UK Court Blocks $1B Appeal by Insurers Over Russian Jets
The UK High Court has denied Western insurers permission to appeal a ruling that compels them to pay aircraft lessors more than USD1 billion under war risks insurance policies for jets stranded in Russia following the invasion of Ukraine. The decision, delivered verbally by Judge Christopher Butcher on September 16, leaves the insurers liable while reserving judgment on legal costs. A written judgment date has not yet been set.
The case involves leading insurers and reinsurers, including AIG, Lloyd’s, Chubb, Swiss Re, Fidelis, Liberty Mutual, and Lancashire Insurance Company. In June, Judge Butcher ruled that six lessors — AerCap, Dubai Aerospace Enterprise (DAE Capital), Merx Aviation Finance, KDAC Aircraft Leasing, Falcon 2019-1 Aircraft 3 Limited, and Genesis Aircraft Services — could recover losses under war risks policies but rejected AerCap’s bid for a higher payout under uncapped all-risks coverage.
The dispute covers 147 aircraft, 16 engines, and one additional piece of equipment, once valued at up to USD4.7 billion, making it one of the largest commercial cases ever heard in London. The outcome is seen as a test case for similar lawsuits in the US and other jurisdictions.
During the trial, KDAC settled with its insurers, while Merx settled with Chubb. AerCap, the world’s largest lessor and biggest claimant, reported legal expenses of around GBP81 million (USD110.5 million). The case, AerCap Ireland Limited v. AIG Europe S.A. and another (CL-2022-000294), underscores the scale of the financial fallout from jets stranded in Russia due to sanctions.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com