The recent judgment by the English Commercial Court in the Russian aircraft lessor policy claims marks a significant milestone in the ongoing global litigation stemming from the loss of approximately 500 aircraft stranded in Russia following the invasion of Ukraine. This landmark ruling, the first of its kind globally, found that aviation lessors’ war risk insurers must pay out claims. AerCap, represented by HSF Kramer, stands to receive over $1bn from this judgment, in addition to prior settlements. But what implications does this hold for the broader market?

The case, described by the presiding judge as “an unusually demanding piece of litigation”, was a so-called ‘mega trial’ involving the claims of six lessors with total insured values exceeding $4.6bn. The lessors had all leased aircraft to Russian airlines who following the invasion of Ukraine – faced with Western sanctions prohibiting their continued leasing – failed to return the aircraft to lessors and continued to operate them in Russia without paying rent.

The trial, which spanned 12 weeks, saw 13 legal teams and the cross-examination of 23 witnesses and 14 experts. Much of the evidence presented was to counter a range of defences that insurers ultimately abandoned shortly before or during the trial. Insurers had contended that the aircraft were not lost, that EU and US sanctions precluded payment, and that the insurance contracts’ wording was subject to an alleged market practice.

The court’s 230-page judgment provides crucial clarifications for first-party property insurances. Of interest beyond aviation insurance, the judgment addresses the doctrines of ‘loss by deprivation’ (where an insured can claim for an undamaged asset if it has been deprived of possession) and the ‘grip of the peril’ (where an insured can claim for losses which occurred outside the period of the insurance if their originating cause occurred within it). The court clarified that if the deprivation of possession begins during the insurance period but only becomes permanent after the policy expires, the loss is deemed to have occurred within the insurance period and is thus covered.

The judgment also reinforces aviation lessors’ expectations regarding this class of insurance. Insurers had argued that the loss did not fall within the contingent insurance coverage due to an alleged market practice, the existence of other types of political risk policies, and the ostensibly low premiums charged for this cover. The court dismissed these defences, finding no evidence of such market practice and determining that the clear wording of the insurance contracts covered these losses.

This ruling will likely influence ongoing proceedings in Ireland and various US states concerning aircraft lost in Russia. While many Irish and some US claims have been settled, the English judgment may prompt remaining war risk insurers to reconsider their positions as they face multiple trials in the coming months and years.

The court’s ability to navigate a vast volume of material and deliver the first comprehensive judgment on these issues underscores the global standing of the English courts as a forum for complex commercial disputes. This should give contracting parties pause when selecting governing law and dispute resolution clauses, highlighting the value of public court proceedings in England over private arbitration or litigation in other jurisdictions.

The proceedings also raise questions about managing multiple cases on the same subject matter. The English court ordered the consolidation of the six lessor claims, with shared disclosure and evidence heard in a single trial. Unlike the Covid-19 business interruption insurance claims, there was no ‘lead case’, although AerCap, with the largest claim, acted as the de facto lead claimant. This approach, suitable here due to the common cause of loss (the actions of the Russian government, as the court found), may not be appropriate in other contexts.

This judgment is not the final word on the Russian aircraft litigation in the English courts. Parties have until 27 June 2025 to seek permission to appeal. Additionally, around 90 claims under Russian law-governed (re)insurance policies are set to be heard in 2026. As insurers pay out these claims, reinsurance disputes are likely to follow, ensuring that the English courts remain occupied with these issues for some time.

Fiona Treanor is a partner and William Gibson is a senior associate at HSF Kramer, both of whom represented AerCap, the lead claimant in the Russian aircraft lessor policy claims.