The Court of Appeal has rejected 33 appeals by insurers against an order requiring them to disclose documents about proposed or actual notices changing geographic limits on war-risk insurance for aircraft leased to Russian airlines.
In a judgment delivered on 9 November 2023, Ms Justice Costello said the documents could help the aircraft lessors investigate what was happening in Russia and assess the insurers’ arguments about when insured risks arose. The appeals concerned six related groups of cases, managed together in the High Court Commercial List.
The lessors allege that aircraft and related assets they had leased to Russian airlines were not returned after Russia’s invasion of Ukraine in February 2022. They seek insurance cover for their losses. The insurers dispute liability and argue, among other things, that war-risk cover for Russia had ended after notices were served in early March 2022.
The lessors contend that insured risks had already begun, or had taken hold of the aircraft, before those notices took effect. The insurers dispute that position. The Court of Appeal did not decide whether the aircraft were lost, whether an insured peril had occurred, or whether the notices validly excluded cover.
The disputed discovery category covered documents from 1 February to 31 March 2022 evidencing discussion or consideration of proposed or actual cancellation notices concerning Russia, Ukraine, Crimea and/or Belarus. The High Court had ordered discovery of those documents. The insurers appealed, arguing that their internal views could not establish the objective facts relevant to whether an insured peril had occurred.
The Court of Appeal held that the lessors had also relied on a separate ground: documents about the notices could contain information about events and responses in Russia, assisting their inquiries into when a peril arose and potentially challenging the insurers’ case. That made the category relevant under the established discovery test. The court said this argument had been raised in the High Court and, even if treated as new, could be heard on appeal without new evidence or identified prejudice to the insurers.
The court said discovery was necessary because the lessors would otherwise lack access to the documents, and the order was not shown to be unduly burdensome. It rejected the insurers’ arguments that the High Court had reversed the burden of proof, misapplied discovery principles, or allowed impermissible “fishing.”
The appeals were refused. The court’s preliminary view was that the lessors should receive the appeal costs, but gave the insurers ten days to seek a short hearing on costs. The insurers were ordered, in accordance with the High Court order, to make discovery within 21 days of the judgment.