Lloyd’s of London is being sued for $875m (£735m) over its failure to pay out on a multi-million-dollar insurance claim filed over the Russian state’s decision to seize hundreds of planes this March.
Airplane leaser Dubai Aerospace Enterprises Ltd (DAE) has filed a High Court claim against Lloyd’s seeking more than $875m from the insurer, over aircraft seized by the Russian state following the start of the war in Ukraine, according to court documents seen by City A.M.
The High Court lawsuit comes after DAE initially sought to claim $750m from Lloyd’s insurers for the aircraft that were taken by Russia in response to Western sanctions on the country.
The Russian state has seized more than 500 foreign owned planes since the start of the war, over concerns its domestic aviation sector would collapse if the planes were grounded or returned to their owners due to sanctions.
The Kremlin in March instead decided the $10bn worth of planes would continue to be operated by Russian domestic airlines, or kept for spare parts, to ensure the continued operation of the coutnry’s aviation industry.
It is now expected the seized aircraft will continue being used by Russian airlines for a significant and extended period, due to the likelihood that sanctions imposed on Russia will persist for the foreseeable future.
The seizure of the aircraft has in turn seen airplane leasers file a series of high-profile lawsuits against their insurers in calling them to pay out on insurance policies, what threatens to become a $10bn hit to the aviation insurance sector’s balance sheet.
In the case of DAE, the Dubai headquartered leaser first filed a claim to its insurer under both its War Risks and All Risks policies on 30 August and 1 September, after first being served notice of the seizure in March.
Since first seizing aircraft in March, Russia has subsequently re-registered 800 planes, although it remains unclear to what extent those re-registered planes include the foreign-owned aircraft seized over sanctions. The Kremlin has in turn claimed 78 of its own aircraft have been seized by foreign governments.
The plane leaser is seeking an overall sum of $875,483,997, covering the value of the planes, interest, and the cost of seeking to retrieve them.
Lloyd’s of London and DAE both declined to comment.