News / AirBridgeCargo lessors sue insurers over aircraft 'seized' and stuck in Russia

Aircraft insurers are being sued in Dublin and London by leasing companies unable to reclaim aircraft stuck in Russia.

Insurer Lloyd’s of London is facing an $875m claim from Dubai Aerospace Enterprises, which had leased at least one aircraft to AirBridgeCargo (ABC), among other airlines.

Russia is thought to have seized some 500 foreign aircraft – which, according to UK media, could result in “a $10bn hit to the aviation insurance sector’s balance sheet”.

Cases are also being heard in Dublin, where BOC Aviation (Ireland) has lost 17 aircraft. It said it was unlikely to be able to recover the jets “in the foreseeable future, if ever”, according to the Irish Times. BOC is suing 16 insurance companies in Dublin’s high court.

There are at least seven legal cases in Ireland, the UK and the US, it said, involving 35 insurers for claims approaching $5bn.

In the US, meanwhile, a case between AirBridgeCargo and BOC Aviation has become ever more complex, with the Russian company issuing counter claims. The case shows that BOC seized an aircraft and is holding two engines – but they are not BOC’s engines and BOC is refusing to return them to ABC.

The pair tried to do a ‘title swap’, but the seized engines were of different value to BOC’s engines, and the owner of the seized engines, Rainbow Leasing, and SB Leasing Ireland are still considering their options, the court heard.

ABC has asked for payment for the engines of $27.5m each.

ABC’s lessors include Aircastle, Aviation Capital Group, Gecas and SB Leasing. It is understood that ABC is in talks with airlines, including Etihad and Challenge, in a bid to keep operating, but one source suggested all the talks had so far failed.

Last week, the court ordered Volga-Dnepr/ABC to “take reasonable steps to assist BOC A to procure the registration of such warranty bills of sale on the International Registry of Mobile Assets”. The case continues.