Russian Aircraft Policy Claims: Update On Appeal And Costs

The majority of War Risk Insurers have now applied to the Court of Appeal for permission to appeal elements of the High Court judgment of Mr Justice Butcher in the Russian Aircraft Claims (summarised here) and the consequentials judgment (summarised here). Importantly, these War Risks Insurers have not appealed Mr Justice Butcher's findings on causation/peril such that there is no prospect that All Risks Insurers will be found liable for these losses under the lessors' policies.

This follows Mr Justice Butcher's refusal of War Risks Insurers' application of permission to appeal at the consequentials hearing held on 15-16 September 2025. Herbert Smith Freehills Kramer represents AerCap who was awarded USD 1.035 billion and over USD 240 million in interest from War Risks Insurers for the loss of 116 aircraft and 23 engines which had been on lease to Russian airlines.

Below we set out a summary of the grounds of appeal in these War Risks Insurers' applications to the Court of Appeal.

Before doing so, we also provide an update on Mr Justice Butcher's reserved judgment on costs following the consequentials hearing which was handed down on 6 October 2025 (a copy of which can be found here).

CONSEQUENTIALS UPDATE - COSTS

At the consequentials hearing on 15-16 September 2025 Mr Justice Butcher reserved judgment on costs. In his written judgment handed down on 6 October 2025, as well as giving his written reasons for his rulings on interest and War Risks Insurers' applications for permission to appeal, Mr Justice Butcher found the following on costs in the AerCap Claim:

1. AerCap can recover 65% of its costs from War Risks Insurers (estimated at approximately £81 million). The 35% reduction to AerCap's recovery is to allow for the fact that in relation to the issues of peril and causation, AerCap's primary case was that the loss was caused by an All Risks peril. AerCap is entitled to an interim payment of 45% of the proportion of its costs which it is entitled to recover at approximately £20 million. The costs recoverable by AerCap from War Risks Insurers are also to be reduced to reflect the fact that AerCap had settled with certain insurers.
2. All Risks Insurers in the AerCap claim can recover 90% of their costs (estimated at approximately £18 million). The 10% reduction to their recovery is because they relied on a variety of points on which they were unsuccessful. AerCap is to bear 35% and War Risks Insurers are to bear 65% of the proportion of All Risks Insurers' costs which they can recover. All Risks Insurers are entitled to an interim payment of 50% of their costs (being approximately £8 million, split between AerCap at approximately £2.8 million and War Risks Insurers at approximately £5.2 million).
3. Chubb is not entitled to recover its costs. This is because AerCap was ultimately the successful party against Chubb and was therefore to be treated in the same way as other War Risks Insurers. Chubb is responsible for its share of the 65% of costs that AerCap can recover.

PERMISSION TO APPEAL APPLICATIONS

We previously reported that Mr Justice Butcher had refused applications for permission to appeal by War Risks Insurers.

On 9 October 2025 Fidelis, Chubb and Lloyd Insurance Company (representing all remaining War Risks Insurers other than Starr) issued separate applications to the Court of Appeal for permission to appeal Mr Justice Butcher's judgment in the AerCap LP Claim. Between them insurers seek to appeal on the following grounds:

1. Construction of the contingent cover – Whether (a) the scope of cover under the contingent section of AerCap's lessor policy is limited to the scope of cover of the insurances the lessees are required to put in place under their leases with AerCap, and (if so) (b) the insurances required by the leases are in fact not intended to insure against the situation where a loss is suffered by AerCap alone but not the lessee (as was the case here).
2. Alternative Construction of the Contingent Cover – Whether the trigger for contingent cover under AerCap's lessor policy requires AerCap to show on the balance of probabilities that it could not obtain an indemnity under the Operator Policies.
3. Total loss – Whether Mr Justice Butcher would have found there to be no loss of the assets (a) had he assessed loss at the date of the commencement of the proceedings (9 June 2022) and not 10 March 2022, (b) had he taken into account the prospect of disposing of the assets for their market value by way of settlement, or (c) had he taken into account the commercial life of the assets.
4. Financial recoveries – Whether AerCap is required to reduce its claim for the credits it gave to insurers as part of the Russian Insurance Settlements (see paragraphs 1046-1047 of the substantive judgment).

These grounds are narrower than the grounds relied on before the first instance judge. Importantly, these War Risks Insurers have not sought to appeal Mr Justice Butcher's judgment on peril and causation (a ground on which they previously sought permission to appeal from the High Court and which was denied). As such there is no prospect of All Risks Insurers under AerCap's lessor policy being found liable to indemnify its loss.

Separately, on 27 October 2025 Fidelis and Lloyds Insurance Company (on behalf of all remaining War Risks Insurers) issued separate applications to the Court of Appeal for permission to appeal Mr Justice Butcher's findings on interest at the consequential hearing on 15-16 September 2025, challenging the date on which interest starts to accrue and the applicable rate.

The Court of Appeal's decision on both sets of application for permission to appeal is awaited.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.