Supreme Court judgment on aircraft related Russia sanctions

On 25 March 2026, the Supreme Court handed down its judgment in UniCredit Bank GmbH (London Branch) v Constitution Aircraft Leasing (Ireland) Ltd and UniCredit Bank GmbH (London Branch) v Celestial Aviation Services Ltd [2026] UKSC 10 Read here

In a unanimous decision, the Court dismissed the aircraft lessors’ appeal and allowed UniCredit’s cross‑appeal. The Court held that:

1. The Bank’s payment obligations under the letters of credit were suspended by regulation 28(3)(c) of the Russia (Sanctions) (EU Exit) Regulations 2019, pending the grant of the necessary licences; and
2. Even if regulation 28 had not prohibited payment, section 44 of the Sanctions and Anti‑Money Laundering Act 2018 (SAMLA) would have afforded the Bank a defence to the lessors’ claims for recovery of the debt, interest and associated costs, on the basis that the Bank acted in the reasonable belief that it was complying with sanctions regulations.

Rachel Barnes KC acted for the Bank, with David Quest KC (3 Verulam Buildings) and James Sheehan (Essex Court), instructed by Reynolds Porter Chamberlain.

Genevieve Woods also acted for the Bank in the Commercial Court.

26th March 2026