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Aercap, the world’s largest commercial aircraft owner, is lined up for more than $1 billion after a high court judge ruled that the insurer must cover losses from planes left behind in Russia in one of the largest amounts ever awarded by a British court.
Insurance companies such as AIG, London’s Lloyd and Chubb are said to cover more than 147 planes owned by a group of lenders who were stuck in Russia following the full-scale Ukraine invasion.
The payments awarded to Aercaps are lower than the company wanted. This is because the judge found that the aircraft were subject to a “war risk” policy, not a “all risk” policy.
Other aircraft leasing companies, including Merx Aviation and Dubai Aerospace Enterprise, are also set to pay under the “war risk” policy, but the final total has not been determined yet.
This was one of the most complicated and expensive cases that the High Court should hear.
In a summary of the ruling on Wednesday, Judge Butcher said, “The losses occurred on March 10, 2022, when Russian law banned the export of aircraft and aircraft equipment from Russia.”
As a result, the judge ruled that the cause of the loss was “the act or order of the Russian government” and should be subject to a “war risk” policy.
He added that EU or US sanctions would not prevent insurance companies from indemning claimants for loss of aircraft leased to Russian airlines.
Herbert Smith Freehills Kramer, a law firm representing Aercap, said the company has secured a $1.035 billion payment “in addition to the substantial recovery achieved in the previous settlement.”
