Iraqi president Fuad Masum filed a lawsuit on Wednesday against parliament speaker Salim Al Jubouri alleging that the recent passing of the federal budget violates the constitution.
The long-delayed budget of $88.5 billion (Dh325 billion) was passed by parliament on March 3 despite a boycott by Kurdish lawmakers, angry over their own region’s diminished share.
A copy of the appeal filed to Iraq's supreme court and obtained by The National, claims the agreement violates the budget allocations set for the autonomous Kurdish region and points to a federal intrusion into Kurdistan's financial affairs.
The Kurdistan Regional Government (KRG) has traditionally received 17 per cent of the national budget since the fall of former dictator Saddam Hussein – though it stopped receiving funds in 2014 when the Kurds began exporting oil to Turkey and selling it internationally. In response, Baghdad stopped sending money to Erbil.
After ISIL was driven out of the country's north last year, the Kurds held a referendum for independence, in which the overwhelming majority voted to secede.
The central government responded by launching a swift military offensive and recapturing the coveted city of Kirkuk, which had been under Kurdish control since the Iraqi forces fled an ISIL onslaught in 2014.
The recapture of Kirkuk and other disputed areas temporarily quashed the Kurds' bid for independence.
The Kurdish region still conducts independent oil sales but has access to less oil now that it no longer controls Kirkuk.
A previous draft of the 2018 budget set the portion allocated to the Kurdistan Regional Government at 12.67 per cent. Baghdad says this figure reflects the Kurdish region's share of the Iraqi population – something that is disputed by the KRG.
Mr Masum refused to approve the 2018 budget because of “legal and constitutional violations”, but approved the proposed draft last Thursday.
In a statement the president said he "would sue state agencies for issuing directives to publish the budget in violation of his own authorities."
On Tuesday, Iraq’s ministry of justice published the budget in its official gazette confirming that it has now been ratified.
Mr Masum is a Kurd and holds a largely ceremonial role in the Iraqi state where most power lies with the Prime Minister who belongs to the Shiite Dawa Party.