Silverstein Properties, the master lease holder on the World Trade Center, has filed suit in Federal District Court against Bermuda-based ACE Ltd. and XL Capital in an effort to prevent their plans to begin arbitration proceedings in London concerning the coverage of WTC claims.
Swiss Re has already named Silverstein in a declaratory relief action filed in NY on October 22 (See IJ Website Oct.23), asking that the destruction of the twin towers be declared a single loss event. Silverstein has maintained the position that the losses arose from two separate instances, which would lead to $7 billion recovery for the loss of both structures, rather than one only.
The U.S. Congress has approved legislation providing that all disputes relating to Sept. 11 claims are to be heard in federal court for the Southern District of New York. The policies issued by ACE and XL, however, reportedly contain clauses directing that any disputes be resolved by arbitration in London.
At issue is the policy wording, which had not actually been formalized at the time of the attacks, of the interpretation of “occurrence.” ACE, whose policy limits cover $298 million per occurrence, and XL with $68 million, could see those amounts double if Silverstein’s position is upheld by the court.
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