Kathmandu. Aviation insurance companies have suffered a major setback. The High Court of Commerce in England and Wales has dismissed Ireland’s claim to Chubb European Group and Fidelis B. Chubb and Fidelis were seeking to recover nearly $340 million from war-risk underwriters related to aircraft stranded in Ukraine following Russia’s invasion of Ukraine.
Judge Picken ruled May 13, dismissing the insurance companies’ claims for contributions and damages and directing them to other pathways for a potential recovery. The lawsuit stems from the massive Russian aircraft lawsuit that began with the 2022 attack. Western-leased aircraft operated by Russian Airlines were virtually grounded or seized under Russian orders. As a result, aircraft leasers such as Aircap and Merex Aviation Finance suffered huge losses.
In a previous ruling in June 2025, Chubb and Fidelis were found liable under the Lease Insurance Program’s Contingent War Risk Policy. Chubb paid $576 million to AirCap and signed a separate deal with Merckx. Fidelis paid about $240 million to AirCap and about $450 million to Merckx. That’s more than $340 million.
Chubb and Fidelis argued that war-risk underwriters, who provide primary coverage under Russian Airlines’ operator policy, were primarily responsible for the losses. According to them, the contingency payment effectively eliminated the obligations that primary underwriters had to cover, making them entitled to contributions or reimbursements.
However, the court has held that insurance companies, as secondary or contingent liablers, do not have a direct right to indemnify or contribute to war-risk reinsurers in this way. This decision highlights the complexities of the war risk exclusion, the contingency coverage structure and the interplay between lessor and operator policies in aviation insurance. It comes amid an ongoing lawsuit over Russian aviation issues. Operator policy tests are still scheduled for late 2026.
The results can shape how similar claims are handled in the market. Potentially geopolitical risk scenarios affect reinsurance arrangements and loss sharing.
The decision is a major setback for Chubb and Fidelis. However, both companies have a strong financial position overall in the global insurance market. According to industry experts, the lawsuit highlights persistent challenges in recovering losses related to government action and the threat of war.
At a time when the aviation insurance sector grapples with the fallout from the Ukraine conflict, the ruling could prompt a larger scrutiny of policy terminology and risk pricing for risks related to geopolitical instability. –Agency
