Case Nos: CL-2022-000294; CL-2022-000557; - [2025] EWHC 2529 (Comm)

Commencement Date

As to Genesis, its primary case was that interest should run from the date of loss, 10 March 2022. It contends that the ‘failed to respond’ contingency referred to in paragraph 470 of the Judgment does not defer the accrual of a cause of action until after there has been a claim on the OP policy and there has been a failure by OP insurers to pay or accept responsibility to pay that claim.

Whether or not Genesis is strictly right about the date of accrual of a cause of action or not, I do not consider that it is appropriate to award interest from before the date on which Genesis made a claim on its OP policy, which was 18 April 2023. Further, I consider that it is reasonable to allow a relatively short period after that date for LP insurers to give further consideration to their position. It should be relatively short, not only because War Risks Insurers will have been considering their position since March 2022, but also because Genesis had issued its proceedings in relation to its LP cover on 15 March 2023. In my view the appropriate date to take is a bit over a month from 18 April 2023, namely 20 May 2023.

Rate

Genesis, at the hearing, sought an award of pre-judgment interest at the rate of Prime plus 2%, the uplift said to reflect its smaller scale of aircraft leasing operations than those of AerCap and Merx.

For their part, War Risks Insurers contended that Genesis belonged to the class of major aircraft leasing companies; and that evidence of the rate at which this category of company could borrow was provided by Merx’s actual cost of borrowing, which was SOFR + 200 bps. SOFR + 200 bps has tracked US Prime but has consistently been 1.2% lower than Prime. Accordingly, Genesis should be awarded interest at Prime – 1.2%.

Neither Genesis’s case that it should recover more, nor insurers’ case that it should recover less, than US Prime was pleaded. There was no exploration during the trial of Genesis’s actual borrowing costs in the relevant period. It appears to me that the appropriate rate to take is, again, the default rate of US Prime.

Costs

There were extensive arguments as to the incidence of costs and other issues relating to costs. This was perhaps unsurprising given the very large sums claimed by different parties.