Insurers to Club Lawsuits By Lessors for Jets Lost in Russia

Insurers led by AIG succeeded in their attempt to merge several lawsuits brought by aircraft lessors over outstanding claims for jets that have been left out of reach in Russia.

(Bloomberg) — Insurers led by AIG succeeded in their attempt to merge several lawsuits brought by aircraft lessors over outstanding claims for jets that have been left out of reach in Russia.

Judge Christopher John Butcher at London’s High Court said he was in favor of a combined trial, which will merge similar lawsuits filed by AerCap Holdings NV, Dubai Aerospace Enterprise Ltd. and KDAC Aircraft Trading. The cases have identical issues and a concurrent trial will avoid duplication and save time, he said. The judge said the trial in the case will likely begin in October 2024.

AerCap, the world’s biggest jet lessor, is suing AIG, along with Lloyd’s Insurance Company and Fidelis Insurance for $3.5 billion after they denied the leasing company’s claims for the 116 planes it has stuck in Russia with various airlines. AerCap opposed the clubbing of the cases saying it would delay the case and might make settlements more difficult.

Jet leasing companies are suing their insurers for damages after having been forced to write off millions of dollars against planes left out of reach in Russia. Sanctions following the invasion of Ukraine forced lessors to terminate their leases, but they were unable to recover their aircraft following a ban by the Russian government that prevented airlines from returning planes.

AIG proposed merging the AerCap claims along with those by DAE, KDAC, and Merx Aviation Servicing Ltd., which have all filed suits after their insurers refused to pay out.

Insurance companies have said that the aircraft haven’t been lost as they continue to fly, and sanctions prevent them to providing cover or paying any claim. They also say that the specific exclusions in the policies apply, negating cover.

(Updates with comment from judge in first, second paragraph.)

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