Zephyrus Capital Aviation Partners 1d Limited & Ors v Fidelis Underwriting Limited & Ors
[2024] EWHC 734 (Comm)
Aercap Ireland Capital Designated Activity Company & Ors v PJSC Insurance Company Universalna & Ors
6 June 2024
[2024] EWHC 1365 (Comm)
High Court
Several companies sued insurers over planes stuck in Ukraine. Insurers said the contracts required the case to be in Ukraine. The judge agreed, saying that while the war in Ukraine makes things difficult, the Ukrainian courts can still handle the case. The companies have to sue in Ukraine.
Key Facts
- •Multiple claims were brought in the English court by lessors and other interested parties against insurers and reinsurers concerning aircraft in Ukraine following the Russian invasion.
- •The defendants challenged the English court's jurisdiction based on exclusive jurisdiction clauses (EJCs) in the insurance and reinsurance contracts in favour of Ukrainian courts.
- •The aircraft were leased to Ukrainian airlines under leases governed by English or Irish law, requiring insurance naming the lessors as additional insureds and containing cut-through clauses (CTCs).
- •The reinsurers, primarily from the London market, argued the EJCs were binding on the claimants, while the claimants argued the EJCs were not binding or enforceable due to various reasons.
- •The Claimants argued that the EJCs were not binding, unenforceable due to lack of specific court identification, and that strong reasons existed to not enforce them.
- •Expert evidence was presented on Ukrainian law, procedure, and the functioning of the Ukrainian court system since the Russian invasion.
- •The court considered the impact of the ongoing conflict in Ukraine on the Ukrainian court system's ability to function effectively.
Legal Principles
Strong reasons test for stays in breach of EJC
Donohue v Armco Inc [2002] 1 All ER 749
Three-stage test for determining a good arguable case on jurisdiction
Brownlie v Four Seasons Holdings Inc [2017] UKSC 80, Goldman Sachs International v Novo Banco SA [2018] UKSC 34, Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] 1 WLR 3514
Ukrainian Private International Law (PIL) and Commercial Procedure Code (ComPC) provisions on jurisdiction
Law of Ukraine No. 2709-IV “On Private International Law”, Commercial Procedure Code of Ukraine No.1798-XII
Ukrainian law on contract formation, third-party beneficiaries, and assignees
Civil Code of Ukraine (CC) Articles 511, 512, 514, 636, Insurance Law of Ukraine, Article 3
Ukrainian principles of contractual interpretation
Civil Code of Ukraine (CC) Article 213
English law principles of contractual interpretation and conditional benefit
Various English cases, including Airbus SAS v Generali Italia SpA [2019] EWCA Civ 805
Outcomes
The defendants' applications to set aside the claim forms or stay proceedings succeeded.
The court found the EJCs were binding on the claimants, applicable to all their claims, and enforceable. No strong reasons existed to justify the claims proceeding in England despite the EJCs.