Double Trouble? Contribution Claims Of “contingent” Insurers Struck Out

In the Russian Aircraft Litigation – Operator Policy Claims [2026] EWHC 1134, the Commercial Court ordered that contribution claims totalling approximately USD 350 million brought by contingent insurers against the primarily liable insurers be struck out and summarily dismissed. The Court held that the contingent insurers’ claims sounded in subrogation, not contribution.

The judgment provides a useful restatement of the law governing claims as between insurers. It draws a clear distinction between the circumstances in which rights of (1) subrogation; or (2) contribution or reimbursement, will arise.

This judgment is as part of the so-called ‘Operator Policy Claims’ made by aviation lessors under the lessee airlines’ (re)insurance policies in respect of the loss of aircraft leased to Russian airlines following the invasion of Ukraine. These are separate to the claims brought by the lessors for this loss under their so-called ‘Lessor Policies’ on which the High Court judgment was handed down in 2025 (for a summary see here) and which is currently subject to appeal to be heard by the Court of Appeal (for a summary see here). This firm acts for AerCap, the world’s largest aviation lessor, in both the Operator Policy Claims and Lessor Policy Claims.

BACKGROUND

The judgment arose in the context of insurance claims brought by two aircraft lessors (the Lessors), AerCap and Merx. The Lessors’ claims relate to the loss of aircraft and engines (the Aircraft) which had been on lease to Russian airlines (the Airlines) and which could not be recovered following Russia's invasion of Ukraine.

The Lessors were insured under two sets of policies which provide cover for loss of and damage to the Aircraft:

• Operator Policies - Under the terms of the leases the Airlines insured and reinsured the leased Aircraft under policies known as the ‘Operator Policies’ covering (amongst other things) physical damage and loss. The direct policies were underwritten by Russian Insurers. The lessor is named as an ‘Additional Insured’ or contract party. The Russian Insurers were then reinsured under reinsurance contracts underwritten largely by London market and other Western reinsurers. Each Operator Policy reinsurance contained a ‘cut through’ clause entitling the applicable Lessor to bring a direct claim against the reinsurers in respect of any loss of, or damage to, their interest in the Aircraft. The Operator Policy insurances and reinsurances were both governed by Russian law.
• Lessor Policies - The Lessors also obtained their own insurance in respect of their interests in the Aircraft, known as the ‘Lessor Policies’. The Lessor Policies (amongst other things) provided ‘contingent cover’. Broadly, this is designed to cover the Aircraft while on lease and responds if and to the extent the Lessor is “not indemnified” in whole or in part under the Operator Policies (in the case of AerCap’s Lessor Policy) or if the losses are not “recoverable” under the Operator Policies (in the case of the Merx Lessor Policy). The Lessor Policies were governed by English law.

Both sets of policies provide All Risks and War Risks cover. The (re)insurers under the All Risks and War Risks sections are different.

Following the loss of their Aircraft in Russia, the Lessors claimed under both the Operator Policies and Lessor Policies. Since neither set of (re)insurers agreed to pay the claims, the Lessors commenced proceedings against both sets of (re)insurers in the English courts:

• The Lessor Policy claims were issued first and went to trial in Autumn 2024. In June 2025, the High Court handed down judgment (the LP Judgment). Mr Justice Butcher found that the losses suffered by AerCap and the other lessors fell within the contingent War Risks sections of the Lessor Policies. The Lessor Policy war risks insurers were ordered to pay AerCap their respective shares of the War Risks aggregate policy limits of USD1.2 billion. That decision is being appealed.
• The Operator Policy claims were issued several months after the Lessor Policy claims were issued, and have been case managed separately. The progress of those claims towards trial was delayed due to a (failed) jurisdiction challenge brought by the Defendants. The Operator Policy claims are ongoing and due to go to trial in October 2026. 

