© Reuters. FILE PHOTO: A general view shows the Supreme Court in London, Britain on March 27, 2023. REUTERS/Toby Melville/File Photo
LONDON (Reuters) – More than 40 aircraft leasing companies, locked in a battle with insurers over who will pay up to $10 billion in costs for 400 planes stuck in Russia, are urging the High Court to allow a reinsurance dispute to be heard in London. Not Moscow.
The lessors received no insurance payments on the stranded planes after the sanctions imposed on Russia, and are suing insurance companies in several jurisdictions, including London.
Next year, the High Court in London is set to hear five cases involving lessors including AerCap and Dubai Aviation Corporation over so-called emergency insurance policies.
But lessors unite separately in jurisdiction for reinsurance disputes, which reinsurance companies say should be heard in Russia.
In cases of reinsurance, Russian airlines leased aircraft through international lessors and insured them through Russian insurance companies. These policies were then reinsured through international companies such as AIG (NYSE:) and Lloyd’s of London. Lessors are also covered by these policies.
Reinsurers say those claims must be heard in Russia on the basis of jurisdiction clauses in reinsurance policies that define Russian courts in any dispute, according to court documents filed for a case management hearing on Friday.
The lessors, including AerCap and Carlyle Aviation Partners, say it will not be possible to achieve “substantial justice” in Russia, according to court documents.
A spokesperson, Carlyle, said in an emailed statement.
A legal source pointed to Russia’s decision to describe its invasion of Ukraine as a “special military operation” rather than a war. Some reinsurance claims relate to war risks.
The source stressed that the sanctions will make it difficult to bring legal experts to Russia for any trial.
A second legal source and an insurance source said Russian lessors and airlines are also continuing behind-the-scenes talks about selling the stranded lessors’ planes to airlines to resolve the dispute faster. The sources declined to be named, citing confidentiality.
Such a deal should be possible under the current EU sanctions regime, this legal source said, adding that 60-70 cents to the dollar might be the level at which such a trade deal could be agreed.