Aircraft lessors prepare for ‘mega trial’ in row with insurers over planes stuck in Russia

A multibillion-dollar legal battle over who will foot the bill for hundreds of aircraft stranded in Russia will kick off in London this week as their owners try to secure payouts from insurance companies in one of the most complex and costly cases to be heard by the high court. Groups including AIG, Chubb and Lloyd’s of London are facing what one litigant has described as a “mega trial” over claims that they have refused to cover the owners of mainly Boeing and Airbus jets that were stuck in the country after it invaded Ukraine. Owners of the planes – including the world’s biggest commercial aircraft leasing company, AerCap – are seeking a combined total of about $3b from insurers in proceedings that are due to get under way on Wednesday and have been scheduled to last until Christmas. Parallel proceedings covering reinsurance are also advancing, with a UK high court hearing scheduled for November. The aviation insurance sector is facing potentially the biggest loss in its history, with losses topping those after 9/11. More than 500 aircraft worth an estimated $10b were stranded in Russia following the invasion of Ukraine in February 2022. Western lessors managed to recover some of the aircraft, but most remain in Russia and are still being flown by Russian airlines. In the trial, due to take place at a “super court” in central London, several of England’s most prominent commercial barristers are expected to argue on insurers’ behalf that it is too early to declare a total loss, not least because the aircraft have not been destroyed and may yet be recovered. They are expected to point out that the conflict between Russia and Ukraine could still be resolved, depending partly on the outcome of the US election, and also to highlight that the way the insurance policies were worded means the lessors are not covered.<br/>