Towers Insurance Case To Be Arbitrated
Sydney Morning Herald
Thursday March 14, 2002
Westfield America Trust has resolved its dispute with Zurich Insurance over supplementary insurance on the retailing area of the World Trade Centre.
As part of the resolution, court proceedings begun last November were voluntarily dismissed.
Both parties have agreed that coverage for the World Trade Centre loss will be subject to binding arbitration. Westfield's directors yesterday said it had agreed to cap any supplementary insurance coverage by Zurich at $US55 million ($105 million).
The insurance is separate from the $US3.5 billion ``per occurrence" primary insurance policies on the World Trade Centre.
In November Zurich asked the Federal Court in New York to declare that Westfield's insurance policy did not cover the centre's mall at the time of the attacks.
Zurich's claim was that at no time before September 11 had Westfield arranged for insurance coverage of the new property in its portfolio.
In April last year Westfield paid a first instalment of $US130 million for a 99-year lease on the retail area below the towers. The final cost was $US420 million.
The retail area of about 40,000 sqm below the towers was to be owned by the listed Westfield America Trust.
After the September 11 attack on the towers, Westfield said it was fully insured for the loss of both capital and income, including for terrorist attacks.
As part of yesterday's settlement, the parties agreed the Zurich policy, which took effect as part of Westfield's annual renewal of its insurance policies on July 1, 2001, was a general property insurance policy covering Westfield America's entire portfolio.
The resolution comes hot on the heels of court action with the Australian Competition and Consumer Commission over an allegation of misleading or deceptive conduct against a former tenant in Brisbane in 1999.
Westfield said it would vigorously defend the action.
The trust's units closed unchanged at $1.85.
© 2002 Sydney Morning Herald