Jurisdiction(s):
United Kingdom

Commercial Court test case on Russian‑stranded jets: scope of lessors’ contingent liability versus war‑risks cover, and whether primary all‑risks must respond (England and Wales)

Published on: 10 February 2025

Published by a Law360 reporter

Legal News

Article summary

'Contingency is not primary cover'

Dominic Kendrick KC of 7 King’s Bench Walk, acting for Fidelis within a group of war-risks insurers, told the High Court that contingency insurance serves only as a back‑up, stepping in where the main policy should have paid out but did not. The proceedings aim to decide which insurers are responsible for losses suffered by lessors when their aircraft were left in Russia after the February 2022 invasion of Ukraine. ‘Contingency is not primary cover,’ Kendrick said. ‘It does not widen the risks beyond the loss insured in the first place.’

Beginning on 2 October 2024, the trial places contingent liability insurance policies under close scrutiny. This form of cover applies when loss or damage to aircraft falls under the principal policy, yet the insurer fails to respond. Six claims have been combined in what is expected to operate as a test case for future disputes. Aircraft lessors contend there is ‘no realistic prospect’ that planes and engines will ever be returned. Major insurers, including Chubb and Lloyd’s of London, face multibillion‑pound liabilities if Judge Andrew Butcher concludes they must meet the cost of the missing aircraft...

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