Insurers Reject Claims for Confiscated Aircraft Registered in Russia
The seizure of nearly 400 aircraft by Russia has led to an international legal dispute involving billions of dollars. Leasing companies and insurers face off in Dublin and London courts, with the outcome likely to reshape the global aviation industry
The Russian government’s confiscation of nearly 400 aircraft, following international sanctions imposed due to the war in Ukraine, has triggered an unprecedented legal and financial conflict in the aviation sector. These aircraft, owned by major leasing companies, were seized and registered in Russia, resulting in estimated collective losses of $10 billion for the affected firms.
The conflict has now shifted to courts in Dublin and London, where leasing giants such as SMBC, Avolon, BOC Aviation, CDB Aviation, Nordic Aviation Capital, and Hermes Aircraft are pursuing the recovery of approximately €2.5 billion. Ireland plays a pivotal role in the industry, as over 60% of the world’s leased aircraft are registered there.
According to our affiliated outlet Aeroin, the legal proceedings involve more than 180 lawyers and focus on whether the aircraft should be classified as irreparable losses, as claimed by the leasing companies, or if they remain recoverable assets, as argued by insurers.
The position of the insurers
Prominent insurers such as Lloyd’s, AIG, and Chubb have rejected the leasing companies’ claims, asserting there is no evidence of destruction or substantial damage to the aircraft. According to these insurers, the registration of the aircraft in Russia does not constitute a definitive loss, which, if upheld, would exempt them from paying the requested indemnities.
The outcome of this case could set a precedent for the global aircraft leasing and insurance industry, as the vulnerability of the leasing model to extreme geopolitical events has been starkly highlighted. This could lead to significant changes in insurance practices and contract drafting across the sector.
Meanwhile, the financial repercussions of the losses remain a major challenge for the leasing companies, which are confronting one of the most significant legal battles in their history.
AEROIN es el medio líder de aviación en Brasil, y uno de los más leídos del mundo, con el que Aviacionline posee un acuerdo de intercambio editorial. https://www.aeroin.net
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