The high-stakes legal battle over €2.5 billion worth of aircraft stranded in Russia since the 2022 invasion of Ukraine is unfolding in Dublin’s Commercial Court. At the center of the dispute are the world’s largest aircraft lessors, including SMBC, Avolon, and AerCap, who are battling several major insurance companies—such as Lloyd’s of London, AIG, and Chubb—over compensation for lost aircraft.
Western sanctions, which were imposed on Russia after its invasion of Ukraine, forced leasing companies to cancel contracts with Russian carriers, leaving hundreds of planes stranded in the country. The lessors have invoked war risk insurance clauses, seeking compensation for the estimated $10 billion in aircraft that are now largely out of reach. Many of the planes were re-registered by Russia without the owners’ consent and have since been sold to Russian airlines.
The trial, which began in June 2022, is one of the largest commercial disputes in recent history, with over 180 lawyers involved. The case is expected to continue for several months, with legal fees potentially reaching hundreds of millions of euros.
The lessors argue that the insurance companies should cover the cost of the losses, while insurers are scrutinizing the lessors’ actions and emails from March 2022, which show the companies scrambling to retrieve their planes. Some companies, like BOC Aviation, have managed to recover some aircraft, but the bulk of the planes remain stranded in Russia, with no sign of repatriation in the near future.
The case, which has parallels with a similar legal action in London, underscores the complex intersection of international law, geopolitics, and the global aviation leasing industry. It also highlights Ireland’s role as the global hub for aircraft leasing, with more than 60% of the world’s leased planes being owned or managed by Irish entities.
As legal settlements continue to be negotiated, the outcome of these cases could have significant financial and regulatory implications for both the insurance and aviation industries.
Picture by Stefan Flöper on Wikipedia CCA SA 4.0
