By Jonathan Stempel

NEW YORK (Reuters) - A U.S. judge on Wednesday dismissed Iraq's lawsuit accusing dozens of companies of conspiring with Saddam Hussein's regime to frustrate the United Nations' oil-for-food program, and depriving Iraqi citizens of roughly $10 billion of essential aid.

U.S. District Judge Sidney Stein in Manhattan said the government of Iraq could not recover damages and other remedies under a U.S. anti-racketeering law because most of the wrongful conduct took place in foreign countries.

He also said Iraq failed to allege the companies' conduct was a key reason for the injury, and that Hussein's conduct was as a matter of law attributable to the current government.

"The court rejects Iraq's view that it may sidestep responsibility because the conduct was illegal or the actors held power illegitimately," he wrote.

More than 90 companies, subsidiaries and affiliates were named as defendants in the 2008 lawsuit over the $64.2 billion oil-for-food program, which ran from 1996 to 2003.

Among them were French bank BNP Paribas SA, which administered a U.N. escrow account for the program; Swiss engineering company ABB Ltd; Dutch chemicals company Akzo Nobel NV; U.S. oil group Chevron Corp; German automaker Daimler AG; British drugmaker GlaxoSmithKline Plc, and German electronics company Siemens AG.

"It is clearly the right decision," said Robert Bennett, a partner at Hogan Lovells, representing BNP Paribas. "I am enormously pleased."

Lawyers for other defendants were not immediately available for comment.

Christian Siebott, a partner at Bernstein Liebhard, who represents Iraq, did not immediately respond to requests for comment.

SURCHARGES AND KICKBACKS

The U.N. program let Iraq sell oil to finance the purchase of food, medicine and other goods for citizens hurt by international trade sanctions.

Many of the current government's allegations had been drawn from a scathing October 2005 U.N. report by a panel led by former U.S. Federal Reserve Chairman Paul Volcker.

According to the report, Iraq had sold $64.2 billion of oil to 248 companies under the oil-for-food program, while 3,614 companies sold $34.5 billion of humanitarian goods to Iraq.

Oil surcharges were paid in connection with the contracts of 139 companies, and humanitarian kickbacks in connection with the contracts of 2,253 companies, the report said. Continued...