The long-running legal battle over aircraft stranded in Russia has taken another decisive turn after the UK High Court has denied Western insurers the chance to appeal a judgment obliging them to pay out more than US$1 billion under war-risk policies.
The refusal, delivered orally by Mr Justice Christopher Butcher on 16 September, prevents insurers from reopening arguments already tested in what has become one of the most consequential aviation insurance disputes in decades. A spokesperson for the UK Courts and Tribunals Judiciary confirmed to ch-aviation that permission to appeal was denied on all grounds, though the question of costs remains outstanding.
The case, AerCap Ireland Limited v AIG Europe SA and another (case number CL-2022-000294), concerns 147 aircraft, 16 engines and other aviation assets once worth up to $4.7 billion. The court has already ruled that six lessors – including AerCap, Dubai Aerospace Enterprise, Falcon, Merx and Genesis – can claim under their war policies.
AerCap, the world’s largest aircraft lessor, has alone reported legal fees of around £81 million ($110 million), highlighting the scale of the proceedings. During the trial some parties reached settlements, but exposure for insurers remains vast.
The insurers on the losing side include AIG, Chubb, Lloyd’s syndicates, Swiss Re, Fidelis, Liberty Mutual and Lancashire.
The dispute stems from Moscow’s March 2022 legislation preventing the export of foreign-owned aircraft, a measure widely seen as nationalisation of assets following Western sanctions. The ruling found that this constituted a loss under war-risk wordings. Insurers had argued that the aircraft were still operational in Russia and therefore not “lost”, but this was dismissed.
As Reuters reported, the litigation is among the largest commercial cases ever heard in London and has become a reference point for similar suits in the US and Ireland. The court’s finding that Russian legislation was the proximate cause of loss has helped resolve the timing issue for coverage under aviation policies, which is critical for insurers and reinsurers alike.
The consequences stretch well beyond the immediate $1 billion at stake. According to WTW, the ruling “aligned with industry expectations that war policies would respond” but also highlighted the limitations imposed by aggregate caps. Reinsurers are now scrutinising their exposure under quota share and excess of loss treaties, with aggregation clauses and definitions of loss events likely to face renewed challenges.
Insurance Business has already reported that the judgment could influence claims on as many as 400 aircraft, with a potential insured value of $10 billion. Lessors have already recovered or sold some aircraft back to Russian carriers at steep discounts, but these efforts do little to reduce the broader market exposure.
Julian Acratopulo, counsel to Dubai Aerospace Enterprise, told reporters that the outcome was “a reassuring outcome” given the extraordinary circumstances. “The restraint of over 400 aircraft was precisely the type of catastrophic event these policies were meant to cover,” he said.
Even before the judgment, insurers had begun pulling back capacity and redrafting terms. Sublimits for confiscation and seizure have become common, while some policies now feature new aggregate caps for “theft” to forestall disputes about interpretation. For aviation insurers and their reinsurers, the London decision is likely to accelerate this retrenchment.
With another UK case scheduled for 2026 to consider access to Russian airlines’ own insurance policies, and parallel actions under way in other jurisdictions, the industry faces years of uncertainty. For now, the High Court’s rejection of an appeal cements London’s role in setting the legal and commercial tone.
What remains clear is that the combination of sanctions, state decrees and high-value leasing has created a systemic event that will shape aviation insurance markets for a generation. The financial pain for insurers is significant; the precedent for future war-risk disputes may be even more enduring.
Oct 2024 – DAE settles with AXA (part of its fleet). Settlement covered 19 aircraft; DAE continues to pursue recovery for remaining units.
During trial (H1 2025) – KDAC Aircraft Leasing settled and its action was dismissed.
During trial (H1 2025) – Merx Aviation Finance settled with Chubb.
By Sept 16, 2025 – Additional settlements reported by Reuters, including Swiss Re, HDI, DAE, Merx and KDAC, though counterparties and terms were not disclosed.
AerCap – Judgment confirmed entitlement to about US$1.0bn under War & Allied Perils. Permission to appeal for insurers was refused on Sept 16, 2025. AerCap has incurred legal costs of around £81m.
Falcon and Genesis – Claims recognised under war-risk cover in the June 2025 judgment. No settlements publicly disclosed as of September 19, 2025.
DAE (balance of fleet) – After AXA settlement for 19 aircraft, DAE is still pursuing remaining claims against other insurers for aircraft not covered by that deal.
