High Court allows plaintiffs to recover damages and interest from PICC for breach of insurance contract regarding lost aircraft.

APPROVED [2025] IEHC 657

THE HIGH COURT

COMMERCIAL

Record No.: 2022/5759P Between/ CDB AVIATION LEASE FINANCE DESIGNATED ACTIVITY COMPANY, GY AVIATION LEASE 1818 CO., LIMITED, GY AVIATION LEASE 1830 CO., LIMITED, GY AVIATION LEASE 1817 CO., LIMITED, GY AVIATION LEASE 1852 CO., LIMITED, GY AVIATION LEASE 1702 CO., LIMITED, GY AVIATION LEASE 0906 CO., LIMITED, GY AVIATION LEASE 1856 CO., LIMITED, GY AVIATION LEASE 1712 CO., LIMITED and GY AVIATION LEASE 1713 CO., LIMITED.

Plaintiffs -and-

LLOYD’S INSURANCE COMPANY S.A., CHUBB EUROPEAN GROUP SE, SCOR EUROPE SE, GLOBAL AEROSPACE UNDERWRITING MANAGERS LIMITED, GLOBAL AEROSPACE UNDERWRITING MANAGERS (EUROPE) SAS, GREAT LAKES INSURANCE SE, BERKSHIRE HATHAWAY EUROPEAN INSURANCE DAC, TOKIO MARINE EUROPE S.A., MAPFRE ESPAÑA, COMPAÑÍA DE SEGUROS Y REASEGUROS, S.A., MSIG INSURANCE EUROPE AG, HDI GLOBAL SPECIALTY SE, SWISS RE INTERNATIONAL SE, FIDELIS INSURANCE IRELAND DESIGNATED ACTIVITY COMPANY, STARR EUROPE INSURANCE LIMITED, SWISS RE INTERNATIONAL SE, AXIS SPECIALTY EUROPE SE, HDI GLOBAL SPECIALTY SE, PICC PROPERTY AND CASUALTY COMPANY LIMITED, PING AN

NO REDACTION REQUIRED PROPERTY & CASUALTY INSURANCE COMPANY OF CHINA, CHINA PACIFIC PROPERTY INSURANCE CO LTD, and TAIPING GENERAL INSURANCE ZHEJIANG BRANCH CO LTD Defendants

JUDGMENT of Mr Justice Rory Mulcahy delivered on 27 November 2025

Introduction

1. This judgment concerns an application for assessment of damages against the eighteenth named defendant, PICC Property and Casualty Company Limited (“PICC”), following judgment in default of appearance granted by the High Court (McDonald J) on

29 April 2024.

2. The plaintiffs’ claim for damages is a claim against their insurers arising out of the loss of nine aircraft, which had been leased to Russian airlines, as a result of the Russian invasion of Ukraine. The plaintiffs’ aircraft were insured on the basis of agreed values totalling USD$441,203,612.18. They had the benefit of both ‘all risks’ cover and ‘war risks’ cover.

PICC’s share of the coverage was 10% of the agreed values of the nine aircraft. The plaintiffs have achieved settlements with a number of other insurers. Taking those settlements into account, the plaintiffs claim that PICC remains liable in the sum of USD$18,631,601.20. The plaintiffs also claim damages for delay in payment of the sums due, or in the alternative, interest pursuant to section 22 of the Courts Act 1981, as amended.

3. The application was heard on 6 November 2025. Despite PICC having been served in accordance with an order for substituted service made on 6 March 2023, there was no appearance by or on behalf of PICC.

The evidence

4. The plaintiffs provided two witness statements from Ms Stefania Raimondi, Senior Vice President on the transaction legal team at CDB Aviation Lease Finance DAC, the first plaintiff. Ms Raimondi also gave oral evidence. The documentation relied on by the plaintiffs was provided as exhibits to her witness statements.

5. The plaintiffs sue on foot of a policy of insurance, called the Contingent and Possessed Aircraft Hull, Spares and Equipment, Aviation Liability and Personal Accident Insurance Policy (“the Policy”), covering the period 15 June 2021 to 14 June 2022 inclusive. As appears from the Policy, the insurers’ liability was for the agreed values of the nine aircraft covered by the Policy, which agreed values were set out in a schedule referred to in the Policy. The Policy provided ‘all risks’ and ‘war risks’ cover. The schedule of agreed values was confirmed between the plaintiffs and their insurance broker, Willis Towers Watson, on

17 May 2021.

6. Ms Raimondi explained in her evidence that the agreed value is based on 115% of the purchase price of an aircraft, to include cost of funding, and to allow for the different specifications of each aircraft.

