Insurers must provide documents to lessors suing over cover for planes held in Russia, court rules

The Court of Appeal has upheld a finding that several Dublin-registered international aircraft lessors are entitled to certain documentation from insurers who have allegedly refused to provide indemnity for the loss of planes detained in Russia.

The aircraft in question, valued at more than a billion euro, were not returned when the companies sought their returns following Russia’s invasion of Ukraine in early 2022.

The actions have been brought in six sets of proceedings by groups of companies, including SMBC Aviation Capital Ltd, Global Aviation Ltd and Wilmington Trust SP Services (Dublin) Ltd, BOC Aviation Ltd, Silver Aviation Ltd, CDB Lease Finance DAC and GY Aviation.

Their actions are against several international insurers who declined to cover losses under either “all risks” or “war risks” policies.

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The insurers include Lloyds, Swiss Re International SE, Chubb European Group SE, Global Aerospace Underwriting Managers (Europe) SAS and AIG Europe SA, Tokio Marine Europe, Taiping General Insurance Zhejiang Branch Co Ltd.

The insurers deny the war risk cover was engaged following the invasion.

In a ruling earlier this year on a preliminary issue raised in the actions, Mr Justice Denis McDonald in the Commercial Court found that the plaintiff groups were entitled to the discovery of certain documentation from the defendant insurers.

The materials include documents relating to notices of cancellation in respect of aviation assets in Russia, Ukraine, Crimea and Belarus from February 1st, 2022, to March 31st, 2022.

The plaintiffs say they need the material to progress their claims.

The defendants opposed the application and argued the material was not necessary.

The insurers appealed that decision to the Court of Appeal on grounds including that the application for discovery of the material in question amounted to an “impermissible fishing” of allegations that have not been pleaded by the plaintiffs.

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In its judgment, the appeal court, comprising Ms Justice Caroline Costello, Mr Justice Senan Allen and Mr Justice Brian O’Moore, unanimously dismissed the appeal.

Giving the court’s decision, Ms Justice Costello said the aircraft were subject to aircraft lease agreements between one or other of the various firms and Russian airlines.

Following the imposition of EU sanctions on Russia, the firms sought the return of the aircraft, but it has not been possible to recover them, she said.

When they called on the insurers to confirm cover for the aircraft the defendants declined to do so, they claim.

Ms Justice Costello said it is the plaintiffs’ case that the vast majority of the aircraft leased to Russian airlines have been unlawfully retained there.

She dismissed the appeal on grounds that the material sought did not amount to impermissible fishing by the plaintiffs. The documents sought by the plaintiffs are relevant to the issues raised in the proceedings, the court held.

The full hearing of the claims will return to the Commercial Court.