© Reuters. FILE PHOTO: The logo of insurance company Swiss Re is seen in front of its headquarters in Zurich, Switzerland February 12, 2019. REUTERS/Arnd WIegmann/File Photo
By Carolyn Cohn and Kirstin Ridley
LONDON (Reuters) – Swiss Re (OTC:) is among a growing list of reinsurers to drop its demand that a near $10 billion battle with aircraft leasing companies, seeking payouts for more than 200 jets stuck in Russia, should be heard in Moscow, court filings show.
Swiss Re’s decision to accept the jurisdiction of English courts follows a similar decision by peer Chubb (NYSE:) late last year as a battle against lessors, including Ireland’s AerCap, U.S.-listed Carlyle Aviation Partners and New York and Dublin-based Merx Aviation, heats up.
Swiss Re and Chubb declined to comment.
The two heavyweights are among around 35 defendants that will now allow the case to be heard in England, court documents showed, as the first day of a London High Court jurisdiction hearing kicked off on Wednesday.
More than 400 aircraft have been stuck in Russia since Western nations slapped sanctions on the country following its invasion of Ukraine two years ago, prompting a wave of lawsuits that include two complex group claims in London.
Wednesday’s case turns on “operator” policies, under which Russian airlines leased the jets through international lessors, insured them through Russian insurers, and reinsured those policies through the London market. Lessors are named as insured and can therefore also claim directly in some instances.
Reinsurers fighting the claim say their policies stipulate this case should be heard in Moscow. But lessors argue there are strong reasons not to enforce jurisdiction clauses that would put them at risk of unfair hearings and inconsistent judgments.
“It is common ground that the Russian state may be prepared to interfere in the hearing of cases in Russia where its interests are sufficiently involved,” Tom Weitzman, a lawyer for lessors leading the jurisdiction challenge, told the court.
About 20 reinsurers, however, including AIG (NYSE:), AXA and some Lloyd’s of London syndicates, still want the claims heard in Russia.
Lloyd’s declined to comment. AIG and AXA did not immediately reply to a request for comment.
“Whilst many insurers have seen sense that the prospect of a Moscow hearing is completely unworkable, others are maintaining their jurisdiction challenges for purely tactical reasons in a gross exploitation of Russia’s invasion of Ukraine and the grave situation that exists today,” a spokesperson for Carlyle Aviation Partners said.
Some lessors led by AerCap, the world’s biggest lessor, are also suing insurers under “contingent and possessed” policies in London, Dublin and some U.S. states. A London “mega trial” is scheduled for October.
Deals with Russia, meanwhile, have started shaving the size of claims. Since launching their lawsuits, lessors have secured settlements totalling more than $2.5 billion for more than 100 jets, with ownership transferred to Russian airlines.
