London Market insurers seeking to relocate an aviation case to war-torn Ukraine

Leading insurers from the London Market will be at court tomorrow for a hearing on jurisdiction over an aviation case involving a Ukrainian airline.

Unlike the cases of aircraft lessors that have sued several insurers as part of the ongoing multi-billion Russia litigation, this case is over a non-Russian operator policy. After a case management conference last year, the court decided to hear the non-Russian insurance claims together.

This includes a Ukrainian airline, Windrose Airlines and a leasing company, Serendip LDA, that have instructed City-based law firm Hausfeld to sue several insurers, including American International Group (AIG).

The companies have had several aircraft damaged or destroyed in Dnipro International Airport and Boryspil International Airport following missile attacks as a result of the war.

None of the planes is airworthy, so the businesses are claiming under the war risks and/or the all-risk insurance for total losses.

The insurers have applied for an application hearing over jurisdiction, stating that the reinsurance policies contain exclusive Ukrainian jurisdiction clauses.

The claimants (including Aercap, and Genesis) collectively are using Fountain Court Derrick Dale KC, Brick Court’s Tony Singla KC and Matthew Reeve KC from Quadrant Chambers.

They will have three arguments against the application, which includes – exclusive jurisdiction clauses in the reinsurance policies don’t bind the claimants who are not parties to those policies. Secondly, because the clauses don’t nominate a specific commercial court in Ukraine they’re not enforceable under Ukrainian law.

Finally, due to the ongoing war in Ukraine following Russia’s invasion in February 2022, the claimants will tell the court that it’s not appropriate to force them to litigate in a war zone when the English court is well placed.

This is a similar argument from the insurers that was used last month in the Russian case, as they asked the court to move the aviation legal action from England to a Russian court.

The Ukrainian application hearing will be in court tomorrow (Tuesday) until Thursday in front of Mr Justice Henshaw.

Commenting on the case, Viktor German, Wind Rose’s director of commercial business aviation, said: “The impact of the Russian war on Wind Rose and its lessors cannot be overstated. Wind Rose’s fleet has been lost since the invasion of Ukraine and closure of its airspace.”

He added that “having purchased war and all risk insurance underwritten by the London market, it is hugely disappointing that the market is not honouring the claims”.

While Ned Beale, partner at Hausfeld and Co added: “The London market is refusing to allow the London courts to determine these claims, despite the self-evident problems with trying to pursue them in Ukraine. The reinsurers’ approach is even more disappointing given they refused an open offer to resolve all jurisdictional differences by entering an arbitration”.