7. By way of what are referred to as ‘slips’, a number of insurance companies, including PICC, agreed the percentage of the total cover which each would provide under the Policy. PICC executed a slip on 18 May 2021 by which it agreed to cover 10% of the total liability under the Policy.

8. Accordingly, PICC agreed to provide 10% of the total cover at the agreed value of nine aircraft for all risks and war risk losses.

9. At the time of the Russian invasion of Ukraine on 24 February 2022, all nine aircraft were leased to various Russian airlines. Following the invasion, the plaintiffs made attempts to repossess and recover the aircraft. In their amended Statement of Claim, they plead that they have been unable to do so and that they had suffered the loss of each of the aircraft by on or about 8 March 2022.

10. On 18 July 2022, the plaintiffs made a claim against their insurers for the loss of all nine aircraft.

11. The plaintiffs issued the within proceedings on 15 November 2022. PICC was joined to the proceedings on 27 February 2023. Solicitors entered an appearance for PICC in its capacity as ‘all risks’ insurer on 23 March 2023. However, the solicitors applied to come off record on 28 July 2023.

12. On or about 19 September 2023, the plaintiffs entered a settlement agreement in respect of four of the aircraft with a total agreed value of USD$251,350,000. The plaintiffs received payments totalling USD$194,082,419.82 on foot of this settlement. The plaintiffs claim that PICC remain liable for 10% of the difference between the sum received and the agreed value of those four aircraft, i.e. USD$5,726,758.02.

13. On 8 December 2023, the plaintiffs entered a further settlement agreement in respect of one additional aircraft with an agreed value of USD$22,476,097.06. The plaintiffs received USD$20,329,023.69 on foot of this settlement and claim that PICC remains liable for 10% of the balance remaining, i.e. USD$212,707.34.

14. On 19 June 2025, the plaintiffs reached a settlement in respect of a single aircraft with an agreed value of USD$40,911,990.06 pursuant to which they received a payment totalling USD$29,383,026.50. They claim that PICC is liable for 10% of the difference between the agreed value of that aircraft and the sum received, i.e. USD$1,152,896.36.

15. On 1 July 2025, the plaintiffs reached a settlement in respect of one more aircraft with an agreed value of USD$19,772,191.64 pursuant to which they received a payment totalling USD$11,093,130.23. They claim that PICC is liable for 10% of the difference, i.e. USD$867,906.14.

16. No settlement has been agreed in respect of two of the aircraft, with agreed values totalling USD$106,693,333.42. The plaintiffs claim that PICC is liable for 10% of that total, US$10,669,333.34.

17. In respect of each of the sums received in settlement, Ms Raimondi explained that the plaintiffs allowed PICC the benefit of currency fluctuations which resulted in the sums paid to the plaintiffs when converted to US dollars marginally exceeding the settlement amounts, thus reducing PICC’s liability.

18. The total claimed is, accordingly USD$18,631,601.20.

19. In addition to claiming that sum, the plaintiffs claim damages for delay in payment.

They have provided a calculation of that claim, the basis of which is explained by Ms Raimondi in her evidence.

20. The delay damage is calculated by reference to the Weighted Average Cost of Capital (WACC). Ms Raimondi’s evidence is that the WACC is the minimum return a company must achieve to satisfy its providers of capital. It was confirmed in evidence that the plaintiffs are required to fund the cost of capital. Ms Raimondi gave evidence that the WACC is used across the industry to calculate the cost of capital. She says that the rate is a formally approved and audited benchmark. The WACC is confirmed by the first plaintiff’s auditor, EY, and approved by the first plaintiff’s board semi annually. She says that it is also used in the plaintiffs’ corporate pricing model and for internal management analysis.

21. The plaintiffs carried out a calculation, applying the relevant WACC to the sum then outstanding each time the WACC changed, commencing on 1 September 2022. The WACC over the period from 1 September 2022 to 23 October 2025 averaged 6.02%. The total sum claimed in damages for delay in providing cover is calculated at USD$5,878,835.

Arguments

22. As the plaintiffs note, as this application merely concerns the assessment of damages, the court need not concern itself unduly with PICC’s liability under the Policy, and the complex issues concerning liability under ‘all risks’ and ‘war risks’ policies which have been the subject of other litigation. The plaintiffs observe, however, that in AerCap Ireland Ltd v AIG Europe SA and Ors [2025] EWHC 1430 (Comm), the High Court of England and Wales (Butcher J) “broadly [found] in favour of the case pleaded by the plaintiffs in this case.”

