As previously reported, following Russia’s invasion of Ukraine, the Russian Government restrained and detained a large number of western aircraft that had been leased to Russian airline operators. Aircraft lessors, including AerCap and Merx, suffered substantial losses as a result.

The insurance arrangements relevant to this dispute operated across two distinct layers:

• Lessor policies: 'Contingent' war risk policies taken out by the aircraft lessors. These were backup policies, designed to respond only where the primary operator insurance failed to do so.
• Operator policies: War risk policies covering the Russian airline operators, backed by reinsurance arrangements under which the applicants (the reinsurers) were liable.

As reported in our December 2025 edition, Mr Justice Butcher delivered his judgment in the Russian aviation ‘mega trial’ AerCap Ireland Limited & Others v AIG Europe & Others in June 2025 in favour of the claimant aircraft lessors against ‘war risks’ insurers, holding that they were entitled to be indemnified under their contingent war risk policies.  

Subsequently in September 2025, Mr Justice Butcher also denied ‘war risks’ insurers application for permission to appeal but following a hearing on 31 March 2026, the Court of Appeal granted permission for war risks insurers to appeal which is yet to be heard. 

Following that earlier ‘lessor policy’ litigation (the LP Judgment), Chubb and Fidelis paid out substantial sums to AerCap and Merx under their respective contingent lessor war risk policies. 

They then sought to recover those payments from the operator policies reinsurers, arguing that the operator policies (and therefore the reinsurers) should have responded first. Operator policies reinsurers applied to strike out the contribution claims and for summary judgment. 

The issues

Chubb and Fidelis advanced their case on three principal bases:

1. Contribution: They argued that, as parties who had discharged a liability that the operator policies reinsurers also shared, they were entitled to a contribution from the operator policies reinsurers towards that cost.
2. Indemnity/reimbursement: They argued that they were entitled to be reimbursed directly by the operator policies reinsurers.
3. Civil Liability (Contribution) Act 1978: They argued the statutory contribution regime entitled them to recover from the operator policies reinsurers as parties liable for the same damage.

The Court’s decision

The Commercial Court handed down its decision on 13 May 2026 and allowed the operator policies reinsurers applications to strike out the claims and granted summary judgment dismissing them. Each ground of claim was rejected.

Contribution

The court found that Chubb’s and Fidelis’s payments to the lessors did not discharge the operator policies reinsurers’ separate liability. 

Under the legal principle of res inter alios acta, a payment made by one party does not extinguish an obligation owed by a separate, unconnected party, unless the situation constitutes double insurance.

Double insurance arises where the same assured holds two policies covering the same risk and has a genuine free choice as to which insurer to claim against. In such cases, the paying insurer may seek contribution from the other.

The court held that this was not a double insurance situation for the following reasons:

• The lessor policies were contingent in nature, they were only ever designed to respond as a fallback, not as co-ordinate cover alongside the operator policies.
• There was no mutuality between the two sets of policies.
• The lessors did not have a free choice of which insurer to approach, the contingent structure of their policies meant they could only claim under those policies when the operator insurance had failed.

Accordingly, the contribution claim failed at its foundation.

Indemnity and reimbursement

The court rejected the direct reimbursement claims on a further, distinct ground. Where an insurer pays out under a policy and wishes to recover that payment from another party, the correct legal mechanism is subrogation, meaning the paying insurer pursues a claim in the assured’s name, not its own.

Chubb and Fidelis had sought to bring direct claims in their own names. The court confirmed this was not permissible. Any such recovery must be pursued through subrogation in the name of the lessors (AerCap and Merx), not by way of an independent direct action by the insurers themselves.

Civil Liability (Contribution) Act 1978

The court also rejected the statutory contribution claim under the 1978 Act, for two independent reasons:

• Nature of the liability: The reinsurers’ obligations under Russian law were characterised as a debt, rather than damages. The 1978 Act applies only where parties are each liable for the same damage and therefore does not extend to debt obligations of this nature.
• Liability not discharged: Even if the Act had applied in principle, it requires that the claiming party’s payment must have discharged the other party’s liability. The court found that Chubb’s and Fidelis’s payments to the lessors had not discharged the reinsurers’ separate liability, it remained intact and owing. Accordingly, a statutory contribution claim could not be sustained.

Impact on the insurance market

This decision provides important clarity for the aviation insurance market and beyond:

• Contingent cover is structurally distinct from co-ordinate cover: Insurers providing contingent or backup policies should not assume they can seek contribution from primary or operator-level insurers simply by virtue of having paid a claim.
• Contribution between insurers requires genuine double insurance: The absence of mutuality and free choice of insurer will be fatal to any contribution such claim.
• Subrogation is the proper route for recovery: Paying insurers must pursue recoveries in the name of their assured, not by way of direct action in their own name.
• The 1978 Act has limits: Where a liability sounds in debt rather than damages, particularly under foreign law, statutory contribution will not be available.