Judges rule that insurance companies must reimburse IRS airlines for losses.

A Lagos High Court has ruled in favor of IRS Airlines Limited, ordering Standard Alliance Insurance Plc and 17 other Nigerian insurance companies, as well as a foreign reinsurer, to compensate the airline for the total loss of its Fokker 100 aircraft, which occurred on May 10, 2014, in Niger Republic.

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The court, in a judgment delivered by Justice K. Jose, found that the insurers had wrongly denied the airline's insurance claim stemming from the incident, and that their defense relied heavily on undisclosed reinsurance terms not included in the original policy agreement.

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The judge deemed several aspects of the insurers' defense invalid, specifically their reliance on these undisclosed terms, and also faulted them for violating provisions of the Insurance Act 2004 by improperly relying on foreign loss adjustment arrangements not transparently disclosed to IRS Airlines.

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Managing Director of IRS Airlines Limited, Yemi Dada, welcomed the judgment, stating that it upheld the airline's rights and confirmed its compliance with all policy obligations, including full premium payments and prompt notification of the incident.

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The court awarded damages in the amount of the insured sums, totaling millions of dollars or their naira equivalent, plus interest from 2014, according to Dada, who noted that the judgment vindicated the airline's position that it had fulfilled all contractual obligations.

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Dada added that the ruling brings long-awaited relief after years of financial strain caused by the unresolved claim, which had contributed to significant debt owed to the Asset Management Corporation of Nigeria, AMCON.

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The judgment, Dada said, provides much-needed relief after years of financial strain, including significant debt to AMCON arising from the unpaid insurance proceeds, and reaffirms the rule of law in insurance contracts, protecting policyholders from unfair denials based on hidden foreign arrangements.