23. Three issues do arise for consideration. The first two concern the calculation of damages for loss of the aircraft, being the extent of PICC’s share of the overall liability, and whether liability should be calculated on the basis of agreed values. The third concerns the availability of damages for delay.

24. In respect of the first issue, the plaintiffs say that the evidence provided by the slips establish that PICC’s share of liability is for 10% of the plaintiffs’ overall loss, and that PICC has been given full credit in respect of the various settlements which the plaintiffs have achieved in respect of seven of the nine aircraft.

25. They also argue that where insurance coverage is provided on the basis of agreed values and there has been a total loss, those agreed values should be used in assessing liability. They quote Margo on Aviation Insurance, 4th ed., 2014:

“In the case of an ‘agreed value’ policy, the insurers are obliged to pay to the insured the value agreed in the event of a total loss regardless of whether this exceeds the market value of the aircraft at the date of the loss…. An agreed value fixes the value of the subject matter insured as between the insured and insurer in the case of total losses, but not in respect of partial losses.”

26. In AerCap, Butcher J noted that it was not in dispute that in principle the insured should recover the agreed value of the aircraft if liability was established (which it was in that case).

27. As regards damages for delay in payment, the plaintiffs claim that they should be entitled to recover for the loss in not receiving the insurance monies when they fell due. They reference the decision in Reaney and Ors v Interlink Ireland Limited [2022] 1 IR 213, [2018] IESC 13, a case which concerned the awarding of interest rather than a claim for damages. However, it highlights some factors on which the plaintiffs rely.

28. The Supreme Court (O’Donnell J, as he then was) identified why interest might be awarded on a judgment (at p. 224):

“[12] It is rudimentary economic theory that money has a time value. The person who has a sum of money over a period can obtain a benefit either in interest on that sum if invested, (or other return on investment) or interest avoided because that sum does not have to be borrowed. By the same token a person who has not received money incurs a cost, in particular if they have had to borrow.”

29. Recognition of this fact led, as the Court observed, to the introduction of section 22 of the Courts Act 1981 which fixed a statutory interest rate which may be awarded to a successful litigant.

30. The position differs from that in the UK, as the Court noted (at p. 225-226):

“[13] In the United Kingdom, a similar provision had been part of the statute law since s.3 of the Law Reform (Miscellaneous Provisions) Act 1934, which was significantly amended by s.22 of the Administration of Justice Act 1969. However s.22 of the Irish Act did not simply reproduce the provisions of the UK legislation. First the UK legislation allowed the court to determine the appropriate rate of interest… One other important distinction with the regime in the United Kingdom is that interest is fixed by statutory instrument in Ireland, whereas in the United Kingdom the interest rate can be fixed by the court, which leaves a certain flexibility in the award of interest which is not possible in Ireland, although the court in Ireland is at large as to the period in respect of which it can award interest.

[14] The differences between the UK regime, and that established under the 1981 Act, and the fact that the statute has excited little comment or attention, illustrate the fact perhaps, that the award of interest has always been treated in a largely discretionary manner by trial courts, and the exercise of that discretion has rarely been interfered with at appellate level. One feature which has contributed to that ad hoc approach is the essential crudeness of the calculation permitted under s22. Whether an award of interest compensates a plaintiff for loss may depend upon the financial circumstances of the plaintiff, whether money was borrowed and if so at what rates.

Even then the fact that the interest rate is fixed by statutory instrument, and the interest is simple rather than compounded, and the fact that a court can fix the period (but not the rate) of the interest all suggests that the assessment of interest is not a precise science, and there is an element of guesswork as to whether the award of interest over or under compensates the success of a plaintiff, or instead approximates to fair compensation…”

31. The Court commented on those circumstances in which interest might routinely be awarded (at p. 228):

“[18] … A judge may have a very good sense of the manner in which the case has proceeded, how diligently it has been prosecuted, and indeed the extent to which the case can be said to be one which is clear cut. To the extent that any claim can be said to approximate to a claim for a price paid or a debt due, then interest might relatively routinely be awarded.”

32. The plaintiffs argue that interest at the current Courts Act rate, 2% is not adequate compensation in this case, and seek, therefore an award of damages which reflects their actual loss. They say, by reference to Reaney, that this is a clear cut case which has been diligently prosecuted.

