AerCap Ireland Limited v AIG Europe SA & Ors (Russian Aircraft Lessor Policy Claims)

The award of interest remains discretionary. Interest will ordinarily run from loss, but the court may allow insurers reasonable time to investigate and respond, having regard to the particular claim. For US-dollar awards, US Prime is the default rate. A party seeking a lower or higher rate must properly plead and prove the relevant borrowing evidence. Compound interest is not awarded as damages without adequate pleading and proof. Costs remain subject to the general rule that the unsuccessful party pays, but the court may adjust recovery for issues lost, settlements, conduct and alternative claims. A Bullock or Sanderson order is discretionary and particularly apt where alternative claims against connected defendants were reasonably pursued. Permission to appeal requires a realistic prospect of success or another compelling reason, with a particularly high hurdle for challenges to fact-finding and expert evaluation.

The judgment concerned consequential issues following the court’s substantive judgment in the Russian aircraft lessor policy claims, given as [2025] EWHC 1430 (Comm). Several claims had settled after the substantive judgment. Remaining disputes concerned interest, costs, payments on account, detailed assessment and permission to appeal.

The court addressed the commencement date and rate of interest on sums awarded to AerCap and Genesis under war-risk policies, whether AerCap could recover compound interest, the incidence and apportionment of costs in the AerCap, Merx and Genesis claims, the use of Sanderson orders, and whether the proposed appeals had a realistic prospect of success or another compelling reason.

1. Interest. The court applied the discretionary approach described in Quorum v Schramm (No. 2), including the general principle that interest runs from loss while allowing insurers reasonable time to investigate. For AerCap, interest ran from 9 June 2022, rather than the date of loss or the date of the initial claim. For Genesis, it ran from 20 May 2023, after its claim under the underlying policy and a reasonable period for consideration.
2. Rate and basis. US Prime was the default rate for US-dollar awards. A contention that the claimant’s actual borrowing costs justified a lower rate had to be pleaded and properly explored; the spreadsheet relied on by insurers was insufficient. Post-judgment interest was also awarded at US Prime. AerCap failed to plead and prove a compound-interest loss, so interest was awarded simply under section 35A of the Senior Courts Act 1981.
3. Costs. The starting point under CPR r 44.2 was that successful parties should recover their costs, subject to the court’s discretion. AerCap recovered 65% of its costs from the relevant war-risk insurers, reflecting its unsuccessful primary case on peril. All-risks insurers recovered 90% of their costs. Liability was generally several and proportionate to policy lines, with adjustments for settlements. Payments on account and interest on costs were ordered on the stated percentages and rates.
4. Sanderson orders. The court applied the principles in Irvine v Commissioner of the Police for the Metropolis. In the AerCap and Merx claims, war-risk insurers were ordered to pay specified shares of the successful all-risks insurers’ costs directly. In the Genesis claim, the relevant war-risk insurers were similarly ordered to pay the all-risks insurers’ costs, while Genesis bore the appropriate share where its claims failed.
5. Permission to appeal. Permission was refused. The grounds lacked a realistic prospect of success and there was no other compelling reason for an appeal. The court applied the particularly high hurdle identified in LZLabs GmbH v IBM UK Ltd, especially to challenges involving factual findings, evaluative judgments and expert evidence. Detailed assessment in the AerCap, Merx and Genesis claims was extended to 31 March 2026, with liberty to apply.

This was a first-instance consequential judgment following the substantive judgment in the same litigation, [2025] EWHC 1430 (Comm). Permission to appeal from the substantive judgment was refused.