Insurance firms fail in Moscowbid for case over seized jets

As many as 20 insurers and reinsurers wanted to have claims regarding 400 aircraft worth €15bn heard in Russia

Efforts by reinsurance companies to move from London to Moscow litigation involving as much as €15bn of aircraft that were seized in Russia after it invaded Ukraine have been dismissed by the UK’s High Court.

Aircraft leasing firm Carlyle Aviation Partners welcomed the decision made on Thursday.

“We welcome today’s ruling which exposes the tactics of a faction of international insurers who are in breach of their contractual obligations,” said a spokesperson.

“Without further delay, we intend to vigorously pursue our claims against all insurers who have failed to provide coverage for losses in the courts of London, as is the right and proper jurisdiction,” they added.

On Thursday morning, Justice Christopher John Butcher, dismissed the challenges by remaining reinsurers that had contested the jurisdiction.

The number of insurance firms seeking to move the litigation to Moscow had declined in recent months as some withdrew their opposition to the London court hearing the action. Among those that dropped their opposition were Swiss Re and Chubb.

But as many as 20 insurers and reinsurers that are defendants in the case still wanted the claims in relation to about 400 aircraft heard in Russia. They include AIG, Axa, and some syndicates of Lloyd’s of London.

Last year, the High Court in London joined together a group of 40 damages claims being brought bylessors includingAerCap, Aircastle, Carlyle Aviation Partners and Merx Aviation against the insurance firms. The action was later joined by other lessors including Avolon, SMBC Aviation Capital and Bank of China Aviation.

Avolon has also been pursuing its own action in Ireland against its own insurers.

The action in London relates to the insurance and reinsurance policies of the Russian airlines to whom Avolon and other lessors had leased their aircraft.

When lessors leased aircraft to customers in Russia, cover was secured from Russian insurance companies. But those insurance companies then reinsure the jets in London. While the insurance contracts provide that disputes be resolved in Russia under Russian law, sources have previously insisted that such a move is untenable.

A leasing source claimed that the insurance industry has been cynical in its efforts to deflect attention from the lessors’ litigation by challenging the London court’s jurisdiction and “avoid paying”.

They have previously claimed the effort to have the actions heard in Moscow is a “gross exploitation” of Russia’s invasion of Ukraine.

It was unclear how an action would even proceed in Russia given the wall of sanctions that has been erected by the EU, the US and others against the country since the invasion.

An upcoming high-profile trial of cases taken by aircraft leasing giants against insurers in Dublin has struggled to be housed.

The cases in Ireland are being taken by lessors including SMBC Aviation Capital, BOC Aviation and CDB Lease Finance, as well as Wilmington Trust. They also relate to aircraft assets seized in Russia following its invasion of Ukraine in 2022.

Theyare suing a numberof insurers, including Lloyd’s, AIG, Chubb and Swiss Re, for allegedly declining to covertheir losses either under‘all risks’ or ‘war risks’ policies.