Aioi Nissay Dowa Insurance Company Ltd (formerly The Chiyoda Fire & Marine Insurance Company Ltd) v (1) Heraldglen Ltd (2) Advent Capital (No.3) Ltd [08.02.13]

Commercial Court confirms reinsurers' losses arising out of 9/11 attacks on Twin Towers caused by two separate occurrences arising out of separate events.


This decision should not come as a surprise. The High Court has merely removed any remaining uncertainty in the reinsurance market by confirming that the 9/11 attacks on the World Trade Center constituted two separate events for aggregation purposes.

It also provides an example of the uncertainty that can arise from the inconsistent use of terms such as "loss", "occurrence" and "event" in reinsurance contracts.

While the High Court has reiterated that "loss" does not equal "occurrence", the difference between "occurrence" and "event" is often more subtle and can change depending on the context and the specific policy wording.

The judgment also underlines the important distinction between "event" and "cause" wording. In the New York case of World Trade Center Properties v Hartford Fire Insurance Co [2003], the property losses following the collapse of the towers were aggregated because they were directly or indirectly attributable to one cause, the terrorist conspiracy. The court in this case has specifically held that "event" does not have the same, broad interpretation.


As we are all aware, four aircrafts were hijacked by terrorists on 11 September 2001, two of which were crashed into each of the World Trade Center Towers in New York. Proceedings were commenced in the United States against the two airlines affected, as well as the security companies that had carried out the passenger screening at the airports. Claims on reinsurance contracts issued by Heraldglen and Advent Capital were subsequently settled on the basis that the attacks on each of the towers were separate events.

Aioi Nissay had written retrocession excess of loss reinsurance in favour of Heraldglen and Advent Capital, which was subject to London Standard Wording 351. Article 4 provided that the term "each and every loss" meant "each and every loss or accident or occurrence or series thereof arising out of one event". Aioi Nissay argued that the losses were caused by one or more occurrences or series of occurrences "arising out of one event".

The dispute proceeded to arbitration, at which the arbitrators disagreed with Aioi Nissay and found that the losses were caused by two separate occurrences arising out of separate events. Aioi Nissay appealed to the High Court, arguing that the tribunal had erred in law.


The Commercial Court upheld the arbitrators' award. It held that the circumstances surrounding the losses had to be examined to ascertain whether there was sufficient "unity" to justify a finding that they had arisen out of one occurrence. The degree of unity is assessed having regard to factors such as locality, time and the intentions of the human agents.

Despite the proximity in time between the departure of each flight and the subsequent crashes, as well as the fact that the Twin Towers formed part of the same building complex, the arbitrators had been entitled to find that there was no sufficient unity for the losses to have arisen out of the same event. There were two separate successful hijackings of two different aircraft. The underlying terrorist plot of 9/11 could not in itself be an occurrence or event.

The Judge also clarified that an "occurrence" or an "event" is not the same as a "loss" because one "occurrence" can encompass a plurality of "losses".