The FT highlighted that the case, which is likely to come to a full court hearing next year at the earliest, will be closely followed by other leasing companies expected to lodge similar claims. Vitaliy Seveliev, Russia’s transport minister, has stated that 1,140 planes have been newly registered in the country, as a result of a decree authorising the seizure of foreign-owned aircraft.
A source quoted by The FT as being party to the case indicated that an initial case management conference for the trial would likely take place early in 2023, though it could take a further year before a final judgement is delivered. The group, led by AIG, provides “all-risk” cover for the aircraft in question – insuring against risks excluding war. Meanwhile, the group led by Lloyd’s of London covers war-related risks.
It was reported that AerCap’s court filings show that both the all-risk insurers (referred to as “Section One” insurers) and war-risk insurers (referred to as “Section Three” insurers”) claimed that the aircraft’s seizure did not constitute a loss for insurance purposes. However, AerCap’s filing has said that the all-risk insurers should accept its claim.
“Wrongfully and in breach of the policy, the Section One insurers have not paid the sum or any part of it to the insureds,” the filing read.
The FT revealed that: “The two groups of insurers disagreed in their filings on what should happen if the court held that, contrary to their arguments, the aircraft had in fact been lost. The group led by AIG argued that the decision to retain the aircraft was a political one — which could put it outside the scope of the coverage that they provide.”
“In the circumstances . . . the acts of the lessees . . . were acts done for political purposes,” the AIG-led group defence argued.
Meanwhile, the war-risks insurers insisted that, even if the court decided that the seizure was part of an event covered by their policies, they would be liable only if the aircraft were destroyed.
In addition, the FT revealed that limits on the war-risk insurance mean that if the claim is found to be under that cover, any payout is likely to be limited to $1.2 billion, instead of the $3.48 billion being claimed under the all-risks policy.
The publication highlighted the response of Mark Pring, a partner specialising in insurance issues at the law firm Reed Smith, who said there was likely to be a “wave” of insurance claims over assets stranded in Russia in the coming months.
“The insurance fallout from the ongoing war in Ukraine has only just begun,” he said.