33. The plaintiffs also rely on the second judgment in AerCap Ltd v AIG Europe SA and Ors [2025] EWHC 2529 (Comm), which concerned the calculation of damages.

34. In that case, AerCap claimed that interest should be chargeable under the applicable statutory regime from the date of loss, which the court had calculated as 10 March 2022, or in the alternative, the date of claim, 29 April 2022. The court considered that the insurer should have had some time to consider its position (at [13]):

“I do not, however, accept that it is appropriate simply to take the date of 29 April 2022 the start date for interest. As recognised in paragraph 8 of Quorum v Schramm (No. 2), the court usually exercises its discretion to allow insurers some time to consider their position after a loss. That should not in the present case, in my view, be a very extensive time. Given the nature of the insurance and the circumstances of the loss the insured could reasonably expect promptitude from insurers. In my judgment, therefore, it is appropriate to take the date of 9 June 2022 as the start date for the running of interest. That is a date which both gave the OP insurance some time to respond, and LP insurers a fair time since the emergence of the loss to have considered their position.”

35. The court rejected the argument that there should be no pre-judgment interest (at [14]):

“I reject War Risks Insurers’ contention that there should be no pre-judgment interest. I consider that War Risks Insurers have deprived AerCap of the use of its money on the simple basis that, since 9 June 2022, AerCap has been claiming in its action as against the

War Risks Insurers the sums for which War Risks Insurers have been found liable. War Risks Insurers have failed to pay them, and have denied that they were liable to pay them.”

36. The court was also required to calculate the applicable interest rate, per the UK statutory scheme. The plaintiffs observe that the rate awarded, 8.25%, is significantly higher than the rate relied on by them in calculating damages.

Discussion

37. Judgment having been granted in default of appearance, the liability of PICC is not in issue. I am satisfied from the documentation provided by the plaintiffs that PICC had agreed to provide cover for 10% of the total losses. I am also satisfied that the insurers agreed to provide cover on the basis of agreed values, which values are set out in the schedule sent by the plaintiffs’ broker on 17 May 2021.

38. Clearly PICC should be given credit for the monies received by the plaintiffs on foot of the various settlements described in evidence. I am satisfied that the plaintiffs have calculated PICC’s liability by reference to the agreed values, giving full credit for all monies received.

39. On that basis, therefore, I propose to grant the plaintiffs judgment in the sum of USD$18,631,601.20 for breach of contract.

40. I am also satisfied that this is a case in which it is appropriate to compensate the plaintiffs for the losses which they have suffered on account of the delay in recovery. I note that in AerCap, Butcher J considered it appropriate to grant pre-judgment interest, notwithstanding that the case has been fully contested in a lengthy trial. Here, PICC has not even entered an appearance to the claim. I accept that at an early point in the proceedings, PICC did have solicitors on record in respect of the ‘all risks’ cover, but those solicitors came off record on or about 28 July 2023. I was also advised, quite properly, that there were without prejudice discussions between the plaintiffs and PICC, the details of which were not disclosed. It remains the case that PICC did not contest its liability in these proceedings and it must follow that by failing to provide cover following the plaintiffs’ claim, they must be regarded as having deprived the plaintiffs of funds to which they were entitled for a period of more than three years.

41. This would clearly, therefore, be an appropriate case in which to award pre-judgment interest. However, the plaintiffs have established that their loss exceeds what would be recovered in Courts Act interest. They have at all times claimed damages for the delay in payment to them and they have not identified to me any reason in principle that they should not be awarded damages which covers their loss rather than being confined to Courts Act interest. PICC has not appeared in the proceedings and has, accordingly, not advanced any defence to this claim. The plaintiffs have calculated damages from a date a number of weeks after they submitted their claim, reflecting the approach of the court in AerCap. In all the circumstances, therefore, I consider it appropriate to award the plaintiffs damages for delay in providing an indemnity or cover in the sum of USD$5,878,835.

Conclusion

42. I will enter judgment against PICC in favour of the plaintiffs in the sum of USD24,510,436.20. I am of the provisional view that the plaintiffs, having succeeded entirely in their claim against PICC should be entitled to recover from PICC the reasonable costs of the proceedings occasioned by its claim against PICC. Should either party wish to contend for a different form of costs order, they should deliver short submissions (not exceeding 1500 words) setting out their reasons within two weeks of the date of this judgment. The other party will then be given a further two weeks to respond, and I will issue a ruling thereafter. If neither party delivers a submission within two weeks, the order will be finalised on the basis set out in this judgment.