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9/11 Terror Attacks on Twin Towers Were ‘Two Events’

In the context of an insurance dispute, the Commercial Court has upheld a ruling by arbitrators that the 9/11 hijackings that led to the collapse of the twin towers of the World Trade Centre in New York were two events, not one. The ruling will have a major impact on the application of policy limits and deductibles in respect of four excess of loss reinsurance contracts.

The arbitrators had rejected arguments put forward by the claimant insurers that the September 2011 terrorist attacks should be viewed as a single event for insurance purposes on the basis, inter alia, that the co-ordinated hijackings were part of a single Al Qaeda plot, the planes were scheduled to take off within minutes of each other and that the twin towers were part and parcel of a single real estate complex.

The claimants appealed under section 69 of the Arbitration Act. However, dismissing the challenge, the court ruled that the arbitrators were entitled to conclude that an independent objective observer in the position of the insured parties would view the attacks as two events. The court noted that the twin towers were separate buildings, albeit linked by a mall, and collapsed approximately half an hour apart. There was no error in the arbitrators’ conclusion that there was no sufficient ‘degree of unity’ between the attacks to enable them to be viewed as either a single occurrence or two occurrences arising out of a single event.