[2025] EWHC 1430 (Comm)

I have already set out Item 4 of the Schedule to AerCap’s policy. LIC and Fidelis contend that any claim of AerCap under Section Three is limited to US$ 300 million because, if aircraft were lost by a ‘restraint’ or ‘detention’, it was one ‘by or under the order of the Government of country of registry…’. They point out that the Bermudian and Irish authorities concluded agreements permitted by Article 83bis of the Chicago Convention by which, in certain circumstances they transferred to Russia some of their regulatory obligations under that Convention. The Bermuda-Russia agreement, dated 27 September 1999 transferred to Russia functions and duties in relation to personnel licensing, rules of the air and operation of aircraft. The Ireland-Russia agreement, dated 26 April 2002, transferred similar functions. Those transfers are said to make Russia ‘effectively … the state of registry under the Chicago Convention for the purposes of those functions and duties’, and the ‘country of registry’ for the purposes of the Schedule to the Policy.

I found that a surprising argument. In my judgment, the Policy envisages that there is one ‘country of registry’ for each aircraft. There is no doubt that the AerCap Aircraft at issue were, before the invasion of Ukraine, registered either in Bermuda or Ireland. Article 18 of the Chicago Convention makes clear that there cannot be dual registration: there can only be one country of registry. The ‘country of registry’ for the purposes of the Schedule is, in my view, the country of registration, namely Bermuda or Ireland. The Schedule does not refer to what is ‘effectively’ the state of registry for some purposes, and cannot, in my view, be read as doing so.

WR Insurers relied on the same point as a defence to the Merx claim. In that case the ‘government of registry’ clause was a full exclusion to the WR Cover, rather than a limit, but otherwise the clauses were materially similar. My reasoning above applies equally to the Merx clause. I do not find WR Insurers’ point persuasive.