Chubb wins first round in aircraft seizure dispute with Carlyle
A Miami-Dade County court has refused to dismiss Chubb European Group’s attempt to assert salvage and subrogation rights over 23 aircraft stranded in Russia.
The dispute stems from aircraft seized by the Russian government following its invasion of Ukraine and goes to the heart of what rights insurers can claim, and how far they can go to recoup losses, once large war and confiscation claims have been paid.
Carlyle Aviation Partners LLC filed a war risk claim with Chubb and other insurers after 23 leased aircraft were effectively expropriated by Russia. Following years of denial and litigation, the Miami court found the insurers liable for Carlyle’s losses under a policy section covering war, confiscation and “other perils.”
Chubb subsequently paid $68.02 million, representing 8.25% of Carlyle’s total war risk coverage.
After that judgment was handed down, Chubb filed a counterclaim arguing that, by paying the claim, it acquired property rights in the aircraft, including salvage and subrogation rights. The insurer relied on policy language that allows it to take covered aircraft as salvage where a claim is settled as a “total loss, constructive total loss or arranged total loss.”
Carlyle countered that the salvage provision applies only to claims arising under a specific section of the contract and only where the claim is settled on the agreed “total loss” basis under that clause. The lessor said Chubb’s liability, as determined by the court, stemmed from a different section of the policy, so the salvage wording was never triggered.
In seeking dismissal, Carlyle argued that Chubb had no contractual basis to assert salvage or subrogation rights and that its pleadings failed to state a viable claim.
Chubb responded that Carlyle’s motion was effectively an attack on the merits, not the legal sufficiency, of its allegations. The insurer said that, at this stage, the question for the court was simply whether the counterclaim set out a plausible breach of contract theory, not whether Chubb would ultimately succeed.
Chubb maintained that there is a genuine dispute over the scope of its salvage and subrogation rights under the policy, that it has adequately pleaded the elements of its claim, and that it has articulated a viable breach of contract cause of action.
The court agreed that the dispute should be heard on its merits and denied Carlyle’s motion to dismiss in an order signed March 2. Carlyle has 20 days from that date to respond to Chubb’s counterclaim.
The case is one of several major disputes linked to aircraft stranded or seized in Russia at the start of the war in Ukraine, but it stands out because an insurer is now actively seeking to establish its salvage and subrogation position in court after paying out under a war and confiscation clause.
The outcome could affect how war risk and confiscation clauses are drafted and interpreted, particularly around “total loss” language. It may also influence the extent to which insurers can assert proprietary rights in assets that remain physically detained or expropriated, and how carriers structure recovery and salvage strategies after large war-related losses.
Other disputes have already resulted in substantial recoveries for lessors, including AerCap Holdings, which earlier this year reported recovering about $1.5 billion in insurance and other payments linked to aircraft in Russia. Against that backdrop, the Chubb–Carlyle litigation is being closely watched as a potential test of how far insurers’ salvage and subrogation rights can extend in the current sanctions and expropriation environment.
