UK: 9/11 Attack On The World Trade Center: How Many Events?

Last Updated: 22 March 2013
Article by Rebecca Axe and Damian Gold

The decision of Mr Justice Field in Aioi Nissay Dowa Insurance Company Ltd v Heraldglen Ltd & Ano1arose from an appeal against an Award made by a Tribunal comprising Ian Hunter QC, David Peachey and Richard Outhwaite.

One of the questions the Tribunal had to decide was whether the losses sustained by the defendants arising out of the 9/11 attack on the Twin Towers of the World Trade Center (WTC) were caused by one or more occurrences or series of occurrences "arising out of one event". This was in the context of applying policy limits and deductibles in four retrocession excess of loss reinsurances written by the claimant in favour of the defendants. The Tribunal concluded that the losses were caused by two separate occurrences arising out of separate events.

In reaching this decision the Tribunal applied the test of the "unities" (time, place, cause and intention) derived from the Dawson's Field Arbitration and as developed by Mr Justice Rix (as he was then) in Kuwait Airways Corporation v Kuwait Insurance Co SAK2. Only extracts of the Award are referred to in the appeal judgment so it is difficult to understand precisely which arguments were canvassed in front of the Tribunal and also how the Tribunal reached its views regarding the various unities.

In respect of unity of intent, referred to as the circumstances and purposes of the persons responsible, the Tribunal acknowledged that the hijackings were part of a coordinated plot but observed that it was clear from the legal authorities on similar aggregation clauses that a conspiracy or plan could not of itself constitute an occurrence or event. In respect of unity of cause, the Tribunal found there were two separate causes for the insured losses because there were two successful hijackings of two aircraft, despite these being in execution of a single "dastardly plot". In respect of unity of location, it found that while the Twin Towers were part of an overall complex the Towers were separate buildings. In respect of unity of time, it acknowledged the relative closeness in time between the commencement of each flight and the subsequent crashes. However, it was justifiable for the Tribunal to take account of the whole period of time from check-in and passenger scrutiny to the collapse of each of the Towers (not just from the time each flight took off) because it was dealing with airline and/or security company liabilities in respect of the hijacks. Moreover, the timings of the collisions into the Towers were independent of each other.

The appeal by the claimant was on the basis of section 69(1) of the Arbitration Act 1996, that the Tribunal had made an error of law. The claimant ran several different lines of argument, including the following:

1. Instead of confining its analysis to whether the attacks on the WTC constituted one event, the Tribunal "wrongly focussed on, and were wrongly influenced by, their conclusion as to the number of loss events arising out of the hijackings of all four flights on the day in question." Field J rejected this contention, concluding it was clear from the Award that the Tribunal's focus was on the attacks on the Twin Towers and that in referring, in one paragraph of the Award, to the four hijackings it was merely carrying out a "sense check" on the conclusion it had already reached in relation to the Twin Towers.

2. The Tribunal erred when considering the unifying factor of "cause". It was suggested that the Tribunal had enquired generally into the cause of the losses whereas it should have considered the unity of cause in terms of operative peril. Field J rejected this submission, stating among other reasons that the attack on the WTC fell within both the terrorism and hijacking perils covered by the reinsurance contracts and, for this reason, there was "no error in the Tribunal approaching the question of causation generally, rather than through the prism of operative peril".

3. The Tribunal erred in assessing the situation from the standpoint of "an objective independent observer" rather than that of an "informed observer placed in the position of the insured", the latter being the test laid down by Rix J in Kuwait Airways. Field J rejected this, holding that it was "tolerably plain" from the Award that the Tribunal had well in mind that it had to assess the facts through the eyes of an objective observer in the position of the insureds.

4. The Tribunal had failed to have sufficient regard to the purpose and intent driving the hijacks and the crashes. It should have considered whether, given that these were indisputably incidents of a terrorist organisation directed at the WTC, they were "a series" of "occurrences" "arising out of one event". Field J rejected this argument, stating that the Tribunal had taken account of the underlying terrorist plot when analysing how the plan was implemented.

Field J therefore concluded that the Tribunal had made no error of law in reaching its conclusion that the insured losses caused by the attack on the WTC arose out of two events and not one. The law relating to the unities test is relatively well established and this appeal was really about whether the Tribunal had applied that law correctly. Field J said that the Tribunal had proceeded fairly and properly to undertake the exercise in judgement that this involved and the decision it came to was one which was open to it. It should be noted, though, that Field J gave no indication of whether he would have reached the same conclusion had he undertaken that exercise in judgement himself nor did he express a view on whether the Tribunal's decision was the only one that was open to it.


1. [2013] EWHC 154 (Comm)

2. [1996] 1 Lloyd's Rep 664

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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