AerCap - The landmark billion dollar litigation battle

In June 2025, London’s High Court delivered a significant ruling in one of the largest insurance disputes ever in English courts, granting AerCap Ireland Ltd over $1 billion in insurance recoveries for aircraft stranded in Russia following the 2022 invasion of Ukraine. The case focused on complex questions of insurance law, international sanctions, as well as the legal definition of asset loss. 

Following Russia’s invasion of Ukraine in February 2022, AerCap lost access to 116 aircraft leased to Russian airlines. When Western sanctions were imposed, AerCap terminated its leases and demanded the return of its assets.

Despite this, Russian airlines refused to comply, instead continuing to operate the aircraft within Russian territory. In addition, the situation was further complicated by incidents such as an Aeroflot plane nearly being grounded in Sri Lanka, only to escape after Russian government intervention with local authorities. On 10 March 2022, the Russian government implemented Resolution 311, banning the export of commercial aircraft from Russia, thereby seizing the assets. 

As a result of such substantial losses, Aercap pursued claims under its contingent war risk and all risk insurance policies. The insurers, which included major firms such as AIG, Allianz, and AXA, contested liability on multiple grounds. An example is their argument that because the aircraft still physically existed and remained in Russian possession, they could not be considered “lost” under the policy terms. Insurers also contended that sanctions prevented them from making payments and questioned whether AerCap had exhausted claims under the Russian airlines’ own insurance policies before accessing sufficient coverage. 

Herbert Smith Freehills Kramer, representing AerCap, successfully argued that the aircraft were indeed lost when Resolution 311 came into force. The judge agreed, ruling that the Russian government’s ban on aircraft exports constituted a permanent loss of the assets.

The court clarified that property can be considered “lost” when, on the balance of probabilities, the owner has been permanently deprived of possession of them. Furthermore, the judge determined that the loss fell under war risk coverage rather than all risk coverage, as the primary cause was the Russian government’s legislative action.

Ultimately, the court rejected the insurers’ sanctions defence and confirmed the lessors were not required to pursue operator policy claims before accessing their own contingent coverage. 

This major judgement secured over $1 billion for AerCap and brings the company’s total pre-tax recoveries related to the Ukraine conflict to roughly $2.5 billion. The ruling provides clarity for the aviation industry and reinforces the principle that insurance must respond when policyholders face losses from government actions in conflict situations.