The Gap Between Treaty and Practice: Four Aviation Law Lessons from CALAF/4 — and What Ukraine Adds to the Debate

Contents

• 1. The Montreal Convention: Uniformity as an Aspiration
• 2. The Cape Town Convention: When Ratification Is Not Enough
• 3. Aviation Insurance: When the Market Miscalculates
• 4. Cyber Risks: The Treaty Framework Has Not Caught Up
• 5. Ukraine as a Living Laboratory
• 6. FAQ

~ 20 min read

Four Aviation Law Lessons from CALAF/4 — and What Ukraine Adds to the Debate

The panel 2 Emerging Litigation Trends in Aviation and Impacts on International Air Law Treaties that took place at 4th ICAO Civil Aviation Legal Advisers Forum (CALAF/4), held in Nassau, Bahamas from 27 to 29 May 2026, brought together over 300 aviation law practitioners, regulators, academics, and industry representatives to examine the legal and regulatory challenges shaping the future of air transport. The forum covered four interconnected themes: the Montreal Convention 1999 and its judicial application, the Cape Town Convention and its implementation challenges, the insurance crisis triggered by the Russian lessor litigation, and the growing threat of cyber risks to aviation operations.

I was unable to attend in person — travelling from Kyiv under current wartime conditions remains difficult. I followed the sessions remotely, and what I heard confirmed something I had suspected for some time: Ukraine is not a peripheral case study for these debates. It is a jurisdiction where all four themes converge simultaneously, in real time, at scale.

This article draws on the CALAF/4 discussions, with gratitude to ICAO, the session moderators, and the panellists for making the sessions publicly accessible. It adds a Ukrainian law dimension that was largely absent from the Nassau debate — not because practitioners were uninterested, but because, as became clear during the sessions, the gap between treaty ratification and practical enforceability is widest precisely in jurisdictions like Ukraine, where the legal framework is undergoing structural change under extraordinary pressure.

The panel on emerging litigation trends — moderated by Professor George Leloudas of the Institute of International Shipping and Trade Law, Swansea University, and featuring Robert Lawson KC, Anita Quy, Ricardo Martinez-Cid of Podhurst Orseck, P.A., Juan Carlos Mencio of LATAM Airlines, and Llewellyn Boyer-Cartwright — provided a remarkably candid account of where international aviation law is working, where it is failing, and where it needs to go. What follows reflects those discussions, enriched by the Ukrainian practitioner’s perspective.

The Montreal Convention 1999, with 143 contracting states, is one of the most widely ratified international instruments in aviation. The panel’s opening discussion — a structured debate between plaintiff lawyer Ricardo Martinez-Cid and defence counsel Robert Lawson KC — revealed that ratification statistics conceal a more complicated reality.

The Uniformity Debate

Robert Lawson KC framed the core problem with characteristic directness: true international uniformity requires not only that the same law apply in every state, but also that it be interpreted in the same way. In his assessment, the European Court of Justice has consistently undermined this goal. He cited the ECJ’s approach to the definition of “accident” under Article 17 — where a widely followed decision of the US Supreme Court has been effectively ignored — and the recovery of mental injury, where the ECJ concluded that only bodily injury is recoverable under the convention as written, before reversing course.

Ricardo Martinez-Cid offered the plaintiff’s counterpoint: the goals of the Montreal Convention, as stated in its preamble, were consumer protection, equitable compensation, and an equitable balance — not the interests of carriers. In his view, what courts are “wrestling with” is not a problem of interpretation but a systemic failure: the convention’s exclusivity clause under Article 29 has been interpreted so narrowly that it now grants immunity to airlines for claims that were never intended to fall outside its scope. His proposed solution — making the convention opt-in for exclusivity purposes, so that a carrier cannot use the convention both as a shield and a sword — was predictably contested by the defence side of the panel.

Anita Quy, defending from the Singapore perspective, drew a distinction between the few ECJ decisions that have departed from international consensus and the large body of consistent application across common-law jurisdictions. She noted the practical consequences of the plaintiff approach: in jurisdictions where the convention is interpreted without the balance it was designed to provide, the results are severe. Juan Carlos Mencio described the LATAM experience in Brazil, where airlines receive between 5,000 and 10,000 civil actions per week — a caseload that has materially increased passenger prices and created structural barriers to market entry for low-cost carriers.

Judiciary Education: The LATAM Model

The most practically significant contribution of the Montreal discussion was Juan Carlos Mencio’s account of LATAM’s judiciary education initiative. Working with ICAO representatives and academic experts, LATAM has been conducting seminars for Brazilian judges on the Montreal Convention — how it was drafted, what it was intended to achieve, and how its provisions interact with domestic civil law. The results, in his account, have been measurable: judges who engaged with the materials began to distinguish between applying the convention correctly and ruling against consumers.

