This is another reinsurance aggregation case arising out of the 9/11 attacks on the World Trade Centre. It is an appeal from arbitration as to whether personal injury claims brought against the Port of New York (PONY) by rescue and clean-up workers should be aggregated, for XL reinsurance purposes, as losses arising from one event.
The tribunal had concluded, 2:1 in PONY's liability insurers' favour, that all such claims should be aggregated under their liability excess of loss programme, with the relevant event being the WTC attacks.
Reinsurers appealed, arguing there was insufficient causal connection between PONY liabilities and the WTC attacks.
Both arbitration tribunal and Court applied well-known authorities on "event" aggregation, including the "unities" test and the requirement that the causative link between losses and event must be significant, rather than weak. The panel had found that, regardless of any question of negligence on the part of PONY, the WTC attacks were a significant cause of the losses. The Court held there was no error of law in the approach they had taken, and that reinsurers' true complaint was that they disagreed with the arbitrators as to the degree of causal connection between the attacks and the PONY claims, which did not amount to grounds for an appeal. The appeal therefore failed and the one event approach was upheld.
Both arbitration tribunal and court applied wellknown authorities on "event" aggregation, including the "unities" test and the requirement that the causative link between losses and event must be significant, rather than weak.
In AIOI v Heraldglen (see http:// www.hfw.com/Twin-TowersFeb-13), the Court previously upheld a different arbitration tribunal's conclusion that, under certain whole account catastrophe excess of loss reinsurance, there were two aggregating events, one per tower, from which the liabilities of both airlines and passenger security companies arose.
It is not unknown for different panels of arbitrators to quite legitimately reach different conclusions from each other. Moreover, the AIOI and PONY cases are not directly comparable for a number of reasons. One difference flows from the requirement that, in assessing the four "unities" of time, place, cause and intention, the facts should be assessed from the viewpoint of the insured: in the recent case this was PONY, and in the AIOI case the insureds were the two airlines/security companies. (In the PONY case neither party argued for two events.)
It will be interesting to see whether and how whole account liability retrocessionaires permit eventbased aggregation of WTC airline liabilities with PONY liabilities. Some pragmatism may be called for, if further dispute is to be avoided.