The Commercial Court has handed down judgment in AerCap Ireland Capital Designated Activity Company and Ors. v PJSC Insurance Company Universalna and Ors [2024] EWHC 1365 (Comm), upholding applications by the defendant reinsurers to stay the claims against them for breach of exclusive jurisdiction clauses in favour of the courts of Ukraine. The Court found that exclusive jurisdiction clauses in the reinsurance policies were binding on the claimant owners and lessors and other interested parties as a matter of Ukrainian law and applied to all claims advanced by them; and that the claimants had failed to show strong reasons why those clauses should not be enforced.
The judgment is the latest decision in the multifaceted aviation insurance and reinsurance litigation arising from the Russian invasion of Ukraine. This judgment concerns claims (valued at more than US$300 million) in respect of aircraft in Ukraine insured under operator policies written with local Ukrainian insurers and reinsured in the London market.
Reinsurers challenged the jurisdiction of the Commercial Court on the ground that all of the relevant policies contained exclusive jurisdiction clauses in favour of the courts of Ukraine and on that basis applied to stay the proceedings. The Claimants sought to resist the stay on two grounds: first, that the exclusive jurisdiction clauses were not binding or applicable as a matter of Ukrainian law; and, secondly, that there were strong reasons why the claims in England and Wales should be allowed to proceed, in particular arising from the ongoing war in Ukraine and its effect on the ability to conduct litigation there.
In a judgment handed down on 6 June 2024, Henshaw J upheld reinsurers’ application and determined that the claims against them should be stayed. As a matter of Ukrainian law, the exclusive jurisdiction clauses were binding and effective. The Judge considered in detail the evidence as to the conflict in Ukraine and its impact on the administration of justice, but found that the Claimants had failed to establish that the war was likely to result in substantial delays or unacceptable difficulties in litigating the claims effectively in the courts of Ukraine. Having considered these and other factors raised in opposition to the applications, Henshaw J concluded there were no strong reasons to allow the proceedings to continue in breach of the exclusive jurisdiction clauses.
James Brocklebank KC, instructed by Leon Taylor and Oliver Saunders of DLA Piper UK LLP, acted for a group of War Risks Defendants (leading Niamh Cleary of Fountain Court Chambers).
