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NEW YORK (Reuters) – A U.S. judge on Tuesday ordered Russia’s largest cargo airline to pay aircraft lessor BOC Aviation Ltd $406.2 million after being declared in default on leases for three Boeing (NYSE:BA) 747-8F planes following Russia’s invasion of Ukraine.
U.S. District Judge Lewis Liman in Manhattan found the defendant AirBridgeCargo Airlines LLC and its parent Volga-Dnepr Logistics BV liable, after the invasion and resulting sanctions left the plaintiff BOC Aviation unable to reclaim the aircraft.
Lawyers for the defendants did not immediately respond to requests for comment. A lawyer for Singapore-based BOC Aviation had no immediate comment, having yet to hear from his client.
Aircraft lessors have sued dozens of insurers and lessees for billions of dollars over hundreds of aircraft stuck in Russia since the February 2022 invasion of Ukraine.
BOC Aviation said AirBridgeCargo went into default after being unable to maintain required reinsurance coverage.
This followed restrictions imposed by the European Union against Russian carriers on aircraft used in Russia, and Russian sanctions on foreign assets, including internationally-leased aircraft.
BOC Aviation said it was able to recover one leased plane and two of its four engines, while the two other planes and two other engines remained in Russia.
The lessor’s majority shareholder is Bank of China Ltd.
In a 57-page decision, Liman said BOC Aviation had proven that the Russian government had “effected a seizure” of the planes and engines by keeping them from being used outside Russia, “save perhaps to areas in Ukraine or for the purposes of the war.”
The judge said that undermined BOC Aviation’s right to reclaim possession.
He also rejected AirBridgeCargo’s defenses that neither side could have foreseen a default, and it was impossible to ground the planes outside Russia because the country had ordered them flown back.
Liman ruled after a one-day nonjury trial held on April 3.
The case is BOC Aviation Ltd v AirBridgeCargo Airlines LLC et al, U.S. District Court, Southern District of New York, No. 22-02070.
