Partner Chris Neilson has commented for Law360 on a High Court trial to recover losses for planes stranded in Russia, when reinsurers will argue that Russian law prevents them from claiming directly under insurance arranged by the airlines.
Western sanctions required aircraft lessors to terminate aircraft leases with Russian airlines after Russia invaded Ukraine in 2022. But Russia blocked the return of the aircraft, leaving leasing companies unable to recover their planes while the airlines continued to use them.
The trial, starting on Monday 5 October, follows a ruling in June 2025 on separate policies bought by the lessors. The central issue in that trial was whether the aircraft had been permanently 'lost' — and, if so, why and when.
Chris said the biggest difference with the upcoming trial is that the policies arranged by the Russian airline operators and their international reinsurance are governed by Russian law. "It also involves a scenario where the operators have not made claims on the insurance because they are still in possession of and continue to use the aircraft," he said.
Chris commented that the claims under the operator policies arise from a similar pattern of facts to the claims under the lessor policies as they are linked to the loss of aircraft leased by lessors to Russian operators. But, unlike the earlier litigation over policies bought by the aircraft lessors, the upcoming trial will focus on policies arranged by the Russian airline operators and reinsured in the international market.
He also said that a crucial question is whether Russian law allows the lessors to recover for their separate losses. Reinsurers argue that, unlike under English law, the lessors' rights to claim depend on those of the operators. They also contend that the "cut-through" clauses in the policies — intended to allow claims directly against reinsurers — do not give the lessors an enforceable right to sue them.
The lessors face several hurdles under Russian law before the court can consider questions such as whether the aircraft have been lost for insurance purposes. "Other than being an interesting and high-stakes case it will have limited if any application to English law policies," commented Chris.
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