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The world’s biggest commercial aircraft owner AerCap is in line for a payout of more than $1bn after a High Court judge found insurers had to cover losses from planes stranded in Russia, in one of the largest sums ever awarded by the English courts.
Insurers including AIG, Lloyd’s of London and Chubb have been told to provide cover for more than 147 planes owned by a group of lessors that were stuck in Russia following the country’s full-scale invasion of Ukraine.
The size of the payout awarded to AerCap is lower than the company had sought. This is because the judge found that the aircraft should be covered under a “war risks” policy rather than an “all risks” policy, which would have resulted in a higher award.
Other aircraft leasing companies, including Merx Aviation and Dubai Aerospace Enterprise, are also set for payouts under the “war risks” policy, but the final sum is yet to be determined.
The case was among the most complex and costly cases to be heard by the High Court.
In a summary of his judgment on Wednesday, Mr Justice Butcher said the “loss occurred on 10 March 2022, when a piece of Russian legislation banned the export of aircraft and aircraft equipment from Russia”.
As a result, the cause of the loss was “an act or order of the Russian government” and should be covered by the “war risks” policy, the judge ruled.
He added that EU or US sanctions did not prevent the insurers from indemnifying the claimants for the loss of aircraft leased to Russian airlines.
Law firm Herbert Smith Freehills Kramer, representing AerCap, said the company had secured a $1.035bn payout “in addition to substantial recoveries achieved in prior settlements”.
