Aercap Ireland Capital Designated Activity Company & Ors v PJSC Insurance Company Universalna & Ors

Exclusive jurisdiction clauses selecting the courts of Ukraine were binding, enforceable and applicable to claims brought by original parties, assignees, additional insureds and third-party beneficiaries. A jurisdiction clause need not identify a particular Ukrainian court where Ukrainian law provides a sufficient jurisdictional basis for selecting the appropriate court. A party seeking to proceed in England despite an exclusive foreign jurisdiction clause must show strong reasons. Foreseeable inconvenience, procedural complexity, parallel proceedings, unfamiliarity with foreign law and the effects of war will not normally suffice. The court must give substantial weight to party autonomy and the contractual allocation of jurisdiction.

The claimants were aircraft owners, lessors, operators and financing parties seeking insurance or reinsurance payments concerning aircraft remaining in Ukraine after Russia’s invasion. The defendants applied to set aside the claims or stay them on the basis of exclusive jurisdiction clauses in favour of the Ukrainian courts.

The claimants argued that they were not bound by the clauses, that the clauses did not apply to their various contractual capacities, that clauses referring generally to the courts of Ukraine were unenforceable, and that the war and associated litigation difficulties constituted strong reasons to proceed in England.

1. Exclusive jurisdiction clauses. The defendants satisfied the good arguable case test. Applying [2017] UKSC 80, [2018] UKSC 34 and [2019] 1 WLR 3514, the court assessed whether the defendants had the better argument, whether disputed evidence could reliably be resolved, and, if not, whether there was a plausible evidential basis.
2. Binding effect. Claimants claiming as parties to the insurance or reinsurance contracts were bound by the clauses. Assignees acquired rights on the terms existing at assignment, including contractual dispute-resolution provisions. Additional insureds and third-party beneficiaries acquired rights subject to the contractual conditions governing their exercise. Consent could be given generally through the leases and procurement arrangements; specific knowledge of the jurisdiction clause was unnecessary.
3. Construction and enforceability. References to “each party” were not confined to the original contracting parties where a claimant sought to enforce rights under the contract. The clauses were sufficiently certain even where they referred to the courts of the country of the insured’s domicile rather than naming Ukraine expressly. Article 76(1)(1) of the PIL could itself found jurisdiction in the Ukrainian courts, and the appropriate local court could alternatively be identified through the Ukrainian insurers’ domicile, the location of the aircraft or other statutory connecting factors.
4. Collateral contract claim. Genesis had not shown that the reinsurance certificate created a freestanding collateral contract excluding the EJC. The certificate was naturally read as a summary subject to the terms, conditions and limitations of the reinsurance, including its choice of law and jurisdiction provisions.
5. Strong reasons. Under [2001] UKHL 64, the claimant bears the burden of showing strong reasons. The effects of war may in principle qualify, but the evidence showed that the relevant Ukrainian commercial courts were functioning, remote hearings were available, and likely delays and procedural difficulties were foreseeable or insufficiently established. The possibility of related English proceedings and the defendants’ alleged lack of genuine desire for a Ukrainian trial did not alter the conclusion.
6. Disposition. The applications succeeded. The claims were to be stayed in favour of proceedings in Ukraine, subject to submissions on the precise form of relief.