war in Iraq and is accused of overcharging over 41 months on $8.5 billion in supply contracts.
The arraignment followed around 18 months of legal argument over whether the company was correctly served by U.S. prosecutors when it was first indicted in 2009.
But a trial is likely to be many months away in part because of the large number of documents that need to be read by the defense, according to analysts.
There are at least 10 million pages of government documents and 1.2 million e-mails, said Patrick Crosby, public affairs officer at the U.S. Attorney’s Office. He added the next status conference is set for Oct. 4.
The arraignment signed by U.S. District Judge Alan Baverman cited parent company Public Warehousing Company, K.S.C., a/k/a Agility (“PWC”) and Agility DGS Logistics Services Co, K.S.C.
“Agility welcomes the opportunity to clear its name by having an impartial jury examine its work supplying food to U.S. forces in Iraq and Kuwait,” said a statement by the company.
“In bringing this case, the U.S. Department of Justice has criminalized what is, at most, a civil contract dispute. Agility, as it has stated for nearly two years, remains open to a resolution of the case, but its focus is now on bringing the facts to light before a jury.”
The case is the United States of America v. the Public Warehousing Company K.S.C. also known as Agility, et al. It is numbered 1:09-cr-00490-TWT -AJB and was filed in the United States District Court for the Northern District of Georgia, Atlanta Division. (Editing by Andre Grenon)