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Landing on the right jurisdiction: enforcing exclusive jurisdiction clauses

Posted on 18 June 2024

In AerCap Ireland Capital Designated Activity Company & Ors v PJSC Insurance Company Universalna & Ors (Re Ukrainian Aircraft Operator Policy Claims (Jurisdiction Applications)) [2024] EWHC 1365 (Comm), the English High Court has once again considered whether insurance claims arising out of the grounding of aircraft following the Russian invasion of Ukraine should be heard in England and Wales, even where they are subject to a foreign jurisdiction clause. However, unlike the earlier decision in Zephyrus Capital Aviation Partners 1D Ltd & Ors v Fidelis Underwriting Ltd & Ors (Re Russian Aircraft Operator Policy Claims (Jurisdiction Applications)) [2024] EWHC 734 (Comm), which we reported on at the time, in AerCap, the High Court concluded that the applicable exclusive jurisdiction clause must be enforced.


Like Zephyrus, AerCap arises out of the grounding of aircraft following the Russian invasion of Ukraine. The aircraft had been leased to Ukrainian airlines under leases governed by English or Irish law which required the lessees to maintain insurance and/or reinsurance against all risks and war risks perils. Various owners, lessors and financing banks commenced proceedings in England against the insurers, contending that they were entitled to claim under or through the policies for the loss of the aircraft after they were stranded in Ukraine.

However, the defendant reinsurers argued that, as the reinsurance policies contained Ukrainian exclusive jurisdiction clauses, the claims had to be brought there. Although the defendants accepted that the claimants were not parties to the policies, they contended that the claimants had consented to and were bound by them.

The claimants (i) denied that the jurisdiction clauses were binding on them or applicable to the claims advanced; (ii) contended that the clauses were unenforceable as they failed to specify a specific Ukrainian court; and (iii) argued that in any event there were strong reasons not to enforce the jurisdiction clauses by staying the English proceedings.

The decision

Having considered the effect of Ukrainian law as the applicable governing law, Mr Justice Henshaw concluded that the defendants had the better of the argument that the exclusive jurisdiction clauses were binding on the claimants.  He also accepted that they could extend to the claims advanced and would be treated as enforceable, even though they did not refer to a particular Ukrainian court.

As to whether there were strong reasons justifying the claims proceeding in England despite the exclusive jurisdiction clauses, the judge noted the usual rule that, where an exclusive jurisdiction clause applies, the court will grant a stay unless the counterparty can point to strong reasons for the court not to do so. In this case, the claimants relied on the ongoing conflict in Ukraine, the inconvenience of the claims being tried there, a risk of multiplicity of proceedings and the suggestion that the defendants had no genuine desire to have the cases tried in Ukraine. One set of claimants stated that the defendant reinsurers had consistently and continuously refused to indemnify them for two years and had refused to engage with them. They suggested that reinsurers' reliance on the exclusive jurisdiction clause was an attempt to take advantage of the difficulties and delays in the Ukrainian court.

Mr Justice Henshaw noted that the authorities show that the effects of a war can constitute a strong reason to decline a stay. However, he also observed that the evidence indicated that, outside of the conflict zones, the Ukrainian court system was functioning almost to the same level as in the pre-war period, including in the Kyiv City Commercial Court where the claims would most likely be heard. He also noted that there was no reason to believe any non-Ukrainian claimants would spend any appreciable amount of time in Ukraine, or that witnesses from abroad would be required to attend court in Ukraine.

The judge rejected suggestions that there was a risk of a multiplicity of proceedings. He concluded that there was no sufficient basis on which to infer the defendants' reliance on the exclusive jurisdiction clauses was made in bad faith or constituted an abuse. Indeed, there were cogent reasons why the defendants might legitimately wish the cases to proceed in Ukraine, including the importance of Ukrainian law and the location of evidence and witnesses.

There were therefore no strong reasons to decline to give effect to the exclusive jurisdiction clauses, and it was therefore appropriate to grant a stay.


As we previously noted, the decision in Zephyrus, which allowed English proceedings to continue in the face of a jurisdiction clause in favour of a foreign court, was unusual. In normal circumstances the courts will usually stay English proceedings brought in breach of such a clause. As the decision in AerCap demonstrates, even the proximity of a war zone may be insufficient to prevent a stay being ordered.

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