Jurisdiction(s):
United Kingdom

AerCap contests sanctions defence in English Commercial Court test case on contingent liability insurance for Russia-stranded aircraft; policy wording trumps alleged market understanding

Published on: 30 January 2025

Published by a Law360 reporter

Legal News

Article summary

In its closing submissions, the world’s biggest aircraft lessor urged the court to firmly dismiss Fidelis’s contention that it has no obligation to indemnify AerCap for losses tied to aircraft left in Russia because of sanctions imposed by the US, UK and EU, following coordinated measures. Mark Howard KC of Brick Court Chambers, for AerCap, said that permitting Fidelis to sidestep payment under its contingent liability policy with the lessor would do nothing to advance the objectives of sanctions on Russia in practice. AerCap is turning to contingency insurance to recover financial losses linked to the aircraft stuck in Russia. The lessor contends that Fidelis, together with several other participating insurers, must respond for 116 of its aircraft and 15 stand‑alone engines that were “lost” after becoming stranded in Russia in 2022. “Fidelis are trying to argue that sanctions on Russia excuse them,” Howard submitted. “But Western sanctions have a purpose — they are a coordinated, large‑scale response to the invasion of Ukraine.” Counsel for a consortium of all‑risks insurers told the court, in opening submissions, that Russian President Vladimir Putin took the planes as “a political act” in direct reaction to Western sanctions...

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