Beijing-controlled BOC Aviation, Japanese-owned SMBC Aviation Capital and Nordic Aviation Capital have joined Avolon in settling lawsuits against insurers over multimillion-euro losses when planes were seized by Russian airlines three years ago.
The companies were among a group of lessors that took a total of more than €2.5 billion of claims to the High Court in Dublin, where Ms Justice Eileen Roberts opened hearings last June.
The financial terms of the various settlements are not known.
The mammoth action has involved about 180 lawyers and has been estimated to have the potential to result in legal fees running into hundreds of millions of euros.
A spokesman for Singapore-headquartered BOC Aviation has confirmed the company has discontinued proceedings against various insurers. These include Lloyds Insurance Company and Warren Buffett’s Berkshire Hathaway, according to court filings.
“We are subject to confidentiality obligations in relation to that discontinuance so are unable to comment further regarding the terms of any settlement agreement,” he said. BOC Aviation remains involved in similar litigation in London’s high court.
[ AAvolon settles $300m case with insurers over aircraft seized in RussiaOpens in new window ]
SMBC has settled insurance cases against Swiss Re and Score Europe on confidential terms, a spokesman for the Dublin-based company said. However, it is continuing cases against others.
Nordic Aviation Capital (NAC), another plaintiff lessor, settled some of its cases last summer, shortly after the hearings began, but resolved outstanding actions more recently, according to multiple sources. A spokeswoman for the company declined to comment.
The Irish Times first reported on Friday that Dublin-based Avolon had settled its cases against insurers, including Lloyds Insurance Company. A spokesman declined to comment on the financial details of the accord.
Two other lessors, CDB Aviation and Hermes Aircraft A1264, have also been part of the case. It is widely expected by legal sources that further lawsuits will be settled.
A spokesman for CDB did not respond to efforts by The Irish Times to secure comment on Thursday. Directors of Hermes Aircraft A1264 have not responded to calls and messages left on Thursday.
Irish aircraft lessors were among the first businesses caught up in the fallout from the conflict sparked by Russia’s invasion of Ukraine, given that over 60 per cent of the world’s leased aircraft are managed from this country.
The Republic’s position as a big leasing hub can be traced back to the late Tony Ryan’s Guinness Peat Aviation (later GPA Group) founded 50 years ago in Shannon, Co Clare.
The Irish lawsuits echo actions taken by lessors against insurers in other jurisdictions in recent years, including London. Reuters estimates the sector racked up at least $8 billion of losses after more than 400 planes were stranded in Russia following western sanctions over Moscow’s war in Ukraine that forced the termination of their leases.
The plaintiffs in the Irish action said at the outset of the trial that when the Russians invaded Ukraine on February 24th, 2022, the aircraft were subject to aircraft lease agreements with Russian airlines.
Following the imposition of European Union (EU) sanctions on Russia, the leasing firms sought the return of the aircraft, but they were not returned.
The firms were seeking orders and declarations including that they are entitled to cover under either “war – risk” or “all-risk” policies. Insurers on the other side of the case included Chubb, AIG and Fidelis.
The insurance firms denied that all – risks or war – risks policies are engaged. It was argued by some insurers that there had not been a physical loss of the planes yet, or that the planes are still in the course of being repossessed.
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