THE CONTRIBUTION CLAIMS

Having paid their shares of the LP Judgment sums, two of the Lessor Policy war risks insurers, Chubb and Fidelis (the LP Insurers), brought claims against the OP Reinsurers for an indemnity and/or contribution in respect of payments they had made under the Lessor Policies (the Contribution Claims). Chubb had paid USD 57.6 million to AerCap and Fidelis had paid USD 240 million to AerCap and USD 50 million to Merx.

The LP Insurers advanced their Contribution Claims on three bases:

1. The entitlement of a secondary obligor who discharges a primary obligor’s liability;
2. Double insurance principles; and
3. Under section 1(1) of the Civil Liability (Contribution) Act 1978 (the 1978 Act) 

In short, the LP Insurers argued they were entitled to a contribution and/or an indemnity from the Operator Policy (re)insurers because: 

• they were exposed to liability to the Lessors in their capacity as LP insurers; 
• the Operator Policy (re)insurers were also liable to the Lessors as (re)insurers in respect of the same loss under the relevant Operator Policies; and 
• had the Operator Policy (re)insurers provided the indemnity they were obliged to provide under those policies when they were obliged to provide it, Chubb would not have been exposed to liability at all (or in a smaller amount). 

Certain of the Operator Policy reinsurers (the Applicants) applied to strike out the Contribution Claims on the basis that there are no reasonable grounds for bringing them. Alternatively, they applied for summary judgment on the basis that the Contribution Claims had no real prospect of success.

DECISION

In his detailed judgment, Mr Justice Picken addressed each of the three bases relied on by the LP Insurers. He agreed with the Applicants that there were no reasonable grounds for bringing the Contribution Claims and that they had no prospect of success. He ordered that the Contribution Claim should be struck out. Taking each basis in turn:

1. Rights of a secondary obligor which discharges a primary obligor’s liability 

It was common ground that the case involved primary and secondary insurances: the contingent Lessor Policies were necessarily secondary because they only respond where at least a claim has been made under the Operator Policies.

The LP Insurers argued that:

1. it was established law that where B must pay damages to A due to the legal default of C, B can recover from C the sum paid to A;
2. their position was analogous to that of a guarantor who pays because of the principal obligor’s failure to do so, and who is entitled to reimbursement from the principal obligor. 

Picken J rejected those arguments. He found that, other than in cases of double insurance discussed below, insurance recoveries are res inter alios acta (a thing done between others). They do not discharge the liability of a third party, including an insurer who is primarily liable for the loss. It is only where the payments are not res inter alios acta that an indemnity, reimbursement or a contribution claim can be pursued. As a payment by the LP Insurers (as secondary obligors) did not discharge or reduce the Operator Policy (re)insurers’ primary obligations, the LP Insurers were not able to bring their claims in contribution.

Picken J also rejected the LP Insurers’ attempts to draw analogies to guarantee-type cases. In a guarantee situation the guarantor promises to perform the debtor’s obligation in the debtor’s place. If the debtor is not liable, then neither is the guarantor. Here, by contrast, it was not necessary to find liability under the Operator Policies in order to claim under the Lessor Policies. 

In the circumstances, the LP Insurers’ remedy was not a direct cause of action for reimbursement/contribution but instead lay in the ability to bring a subrogated claim in the name of the insured lessors.

2. Double insurance

Picken J accepted that in the insurance context a direct cause of action by one insurer against another would arise in a double insurance situation, i.e. where there is co-ordinate liability between two or more insurers. In that scenario, the law treats the two (or more) policies as forming a single insurance under which all insurers are liable to contribute - such that the insurers are each under a liability to the assured.

However, Picken J found there was no double insurance here. He gave three reasons. 

First, the contingent nature of the LP Insurers’ liability under their insurance arrangements made it impossible to view those arrangements as forming part of double insurance arrangements also entered into by the OP (re)insurers. As noted above, the LP Insurers’ payments to the Lessors did not discharge the OP Policy (re)insurers.

Secondly, the expressly contingent nature of the Lessor Policy cover means that the insured (lessor) did not have a free choice whether to sue one or other insurer, since they had to claim under the Operator Policies first. That is inconsistent with the notion of double insurance where the assured can choose whom to sue.

