BRITISH COURT AFFIRMS REINSURANCE ARBITRATION AWARD ON NUMBER OF OCCURENCES IN 9/11 ATTACKS
Plaintiff cedent and defendant reinsurers were parties to certain reinsurance treaties providing cover for aviation-related risks, with threshold triggers of $200 million and $500 million, respectively. A coverage dispute arose regarding whether the terrorist attacks in New York City on September 11, 2011 constituted one, or two separate occurrences, as the term was defined in the underlying policies. Defendants contended there were two occurrences, and thus twice as much of the $1.2 billion in underlying settlements should be borne by the cedent. The parties submitted the dispute to arbitration, and a three-judge panel held that there were two occurrences, based on particular factual details unique to the September 11 attacks. Citing the applicable standards for overturning arbitration awards, the UK’s High Court of Justice affirmed the award, concluding that the tribunal “accurately identified the applicable law pursuant to which they undertook an exercise of judgement. The decision they came to was one which was open to them to reach and in making it they: (i) correctly applied the law; (ii) had regard to all materially relevant matters; and (iii) did not take into account impermissible considerations.” Aioi Nissay Dowa Insurance Co. Ltd v. Heraldglen Ltd, [2013] EWHC 154 (Comm) (High Court of Justice, Queen’s Bench, Comm. Div. Feb. 8, 2013).
This post written by John Pitblado.
