SINGAPORE — Aircraft lessor BOC Aviation has been awarded over $400 million in damages against Russian cargo carriers AirBridgeCargo and Volga-Dnepr due to defaults associated with three leased Boeing 747-8Fs.

This issue arose following Russia's invasion of Ukraine in February of the previous year, which led to international sanctions on Russian carriers and lessors attempting to reclaim their aircraft.

AirBridgeCargo had been operating three 747-8Fs with serial numbers 60117, 60118, and 60119, which were acquired by BOC Aviation in 2017. The third aircraft was initially leased to affiliated operator CargoLogicAir when BOC assumed ownership, and later transferred to AirBridgeCargo in 2020.

Due to the conflict in Ukraine, the European Union banned insurance and reinsurance for aircraft used by Russian carriers. Upon learning of the reinsurance cancellation for the 747-8Fs, BOC informed AirBridgeCargo that they could no longer operate the aircraft in Russia as the reinsurance situation violated the lease agreement terms.

On March 5th of the previous year, when all three aircraft were located outside Russia—in Shanghai, Hong Kong, and Zhengzhou—BOC issued a grounding notice to the carrier.

However, according to a US Southern District of New York court document, AirBridgeCargo flew two of the aircraft, 60117 and 60119, from China to Russia the following day.

BOC subsequently issued default notices for all three aircraft and demanded their return, but has only managed to retrieve 60118 from Hong Kong, which was transported to Arizona on March 25, 2022. Only two of the aircraft's four General Electric GEnx engines belonged to BOC Aviation, with the remaining two still in Russia.

On April 3rd of this year, the court held a one-day bench trial, during which the defendants, AirBridgeCargo and Volga-Dnepr Logistics, provided no witnesses.

The case's damage claims largely centered on the existence of an 'event of default' and an 'event of loss.' The court ruled that an 'event of default' was "undisputed" under the lease agreements for each aircraft and that 'events of loss' had also occurred.

The court agreed with BOC that the defendants could have foreseen the situation, dismissed their 'impossibility' defense, and ruled that they did not demonstrate that the lessor failed to mitigate damages.

As a result, the court awarded damages totaling $406 million, including around $176 million for aircraft 60117, nearly $180 million for aircraft 60119, and over $50 million for the recovered aircraft 60118.