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The world’s largest aircraft lessor AerCap can recover more than $1 billion in relation to jets stuck in Russia since the invasion of Ukraine, London’s High Court ruled Wednesday, though that is less than the roughly $2 billion it sought.
The court ruled broadly in favor of leasing companies in a multi-billion-dollar legal dispute with insurers, following a mammoth trial in one of the biggest insurance disputes ever heard in London, which concluded in February.
The lawsuit had focused on almost 150 jets and some engines, previously with a total value of up to $4.7 billion, though settlements – including on the first day of the trial in October – have whittled the numbers down.
Judge Christopher Butcher said in a summary of his ruling that the aircraft were lost and “that loss occurred on 10 March 2022, when a piece of Russian legislation banned the export of aircraft and aircraft equipment from Russia.”
That meant the lessors could recover the money lost from their “war risks insurers,” rather than under a broader all risks clause, as the cause of the loss was “an act or order of the Russian government”, Butcher said.
The judge also ruled that insurers were not prevented by European Union or US sanctions from indemnifying the claimants for the loss of aircraft that had been leased to Russian airlines.
AerCap’s law firm Herbert Smith Freehills Kramer said the judgment secured $1.035 billion for AerCap, “in addition to substantial recoveries achieved in prior settlements.”
Butcher said in his ruling that AerCap had received just over $1.3 billion from six settlements between August and December 2023 with lessees and a Russian insurance company.
AerCap, Dubai Aerospace Enterprise, Merx Aviation, KDAC Aviation Finance, Falcon and Genesis had led the claims against a string of insurers, including AIG (AIG), Lloyd’s, Chubb and Swiss Re.
KDAC settled all its claims during the trial, Butcher said in his ruling, while AerCap, DAE and other lessors have periodically disclosed partial settlements.
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