Jurisdiction(s):
United Kingdom

Russia-stranded leased aircraft: AerCap's Commercial Court test case on 'permanent deprivation' and insurer liability under all-risks, war-risks and contingent liability policies (England and Wales)

Published on: 29 January 2025

Published by a Law360 reporter

Legal News

Article summary

AerCap's counsel, Mark Howard KC of Brick Court Chambers

Mark Howard KC contended that the policies in issue encompass 116 aircraft and 15 stand-alone engines deemed ‘lost’ after being left stranded in Russia. He told the court: ‘The plain but unspoken reality, known to everyone here, is that this dispute is about which set of insurers will ultimately indemnify AerCap, and that depends solely on peril and loss.’ Opening on 2 October 2024, the trial casts a sharp light on contingent liability insurance. This type of cover responds where loss or damage to aircraft sits within the principal policy, yet the insurer does not step in. Six claims have been combined, likely serving as a test case for later disagreements. The lessors maintain there is ‘no realistic prospect’ of the aircraft and engines ever being returned. Major carriers, including Chubb and Lloyd’s of London, could face multibillion-pound liabilities if Judge Andrew Butcher rules they must pay for the missing airframes. Howard further argued that, despite AerCap ‘having taken all reasonable steps’ to secure their return, recovery remains ‘either uncertain or unlikely or unrealistic’...

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