Robert Lawson KC’s closing observation on this point was precise: the question is not whether the convention is perfect but whether we can get the existing framework working on a truly universal basis. The Beijing Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation, he noted, was a well-designed instrument that has never come into force because states would not ratify it. The lesson: incremental improvement of what exists is more achievable than replacement.

The Cape Town Convention on International Interests in Mobile Equipment and its Aircraft Protocol, which entered into force in 2006, was designed to give creditors — primarily aircraft lessors — reliable, enforceable rights across jurisdictions. The CALAF/4 discussion, led by Juan Carlos Mencio and Llewellyn Boyer-Cartwright, illustrated the distance between that design and operational reality.

The Implementation Gap: Brazil and the SAS Precedent

Juan Carlos Mencio described two Brazilian cases that illustrated the judiciary’s instinct to override the convention when its application would accelerate the visible failure of an airline. In the Avianca Brazil bankruptcy, the notice period under the convention expired in December 2018, but the lessor did not recover the aircraft until April or May 2019 — because the presiding judge declined to apply the convention in a way that would accelerate the airline’s collapse. In the more recent Bobas bankruptcy, a similar pattern began to emerge but was corrected within 30 to 60 days by an appellate court decision.

The SAS bankruptcy in Sweden provided a different type of precedent. Sweden had ratified the convention but had not opted into Alternative A of the Aircraft Protocol — the provision that requires operators to cure a default or return the asset within a defined notice period. When SAS filed for bankruptcy protection, the court held that the convention did not apply in its most protective form because of Sweden’s failure to make the relevant declaration. The lesson, as Mencio observed, is that ratification without careful attention to the choices of declaration leaves the convention’s most commercially significant provisions unavailable.

Engine Accession Risk: The Invisible Gap

One area that received less attention at CALAF/4 but is directly relevant to practitioners advising on aircraft transactions in Ukraine is engine accession risk — the question of whether title to an aircraft engine passes to the airframe owner on installation, displacing the engine owner’s or financier’s rights.

The Cape Town Convention provides that an aircraft engine retains its separate legal identity and ownership notwithstanding installation on or removal from an airframe. As a matter of substantive law, ratification of the Convention should therefore eliminate the risk of accession in any contracting state.

Ukraine ratified the convention and its Aircraft Protocol, and has opted into Alternative A. As a matter of law, engine accession risk should not exist in Ukrainian transactions. In practice, however, the position is more qualified. Ukraine does not maintain a separate engine registry or any official system for recording engine ownership or installation. The State Aviation Administration does not require operators to file or maintain official records identifying installed engines by serial number. Lease agreements may be submitted to the SAAU, but they are not independently registered or verified.

The consequence is not that the convention fails to apply — it does apply, and ownership is protected as a matter of law. The consequence is evidentiary: in a dispute about which engine was installed on which airframe at a given time, there may be insufficient official or third-party evidence to establish the relevant facts conclusively. The gap is not doctrinal but practical, and it is the type of gap that becomes visible only when enforcement is attempted.

Bankruptcy Untested: Ukraine’s Exposure

Although Ukraine opted into Alternative A of the Cape Town Convention, it has never had a contested aviation insolvency proceeding in which a Ukrainian court applied the convention’s provisions. There is no judicial precedent establishing how Ukrainian courts will interpret the notice-period requirements, how they will balance the convention’s obligations against domestic insolvency law, or whether they will follow the example of Brazilian appellate courts in correcting lower-court departures from the convention.

This uncertainty is not a criticism of Ukrainian law. It is a structural feature of any jurisdiction in which the convention is new, and the relevant economic activity has been interrupted before the legal framework is tested. For international lessors and lenders considering re-entry into the Ukrainian market, the first contested insolvency case will be formative. Its outcome will establish expectations — positive or negative — that will influence transaction structuring and pricing for years to come.

The insurance discussion at CALAF/4 centred on what Robert Lawson KC described as the Russian lessor litigation — a series of proceedings around the world arising from Russia’s decision, following its invasion of Ukraine in February 2022, to prevent the return of over 500 foreign-owned aircraft held by Russian operators.

The Litigation and Its Legal Novelties

The basic facts are well known. Western lessors, required by sanctions to terminate their lease agreements with Russian operators, sought the return of their aircraft. Russia prevented their repossession. The aircraft have remained in Russia. The total value at stake is measured in billions of dollars.

The insurance question was more complex. The lessors held two types of coverage: operator policies, under which they were named as additional insureds, and contingent and possessed all-risks policies, designed to respond when recovery under the operator policy was unavailable. Both types of policy carried war risk endorsements. The standard war risk clause covers confiscation, nationalization, seizure, restraint, detention, or appropriation by a government or public authority.

