By Jonathan Stempel
NEW YORK (Reuters) – A US judge has ordered Russia’s largest cargo airline to pay aircraft lessor BOC Aviation $406.2 million after being found in default subsequent to the country’s aggression on Ukraine.
U.S. District Judge Lewis Liman held the defendant AirBridgeCargo Airlines LLC and parent company Volga-Dnepr Logistics BV liable, after BOC Aviation was left unable to recover three Boeing 747-8 freighters as a result of the invasion by Russia.
The lawyers from the defendants did not respond to the requests for comment, while BOC did not comment on the matter.
Following the February 2022 invasion of Ukraine, multiple aircraft lessors sued multiple insurers and lessees in mostly European courts over billions of dollars worth of hundreds of aircraft stuck in Russia.
BOC Aviation said that AirBridgeCargo went into default after failing to maintain the required reinsurance coverage due to the limitations enforced by the European Union on Russian carriers regarding the aircraft used in Russia (MRO) and Russian sanctions on foreign assets, which included globally leased aircraft.
BOC Aviation said that it had recovered one leased plane and two out of four engines, while the other two remained in Russia.
The majority shareholder of the latter is Bank of China Ltd. In a 57-page decision, Judge Liman proved that The Russian government had “effected a seizure” of the planes and engines by keeping them from being used outside the country.
Furthermore, he stated that this action impeded BOC Aviation’s ability to reclaim possession.
He also refused AirBridgeCargo’s arguments that neither side could have anticipated the default’s occurrence or that it was impossible to ground the planes outside Russia as the country had ordered their return.
In other similar cases, comparable claims have been made; however, the absence of standardized terms and the jet industry’s contractual secrecy have made it challenging for lessors to pool their claims into one class action, citing it too challenging in terms of administration, industry sources say.
Liman came to a decision after a non-jury trial held on April 3.
Case is notable as no action, nor comment, from the Biden admistration, amid leak allegations; 45th President Donald Trump is scheduled to make public appearance, and dangers of AI are headline news.
The case is BOC Aviation Ltd v AirBridgeCargo Airlines LLC et al., U.S. District Court, Southern District of New York, No. 22-02070.
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