Thirdly, it is well established that, in order for there to be a right to contribution in a double insurance context, there needs to be “mutuality”. Insurer A, the paying insurer, cannot claim contribution from insurer B in circumstances where, had insurer B paid first, insurer B could not have claimed contribution from insurer A. Picken J considered it to be self-evident that there was no mutuality here: the OP (re)insurers would not have been able to claim contribution from LP Insurers, since the LP Insurers’ liability would only be triggered in circumstances where the OP (re)insurers have not themselves paid.

3. Under section 1(1) of the 1978 Act 

Picken J held that the 1978 Act did not apply.

To recap: 

• Section 1(1) of the 1978 Act states: “any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage”.
• Section 6(1) of the 1978 Act states: “[a] person is liable in respect of any damage for the purposes of this Act if the person who suffered it … is entitled to recover compensation from him in respect of that damage (whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise).”

It was common ground here that, as a matter of Russian law, the OP (re)insurers’ liability sounds in debt, and that, as a matter of English law, the LP Insurers' liability sounds in damages. However, the LP Insurers argued the claims could fall within the scope of the Act. Picken J concluded that debt claims did not fall within the scope of the 1978 Act. The OP (re)insurers were not “liable in respect of any damage” for the purposes of sections 1(1) and 6(1) of the 1978 Act and had no liability to pay “compensation” under section 6(1) of the Act. In reaching this decision, Picken J considered the various authorities on this point and noted that debt claims were distinct from damages claims, with different legal characteristics. 

In the light of this finding, Picken J did not consider it to be necessary to go on to determine the Applicants’ alternative submission that the 1978 Act has no application as between insurers. The law on this issue is unsettled. There were contradictory obiter comments on this point by two Supreme Court judges inZurich v IEG [2015] UKSC 33:

1. Lord Mance expressed doubt (without deciding the point) as to whether the 1978 Act could apply as an alternative statutory remedy (with different effects) to the Marine Insurance Act 1906 in cases of double insurance; 
2. Lord Sumption expressed the view that the 1978 Act would apply to a contribution claim between successive insurers.

In light of the uncertainty at Supreme Court level, Picken J concluded that it would not be appropriate to determine this issue at the summary judgment/strike-out stage. He did however express an obiter view that the 1978 Act does not apply as between insurers.

Finally, the Applicants contended that (i) they were not liable for the "same damage" as the LP Insurers because the “damage” in respect of which the Operator Policy (re)insurers are liable is factually and legally different to that in respect of which LP Insurers are liable; and (ii) the LP Insurers’ payments under the Lessor Policies have not discharged (even in part) their liability to the Lessors. Picken J found that even if the correct approach were to assume that there is a real prospect that the Court will conclude that the Operator Policy (re)insurers’ liability under the Operator Policies is not legally and factually distinct from the LP Insurers’ liability under the Lessor Policies (as submitted by the LP Insurers), the fact remains there was no relevant discharge of the Operator Policy (re)insurers’ liability by the payments that were made by the LP Insurers.

Conclusion

Picken J therefore ordered that the Contribution Claims should be struck out and summary judgment entered dismissing the Contribution Claims. If the LP Insurers wish to recover the sums they have paid under the Lessor Policies from the Operator Policy (re)insurers, they must do so by bringing subrogated claims in the names of the insured lessors.

COMMENT

The judgment provides helpful guidance on when claims between insurers should be brought as claims for contribution or reimbursement, and when they should instead be pursued by way of subrogation.

It also confirms that debt claims are not within the scope of the 1978 Act. However, as under English law claims under insurance policies can be for damages, it leaves open the interesting question of whether a contribution claim as between insurers can be brought under the Act.

In terms of next steps, Picken J rejected an application by Chubb for permission to appeal the strike out / summary judgment decision. It remains to be seen whether either LP Insurer will now apply to the Court of Appeal for permission.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.