Ricardo Martinez-Cid, who has represented lessors in the litigation, was direct about what happened: the contingent war risk insurers had charged premiums that did not reflect the risk. When the losses materialized, they engaged what he described as a policy of delay — contesting coverage on grounds that, in his assessment, were always legally untenable. The courts have been agreeing: decisions are being handed down confirming that these were covered claims, and insurers are paying substantial prejudgment interest in addition to the principal amounts.

Anita Quy’s contribution focused on the legal novelties that emerged from the English court proceedings. The judge’s analysis of the contingent and possessed liability policies drew on marine insurance analogies in ways that aviation practitioners had not anticipated. The “grip of the peril” doctrine — developed in marine insurance to address situations where a vessel is already caught in a peril at the time of a cancellation notice — was applied to determine that war risk cancellation notices served after the invasion were ineffective because the aircraft were already in the grip of the peril at that point. The application of a balance-of-probabilities test to the question of constructive total loss, rather than the constructive total loss doctrine as understood in marine insurance, was another departure from expected outcomes.

Ukraine as Context, Not Location

It is important to be precise about Ukraine’s role in the insurance crisis. The detained aircraft are in Russia, not Ukraine. The litigation is proceeding in London, Ireland, the United States, and other jurisdictions where lessors can access courts. Ukraine is the reason for the crisis — Russia’s invasion triggered the sanctions that triggered the terminations that triggered the repossession attempts — but it is not the jurisdiction where the insurance dispute is being resolved.

A distinct category of grounded aircraft deserves separate attention: those belonging to Ukrainian operators that remained in Ukraine following the airspace closure in February 2022. Unlike the Russian detention cases, these aircraft were not seized — they were grounded by the operational impossibility of flight. The insurance treatment of prolonged ground storage, maintenance deterioration, and the interaction between war risk coverage and the physical condition of aircraft that have stood idle for years has not, to this author’s knowledge, been the subject of reported litigation. It may become so.

What Ukraine inherits from this episode is a transformed insurance market. The premiums for war risk aviation coverage have risen materially. The underwriting standards and policy wordings for contingent coverage are being revised. The expectations of lessors about what insurance must cover before they commit aircraft to high-risk environments have increased.

For Ukraine’s aviation restart, this transformed market is the operating environment. The insurance model that worked before 2022 — standard hull and liability coverage with war risk endorsements at pre-invasion premiums — is no longer available. What will be required instead is a layered structure that combines state participation, pooled reinsurance, and explicit risk allocation across operators, airports, lessors, and air navigation service providers.

The Maritime Model and Its Aviation Application

The CALAF/4 discussion did not address Ukraine’s aviation insurance challenge directly. But the marine insurance analogies that featured in the litigation discussion point toward a solution that we at JVS.LAW had identified before the CALAF/4 sessions took place.

In our 2025 article “Restarting Flights: Ukraine’s Aviation Insurance Facility”, we argued that the maritime insurance mechanism developed for the Black Sea grain corridor — the Unity Facility, which combines a Ukrainian state backstop with Lloyd’s underwriting capacity — represented the closest available template for aviation war-risk insurance. The CALAF/4 litigation discussion confirmed the structural logic of that argument: war risk in aviation, like war risk in maritime transport, requires a mechanism that separates the catastrophic layer from the commercial layer and assigns it to a party capable of absorbing it.

Our subsequent article, “Digital Aviation in Wartime: Why Flight Recovery Depends on IT Architecture and Insurance”, further developed the argument: the Unity model’s success in maritime transport depended on the ability to verify risk in real time. For aviation, that verification requires digital infrastructure — immutable audit trails, source code escrow for critical airport systems, and IT contracts structured to satisfy underwriting requirements.

The cyber risks discussion at CALAF/4 was, by the panellists’ own acknowledgment, at the frontier of current aviation law. The legal framework has not kept pace with the threat, and the regulatory responses that exist are fragmented across jurisdictions, creating their own compliance burdens.

The Scale of the Threat

Juan Carlos Mencio’s account of the LATAM experience was striking in its specificity. Serious cyberattack attempts on LATAM’s systems increased from approximately 500 per week in late 2025 to 1,300 per week by mid-2026. The threat is not confined to data breaches: a successful attack could paralyse an airline’s operational systems and ground its fleet. LATAM has responded by treating cyber attacks as it treats aircraft accidents — with simulation exercises, emergency committee activations, and third-party specialist involvement — but the legal dimension presents a distinct challenge.

The regulatory response has been inconsistent. Chile, the most demanding jurisdiction in LATAM’s experience, requires notification of a cyber incident within three hours of detection. In practice, three hours is rarely sufficient to determine whether an event constitutes a reportable incident, let alone to assess the nature or extent of data affected. The result is over-reporting of partial and uncertain information to regulators — a compliance burden that does not obviously improve outcomes.

