UK court decides $10 billion jet dispute to be heard in London, not Moscow (updated)

Chubb

28/03/2024 13:04

(Adds background in paragraphs 4-5, 9-13; reaction in
paragraphs 7-8)
       LONDON, March 28 (Reuters) - A $10 billion battle
between reinsurers and aircraft leasing companies seeking
payouts for more than 200 jets stuck in Russia should be heard
in London rather than Moscow, London's High Court ruled on
Thursday.
    Aircraft lessors, including Ireland's AerCap  AER.N  and
U.S.-listed Carlyle Aviation Partners  CG.O , are pursuing
insurers for losses after Russia's invasion of Ukraine grounded
their jets in Russia.
    The lessors argued the legal case should be heard in London
rather than Moscow, to avoid the risk of unfair hearings or
inconsistent judgments.
    However, some major reinsurers including AIG  AIG.N , AXA
 AXAF.PA  and some Lloyd's of London  SOLYD.UL  syndicates,
wanted the claims heard in Russia, arguing that the policies
stipulate a dispute should be heard in Moscow.    
    Not all reinsurers agreed – around 35 had accepted the
jurisdiction of the English courts in the dispute, including
heavyweights Swiss Re  SRENH.S  and Chubb  CB.BN .
    Judge Andrew Henshaw ruled the cases should continue in
London, stating in a written ruling on Thursday that "the
claimants are very unlikely to obtain a fair trial in Russia".
    A spokesperson for Carlyle Aviation Partners, one of the
claimants, welcomed the ruling.
    "Without further delay, we intend to vigorously pursue our
claims against all insurers who have failed to provide coverage
for losses in the courts of London, as is the right and proper
jurisdiction," Carlyle said in a statement.
    Hundreds of aircraft have been stuck in Russia since Western
nations imposed sanctions on the country, prompting a wave of
lawsuits against insurers.
    Thursday's judgment turned on "operator" policies, under
which Russian airlines leased the jets through international
lessors, insured them through Russian insurers, and reinsured
those policies through the London market. 
    Lessors are named as insured and can therefore also claim
directly in some instances.
    Some lessors led by AerCap, the world's largest, are also
suing insurers under "contingent and possessed" policies in
London, Dublin and some U.S. states. A London "mega trial" is
scheduled for October.
    Deals with Russia, meanwhile, have started shaving the size
of claims. Since launching their lawsuits, lessors have secured
settlements totalling more than $2.5 billion for more than 100
jets, with ownership transferred to Russian airlines.
    The various pieces of litigation in London originally
related to 306 aircraft together with 40 engines. After some
settlements, they now relate to 208 aircraft and 31 engines,
Henshaw said in his ruling.

 (Reporting by Sam Tobin and Carolyn Cohn; additional reporting
by Iain Withers; editing by William James and Jason Neely)
 ((Sam.Tobin@thomsonreuters.com;))