UK Court Keeps $10B Dispute on Planes Leased to Russian Firms
The U.K. High Court of Justice last week said it has jurisdiction to hear a nearly $10 billion dispute between Russian aircraft companies and the owners, lessors and financing banks of those aircraft leased to Russia.
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Following Russia's invasion of Ukraine, the aircraft owners issued "default and termination notices" under the lease agreements for the planes because of Western sanctions against Moscow, but the Russian airlines didn't return the aircraft. After some settlements over many of the planes and engines, litigation continues for 208 aircraft and 31 engines worth just under $10 billion.
The aircraft owners sought to keep jurisdiction in the U.K. for several reasons, including because they said British companies wouldn't get fair treatment in Russia. But the Russian airlines and reinsurers said they have reinsurance slips that show reinsurance policies with "Russian exclusive jurisdiction clauses," adding that Russian law governs the leases.
The court sided with the aircraft owners, finding that they "are very unlikely to obtain a fair trial in Russia." The court also found that there would be a "far greater risk of inconsistent findings on fundamental issues were these claims to proceed in Russia, as well as an element of risk of personal attacks" on people attending trial.