The Liability Framework: Where the Montreal Convention Helps

Robert Lawson KC offered an observation that received general agreement from the panel: the Montreal Convention is, paradoxically, well-suited to cyber incidents that result in aircraft loss or passenger injury. If a cyber attack causes an aircraft accident, the convention’s liability framework applies in the same way as for any other accident. The challenge is not the Montreal Convention but the coverage gaps that surround it — pure data breach claims, business interruption, reputational damage, and third-party losses that do not arise from physical damage to an aircraft or injury to a passenger.

Anita Quy’s point that data breach has become a “cottage legal industry” in its own right captures the dynamic: there is now a specialised legal practice around these claims, and the aviation sector is a major target because of the volume and sensitivity of passenger data it holds. The legal systems are not particularly quick to adapt, she observed, and aviation practitioners are likely to face novel liability questions for years to come.

Ukraine sits at the intersection of all four challenges discussed at CALAF/4. It has ratified the relevant conventions but has never had them tested in a contested proceeding. It faces the reformed insurance market as the operating environment for its aviation restart, not as a future contingency. Its critical infrastructure operates under sustained cyber attack. Its courts will eventually handle aviation law cases involving international conventions, foreign parties, and factual patterns that the drafters of those conventions did not anticipate.

The practical implication for international practitioners advising clients with Ukrainian exposure is that treaty ratification is a necessary but not sufficient basis for transaction structuring. The evidentiary gaps in engine registration, the absence of Cape Town precedent in Ukrainian courts, the evolving insurance architecture, and the cyber risk profile all require specific legal due diligence that cannot be satisfied by reference to Ukraine’s treaty status alone.

The practical implication for Ukrainian institutions — the State Aviation Administration, the commercial courts, the aviation law community — is that the preparation for aviation restart is also preparation for the first real-world testing of these frameworks. How Ukrainian courts handle the first Cape Town insolvency case, how the insurance market prices the first restart facility, and how the first cyber incident in an operational airport context is documented and reported will establish the expectations and precedents that shape the market for the decade that follows.

CALAF/4 provided, in Professor Leloudas’s phrase, “food for thought.” Ukraine provides a context in which that food is not a future meal but an immediate one.

Does Ukraine’s ratification of the Montreal Convention mean it will be applied consistently with other states?

No. Ratification establishes that the convention is part of domestic law, but interpretation varies across jurisdictions. EU courts have diverged substantially from the consensus in common-law jurisdictions on issues like the definition of “accident” under Article 17 and compensability of non-physical harm. Ukrainian courts, lacking precedent, will need to establish their own jurisprudence. Proactive judge education — along the lines of the LATAM model — can help align Ukrainian interpretation with international consensus.

Ukraine chose Alternative A of the Cape Town Convention. Does that guarantee lessor protection?

Choosing Alternative A obligates operators to cure breaches or return aircraft within specified timeframes. But enforcement depends on Ukrainian courts recognizing that obligation and prioritizing it over pressure to preserve the airline as a going concern. Brazil’s experience shows that courts will sometimes decline to apply the convention if its full effect would accelerate airline collapse. Ukrainian courts, lacking precedent, may face similar pressures. The first insolvency dispute will be formative.

Will war risk insurance be available and affordable for Ukrainian aviation recovery?

War risk insurance exists but at substantially higher premiums than pre-2022. The pre-war model of standard coverage with war risk exclusions at baseline rates is no longer available. Recovery will require a multi-layered structure combining government backing (similar to the Black Sea Grain Corridor model), pooled reinsurance, and clear contractual allocation of residual risk among all participants.

Does the Montreal Convention address cyber attacks on aviation?

The Montreal Convention addresses cyber incidents only if they result in aircraft loss or passenger injury. If a cyber attack causes an aviation accident, the convention’s liability framework applies as it would for any other accident. Cyber incidents resulting in data breach, operational disruption, or reputational harm fall outside the convention and have no agreed international framework.

What is the engine accession risk, and does the Cape Town Convention eliminate it in Ukraine?

Under some legal systems, ownership of an engine may transfer to the fuselage owner when the engine is installed, divesting the engine lessor of property rights. The Cape Town Convention provides that engines retain separate ownership regardless of installation. Ukraine ratified the convention and opted into Alternative A, so accession risk is eliminated as a matter of law. However, Ukraine maintains no separate engine registry, so proving which engine was installed on which airframe at a given time becomes a matter of documentary evidence — a practical gap, not a doctrinal one.

What is the practical significance of the CALAF/4 discussions for practitioners advising on Ukrainian aviation transactions?

Treaty ratification is necessary but not sufficient. Practitioners must conduct specific legal due diligence covering: (1) evidentiary gaps in engine registration under the Cape Town Convention; (2) the absence of judicial precedent for convention enforcement in Ukrainian courts; (3) the transformed aviation insurance market requiring multi-layered war risk structures; and (4) the integration of cyber risk management into IT contracts for airport infrastructure.