Jurisdiction(s):
United Kingdom

English Commercial Court refuses stay of aircraft insurance disputes despite Russian exclusive jurisdiction clauses; Zephyrus Aviation v Fidelis Underwriting clarifies ‘strong reasons’ test and finds fair trial in Russia unlikely

Published on: 08 April 2024

Published by a LexisNexis Dispute Resolution expert

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Article summary

Zephyrus Capital Aviation Partners 1D Ltd and others v Fidelis Underwriting Ltd and others [2024] EWHC 734 (Comm)

What was the background?

The claimants are proprietors of aircraft leased to various Russian carriers. Those airlines insured the fleets with Russian insurers, who in turn placed reinsurance in the London and wider international markets under policies affording both ‘all risks’ and ‘war risks’ cover. After Russia’s invasion of Ukraine in February 2022, the claimants brought the leases to an end and sought the return of the aircraft. The Russian airlines did not hand them back and, two years on, the aircraft still remain in Russia. The claimants issued multiple proceedings in the English Commercial Court against insurers and reinsurers, pursuing approximately US$10bn for the loss of the aircraft. At the outset, all reinsurers contested the English Court’s jurisdiction, relying on the Russian ECJs. By the hearing, most all risks reinsurers had accepted jurisdiction, but—with a few exceptions—the war risks reinsurers persisted with their objections. In a judgment delivered on 28 March 2024, Mr Justice Henshaw dismissed the reinsurers’ jurisdictional objections and declined to stay the proceedings, so the claims will, absent a successful appeal, go ahead in England...

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