UK Aercap judgment – court rejects EU & US sanctions defence – lessors win insurance claim for aircraft grounded in Russia

12 June 2025

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The High Court has found in favour of aircraft lessors (AerCap, DAE and Falcon, Merx and Genesis) in joined insurance claims relating to aircraft that were grounded in Russia when Ukraine was invaded- [2025] EWHC 1430. Global Sanctions reported on previous AerCap judgments in 2024. Other aircraft insurance claims related to Russia sanctions include Zephyrus Capital Aviation Partners 1D Ltd & Ors v Fidelis Underwriting Ltd & Ors (Global Sanctions coverage).

The lessors had leased 147 aircraft & related parts to companies in Russia, insured value over $4.5b. In September 2022, the Russian Government said that it would be retaining leased aircraft in Russia. The judgment decides that all claimants can recover from their insurers under policies. The Court held that EU and US sanctions did not prevented insurers from the indemnifying claimants.

US sanctions

Insurers said some of the aircraft were subject to the US Export Administration Regulations (due to being manufactured in the US or including US components). They argued a payment would therefore fall under the US BIS General Prohibition 10, which prohibits transactions with knowledge of an EAR violation. The Court found this prohibition did not apply to the provision of insurance:

• the prohibition does not mention insurance, and

• preventing an insurer from providing cover to the lessors for aircraft kept in Russia against their wishes did not further the objectives of the EAR (to control exports to further US national security and foreign policy)

EU sanctions

One insurer claimed EU sanctions (Articles 3c(2) and 3c(4)(b) of Reg 833/2014) prevented payment. Those articles prohibit insurance/financing/financial assistance to people/entities in Russia or for use in Russia in relation to goods/tech (including aircraft) listed in an Annex to the Regulation. The Court found:

• payment to the lessors was not insurance provided ‘to any person, entity or body in Russia or for use in Russia’

• those parts of the regs were intended to impose/contribute to “massive consequences and severe costs” for Russia

• EU Commission FAQs made clear that the Commission does not consider insurances of this type to breach Reg 833/2014