(Reuters) — Some of the world’s largest aircraft lessors faced off against their insurers in a Dublin courtroom Tuesday at the start of a months-long battle over around €2.5 billion ($2.7 billion) of insurance claims related to jets stranded in Russia.
Lessors are suing dozens of insurers around the world over losses of at least $8 billion after more than 400 planes were prevented from leaving Russia when Western sanctions over Moscow’s war in Ukraine forced the termination of their leases.
The world’s second and third largest lessors, SMBC and Avolon, as well as BOC Aviation, CDB Aviation, Nordic Aviation Capital and Carlyle Aviation Partners, are pursuing their claims in Ireland, where more than 60% of the world’s leased aircraft are owned or managed.
Lloyd’s of London, Chubb Ltd. and Fidelis are among the insurers contesting the claims.
Insurers are balking at payouts, with some alleging that there has not been a physical loss of the planes yet or that the planes are still in the course of being repossessed. Others have argued that lessors voluntarily ended leasing agreements or that Western sanctions prevent insurers from providing cover.
The variety of arguments made by lawyers — including whether the issue only relates to narrower war risk policies or also to broader all risk insurance — are “bewildering and confusing,” Senior Counsel Paul Gallagher told the court in an opening statement on behalf of four lessors.
“Insurers cannot agree on the meaning of their own policies,” Mr. Gallagher said.
The case, which is expected to last around seven months, is the largest ever heard in Ireland by number of lawyers and is being held in a makeshift court as no courtroom in the country is large enough to accommodate the 180 legal professionals expected to attend each day, a courts service spokesperson said.
The world’s biggest aircraft lessor, Irish-based AerCap, is pursuing its insurance claims through London’s High Court, with what its lawyers have described as a “mega trial” due to start in October. Other lessors have taken cases to the United States.
Since launching their lawsuits, lessors have secured settlements with Russia totaling more than $2.5 billion for more than 100 jets, with ownership transferred to Russian airlines.
