The High Court in London has ruled that insurers must carry out claims made by aircraft lessors for commercial jets impounded by Russia in the wake of its 2022 invasion of Ukraine, delivering a pivotal judgment in one of the most consequential aviation insurance disputes of recent decades.
In a ruling that could reverberate across multiple jurisdictions, Mr Justice Butcher found that claims for the loss of 147 aircraft and 16 engines – at approximately $4.5 billion - can be pursued under war-risk policies. While the judge drew a clear distinction between war risk and all-risk cover, the ruling offers a substantial win for lessors seeking recompense for assets effectively nationalised by Moscow under emergency legislation.
The case, brought by aviation leasing giants including AerCap Holdings NV and Dubai Aerospace Enterprise (DAE) against a suite of global insurers - among them AIG, Lloyd’s syndicates, Chubb, and Swiss Re - has become a bellwether for similar litigation now pending in Ireland and the United States. It also provides critical clarity on policy response to state expropriation during wartime.
The insurers had contended that the aircraft, while stuck in Russia, continued to be operated by Russian airlines and therefore could not be deemed “lost” under policy language. The judge rejected this view, citing the March 2022 export ban introduced by the Kremlin, which made recovery of the aircraft legally and practically impossible.
“The judgment concludes that the aircraft have been lost,” the court stated, affirming the lessors’ interpretation that the Russian legislation constituted a loss event under war-risk terms.
AerCap, the world’s largest aircraft lessor, had originally claimed $3.4 billion, although that figure has since reduced to around $2 billion after several settlements and asset recovery efforts.
According to the judgment, AerCap’s relevant war-risk coverage was capped at $1.2 billion.
Until early 2024, AerCap had 116 aircraft and 15 engines grounded in Russia, spread across 15 domestic carriers including Aeroflot. DAE, meanwhile, continues to pursue recovery for 19 aircraft not resolved in its earlier confidential settlement with AXA XL, as disclosed in court proceedings.
While some lessors had reached early settlements - DAE among them - the High Court ruling significantly bolsters the position of those continuing to litigate. The case centres not only on the physical control of aircraft but also on the legal realities imposed by international sanctions and retaliatory decrees.
Julian Acratopulo, legal counsel to several lessors including DAE, described the ruling as “a reassuring outcome” in light of the unprecedented geopolitical risk that emerged after President Putin’s invasion. “The restraint of over 400 aircraft was precisely the type of catastrophic event these policies were meant to cover,” he told reporters.
The court’s decision may shape the outcome of claims involving an estimated 400 commercial aircraft - valued at roughly $10 billion - that remain trapped in Russia. Although certain assets have been sold back to Russian operators at significantly discounted values, this has done little to resolve the broader dispute over insurer obligations.
The judgment is likely to intensify scrutiny of aviation war-risk policies and has already prompted market participants to reassess the scope and structure of such coverage. Insurers including AIG and Lloyd’s declined to comment to Bloomberg in the aftermath of the ruling, while AerCap and DAE have yet to release formal statements.
With legal action pending in other jurisdictions, the London decision may provide persuasive guidance - though not binding precedent - in ongoing litigation, especially in Ireland, where a number of lessors are headquartered, and in the US, where insurers face parallel challenges.
