LONDON, March 13 (Reuters) – Aircap (aer.n)The world’s biggest aircraft lessor said on Monday it was unthinkable it would not recover some damages from insurers for planes stranded in Russia, as the lessors fought their way to London’s High Court for redress.
More than 400 aircraft worth about $10 billion are stuck in Russia after Western countries imposed sanctions on the country over the year-old war in Ukraine – and Russian aircraft lessors have not returned the jets.
Insurers are holding off on payment, alleging that the planes have not yet suffered physical damage, that the jets and engines are no longer subject to the lease agreement and that Western sanctions prevent them from providing cover.
Dublin-based Erkap said it was out of pocket to a “vast” degree and, along with at least four partners, has filed a lawsuit that hinges on whether the alleged loss of the plane covered war-risk insurance policies. Enabled, paid up limits, or uncapped all risk policies.
latest updates
see two more stories
AerCap, the biggest claimant, is suing insurers like AIG (aig.n) And Lloyds Insurance Company paid $3.5 billion for the loss of 116 aircraft and 23 engines under its all-risks insurance policy. Alternatively, it is claiming $1.2 billion under its war-risk policy, court filings show.
“… in the real world, it’s inconceivable that we don’t recover under one,” Mark Howard, a lawyer for Aircap, told the first day of the preliminary High Court hearing.
AirCap, Dubai Aerospace Enterprise (DAE), Merck Aviation, KDAC Aviation Finance and Falcon allege they terminated Russian leasing contracts in line with the sanctions and made futile demands for the return of aircraft and engines, court documents show .
The DAE and Falcon are suing 11 insurers, including Lloyd’s of London [RIC:RIC:SOLYD.UL]AIG, Chubb (cb.bn) and swiss ray (SRENHS) More than 21 aircraft and equipment are valued at $900 million under all-risk policies, or for less than $800 million under war-risk policy limits.
Merx is claiming more than $255 million over alleged damages to the six planes, and their engines and records, while KDAC is suing for $21.5 million over damages to one jet, court filings show.
Judge Christopher Butcher said Monday that the lessees’ five cases should be heard together — though those involving Merck and KDAC would be reviewed — in what AirCap’s lawyers described as a “mega trial,” with October 2024. Expected to start in
Gavin Kelly, an attorney for AIG, said a senior DAE official was told by a Russian lessee that it had been instructed by the Kremlin not to return any aircraft and not to cooperate with “unfriendly lessees”.
He called for a “detailed expert inquiry” to establish how power is exercised in Russia.
Moscow has denounced the sanctions and has allowed its airlines to keep the aircraft on their national registry, sparking controversy over whether planes can be registered in two places at once.
Reporting by Kirsten Ridley and Sam Tobin, Additional reporting by Tim Heffer in Paris. Editing by Sharon Singleton
Our Standards: Thomson Reuters Trust Doctrine.