In Dublin, a high-stakes court battle has commenced between some of the world's largest aircraft lessors and their insurers. The dispute centres around over €2.5 billion in insurance claims related to more than 400 planes stranded in Russia due to Western sanctions following the war in Ukraine.
Lessors, including SMBC, Avolon, BOC Aviation, CDB Aviation, Nordic Aviation Capital, and Carlyle Aviation Partners, are suing dozens of insurers worldwide. They claim losses exceeding $8 billion as a result of the stranded jets, which were leased to Russian airlines and could not be returned due to sanctions.
The insurers, including Lloyd's of London, Chubb, and Fidelis, are resisting the payouts, arguing that there hasn't been a physical loss of the planes or that they are still in the process of being repossessed. Some insurers have also claimed that lessors voluntarily terminated leasing agreements or that Western sanctions prevent them from providing coverage.
The case has drawn a large number of lawyers, making it the largest ever heard in Ireland. The trial is expected to last approximately seven months and is being held in a makeshift courtroom due to the high number of legal professionals involved.
The case is complex, with various legal arguments being presented, including disagreements over the meaning of insurance policies and whether the issue falls under narrower "war risk" policies or broader "all risk" insurance.
While this case unfolds in Dublin, the world's largest aircraft lessor, AerCap, is pursuing its insurance claims in London's High Court, with a "mega trial" scheduled for October. Other lessors have initiated legal action in the United States.
Since launching their lawsuits, lessors have reached settlements with Russia totaling over $2.5 billion for more than 100 jets, with ownership transferred to Russian airlines. However, the outcome of the ongoing legal battles in Dublin and other jurisdictions will have significant implications for the aircraft leasing and insurance industries.
