[2025] EWHC 1430 (Comm)

The Aircraft which are the subject of these actions were leased to lessees on the terms of aircraft leases, entered into at different times. The terms of those leases differed, but were relatively standardised.

Relevantly for these claims, all the leases contained provisions which required the lessee to effect insurance in respect of the aircraft the subject of the lease.

An example of the relevant provisions is provided by those set out in the Common Terms Agreement between AerCap and Aeroflot, which were actually incorporated into various of AerCap’s leases. The relevant terms are set out in Annexe 2 to this judgment.

As required by such provisions in the aircraft leases, the lessees took out an insurance policy or policies, and often the insurers under that policy or policies reinsured their exposure, typically with London and international market reinsurers. The lessors were typically not directly involved in the placing of the insurance or reinsurance policies, and were not provided with a copy of the policy(ies) placed. Instead they were provided with certificates of insurance and reinsurance recording that cover was provided to the operator, as the ‘insured’ or ‘original insured’, in respect of aircraft hull, spares and equipment all risks cover, and in respect of war risks and allied perils.

It was not in issue between the insurance broking experts or the parties that the leases required some protection of the lessor’s interests to be noted on the OPs, though there was argument as to the extent of the protection required, nor was it in issue that this was often required to be effected through the use of market standard form AVN 67B or 67C, with the lessor being named as an ‘additional insured’ or as a ‘contract party’.

The terms of AVN 67B and AVN 67C are set out in Annexe 3 to this judgment. As can be seen from those provisions, AVN 67C, unlike AVN 67B, contains a specific provision that there is no cover for the theft or alleged theft of the aircraft by reason of the actual or alleged dispossession or refusal or failure to redeliver the aircraft by ‘the Insured’, i.e. by the lessee.

Some of the leases relevant to this case provided for the use of AVN 67B, or for AVN 67C, or for AVN 67B or C. In the case of AerCap’s leases for the AerCap Aircraft, the lease requirements in this respect can be broken down as follows.

In DAE/Falcon’s case the position was as follows:

None of the Merx leases specified which of AVN 67B or 67C should be used in the lessee’s insurance. In the case of two of the leases, it was specified that a form of AVN67 should be used. In the case of the other four leases, it was specified that the insurance should be in line with best, or prudent, market practice.

The lease in respect of the Genesis Aircraft stipulated that AVN 67B should be incorporated.