This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc: Ontario Court rules against insurer in claim by estate of teen killed in Iranian plane crash – The Lawyer’s Daily (thelawyersdaily.ca)
An insurer was recently ordered to pay a death benefit of $100,000 to the estate of a teen killed in the downing of Ukraine International Airlines Flight PS752.
The decision, Arbabbahrami (Estate) v. MSH International (Canada) Ltd., 2022 ONSC 5723 involved a coverage dispute between the estate of Arshia Arbabbahrami and Berkley Insurance Company (the underwriter of the policy). Following a summary judgment motion brought by the plaintiffs, Justice Rob Centa of the Superior Court of Justice held that Arshia’s death was covered under the accidental death provisions in the policy and that the exclusion for acts of war did not apply.
On January 8, 2020, Arshia Arbabbahrami boarded Ukraine International Airlines Flight PS752 from Tehran, Iran, to return to Canada. At the time, Arshia was studying as an international high school student in Calgary and had been visiting Iran for the holidays. As an international student, he was required to purchase a health insurance policy.
Almost immediately after takeoff, Flight PS752 was struck by one – possibly two – Iranian surface-to-air missiles. Tragically, Arshia and everyone else aboard were killed in the ensuing crash.
Arshia’s health insurance policy included accidental death coverage for common carrier accidents. Arshia’s family members made a claim on behalf of his estate for accidental death benefit of $100,000. The insurer conceded that Arshia’s death fell within the scope of the policy. However, the insurer argued that the “acts of war” exclusion applied. The exclusion states:
This policy does not cover losses or expenses related in whole or in part, directly or indirectly to any of the following: …
[A]n act of declared or undeclared war, civil war, rebellion, revolution, insurrection, military or usurped power or confiscation or nationalization or requisition by or under the order of any government or public or local authority.
The insurer argued that the downing of Flight PS752 constituted either an act of declared or undeclared war, or an act of military or usurped power.
Justice Centa’s analysis relied on investigations of the incident completed by the Canadian Forensic Examination and Assessment Team (“CFT”) and Iran’s Aircraft Accident Investigation Board (“AAIAB”).
Justice Centa noted that there had been escalating tensions between Iran and the United States prior to the crash. Notably, on January 3, 2020, a targeted US drone strike in Iraq killed Iranian Major General Qassem Soleimani. As a response to the attack, Iran launched missiles at two Iraqi military bases used by the US on January 8, 2020. Iran’s air defence system was placed on a higher level of alertness in order to prepare for a possible counterattack.
Roughly four hours after Iran had fired its missiles, Flight PS752 departed from Imam Khomeini Airport in Tehran. Two minutes later, an Iranian surface-to-air missile operator fired a missile at the plane, and fired a second missile thirty seconds later (it is unclear whether the second missile made contact with the plane). The first missile struck the plane, and six minutes after its departure, PS752 crashed to the ground.
Upon review of the CFT and AAIAB’s final reports regarding the crash, Justice Centa made the following findings:
- The missile operator was unaware that he was shooting at a civilian airliner;
- The operator believed that he was firing at an incoming missile;
- Iranian military authorities had not granted authority to launch missiles without approval from command to the operator;
- No Iranian official ordered the operator to shoot the missiles and the operator did not have the necessary approvals to fire;
- The attack was not premeditated; and
- A properly functioning military command and control operation would have prevented the attack.
Justice Centa rejected the insurer’s position that the crash had been an act of declared war. Neither the US nor Iran had declared war as of the date of Arshia’s death, and neither country made any such declarations afterwards.
Justice Centa also held that the missile strike on Flight PS752 was not an act of undeclared war. The crash involved a Ukrainian flight occupied by 146 Iranian nationals, which had been flying in an airspace approved by the Iranian government for civilian flights. The attack had not been deliberate, pre-mediated, intended to take away human life, or sanctioned by government. It had been caused by human error.
Finally, the insurer argued that the attack involved military or usurped power – another element of the “acts of war” exclusion. The insurer contended that the terms “military” and “usurped power” should be read separately as independent exclusions such that any military act fell within the exclusion.
Justice Centa disagreed. In his review of the case law, he found that the two terms “military” and “usurped power” had consistently been interpreted as forming a single exclusion. Justice Centa held that although the missile operator proceeded without instructions from a military superior, his actions did not constitute an usurpation of the power of the state. Nothing from the circumstances indicated that the Iranian government’s powers had been seized by an organized military operation.
As the exclusion did not apply, Justice Centa ruled that the deceased’s estate was covered under the policy and entitled to the $100,000 accidental death benefit.