Full opinion text
MEMORANDUM OPINION AND ORDER HAIGHT, District Judge: Plaintiffs Holiday Inns, Inc. (“HI”) and Holiday Inns (Lebanon), Inc. (“HI-L”) bring this action against defendant Aetna Insurance Company (“Aetna”) to recover under an insurance policy in force when plaintiffs’ hotel in Beirut, Lebanon was severely damaged by events occurring during a period from October, 1975 to April 9,1976. Aetna contends that the damage resulted from excluded causes. This Court’s opinion of June 20, 1979 held that Aetna had the burden of proving that proposition. After extensive pre-trial discovery, the issue of coverage under the policy was tried to the Court without a jury. The quantum of plaintiffs’ recovery, assuming coverage, was reserved. Thus this decision is limited to whether or not the loss is covered by the policy. I. The Decision of the Second Circuit in Pan American World Airways, Inc. v. Aetna Casualty & Surety Co. For reasons that will become apparent, I begin with an incident occurring over the skies of London on September 6, 1970. On that day members of the Popular Front for the Liberation of Palestine (“PFLP”) hijacked a Pan American jet aircraft. The aircraft ultimately landed at Cairo where, after all passengers were evacuated, the hijackers destroyed it. Pan Am instituted suit because none of the several insurers whose policies covered the aircraft accepted coverage. The litigation resolved itself into a struggle between the “all risk” insurers and the “war risk” insurers, the latter’s policies being intended to cover causes of loss excluded under the all risk policies. Affirming the judgment of this Court, 368 F.Supp. 1098 (S.D.N.Y.1973) (Frankel, D.J.), the Second Circuit held the all risk insurers liable because “none of the all risk exclusions, considered in a light most favorable to the insured, fairly describes the cause of the present loss.” Pan American World Airways, Inc. v. Aetna Casualty & Surety Co., 505 F.2d 989, 1022 (2d Cir.1974) (hereinafter “Pan Am”). The Second Circuit decided Pan Am on October 15, 1974. At that time HI was negotiating, through brokers, with present defendant Aetna the all risk policy forming the subject matter of the case at bar. That policy issued under date of March 11, 1975. The “Aetna” involved in Pan Am was a different company. But the Second Circuit, in a scholarly, 33-page opinion by Judge Hays, with encyclopedic citation of authority, placed the insurance industry on notice when it declared certain principles of insurance law applicable to, and defined terms appearing in, all risk property policies. It often happens that insurers and their insureds, litigating the question of coverage, draw analogies to judgments of prior centuries. The Second Circuit performed that historical analysis in Pan Am, updating the ancient insurance phrases within the general context of this century’s tragic Middle East strife; and it did so during the gestation period of the very policy in suit. Pan Am accordingly figures prominently in this Court’s judgment. But first I consider the origin of the policy, and its dispositive terms. II. The Origin of the Policy in Suit. HI is a Tennessee corporation which, among other business activities, owns and operates lodging establishments throughout the world. HI carries property insurance on these establishments. Prior to 1969, HI carried insurance on its foreign property through the American Foreign Insurance Association (“AFIA”), an unincorporated association which acts as a foreign department for a group of leading American insurance companies, including Aetna. In 1969 HI switched its foreign insurance to American International Underwriters (“AIU”), a competitor of AFIA. One of Hi’s foreign properties was a building it operated as a hotel in Beirut, Lebanon. HI had leased the building in June, 1969 from the Saint Charles City Center, a Lebanese corporation. At the pertinent times HI-L, a Tennessee corporation and wholly-owned subsidiary of HI, had succeeded to Hi’s rights under the lease with St. Charles City Center. From 1969 the AIU policy covered Hi’s foreign properties, including the Beirut hotel, which was called (consistent with corporate worldwide practice) the “Holiday Inn.” The AIU policy was renewed yearly until 1975. It was not renewed that year for the reasons described below. During the summer of 1974 John J. Geary, AFIA’s resident vice president in Chicago, decided to try to recapture the insurance of Hi’s foreign properties. Geary knew William A. Day, in charge of Hi’s insurance matters, and William G. Miller, his associate. Geary opened up negotiations with them. The HI executives were receptive. In putting together a proposal, Geary worked with Claude Lair, a property underwriter in New York whose function it was to review, accept or reject risks, and to determine premiums for the risks his principals would accept. Lair’s first quotation on behalf of insurers was summarized by Geary thus: “They said they would give riots, strikes and civil commotion in Europe and riot, strike elsewhere.” This means that the insurers were offering broader coverage for HI properties located in Europe than in other parts of the world. In Europe, the insurers proposed to cover damage caused, inter alia, by riots, strikes and “civil commotion”; elsewhere, civil commotion coverage was not offered. Geary argued with Lair about the Beirut hotel. That discussion took place on February 26, 1975. Geary viewed Beirut as “the Paris of the Middle East”; he urged Lair to extend civil commotion coverage to the hotel there because “it would be better for the insured.” Lair finally agreed, but told Geary “you ought to get more money,” because as originally quoted “the rate did not contemplate civil commotion.” Geary then advised Day at HI that, in respect of the Beirut property, “I now have permission from New York to extend that, to change it from riot, strike to SRCC.” Geary was pleased to have persuaded the New York underwriter because “it sweetened the policy for Holiday Inns” by providing “broader coverage.” Negotiations between AFIA and HI culminated in a policy issued by Aetna, an AFIA member, on March 11, 1975. Civil commotion coverage for the Beirut property was specifically included. HI paid an additional premium for it. III. The Pertinent Provisions of the Policy. The policy consists of a printed form, typed additional provisions, and a number of printed or typed endorsements. The intricacies of their interrelationship were considered in this Court’s prior opinion of June 20, 1979, familiarity with which is assumed. It is not necessary to repeat the exercise. Nor need HI have done so in its post-trial brief at 20-26; Aetna does not dispute the identity or wording of the controlling provisions. Cf. Aetna post-trial brief at 1. In short, Aetna issued HI an all risk policy covering against “all risks ... of direct physical loss or damage to the above described property from any external cause except as hereinafter provided.” The exclusions upon which Aetna relies appear in Form 1301, endorsement No. 5 to the policy. That endorsement provides in pertinent part: “2. This insurance does not cover:— “a) Loss or damage caused by any of the perils hereby insured against, if such loss or damage either in origin or extent is directly or indirectly, proximately or remotely, occasioned by or contributed to by any of the following occurrences, or, either in origin or extent, directly or indirectly, proximately or remotely, arises out of or in connection with any of such occurrences, namely:— “War, invasion, act of foreign enemy, hostilities or warlike operations (whether war be declared or not), civil war, mutiny, insurrection, revolution, conspiracy, military or usurped power.” Aetna contends that the damage to the Holiday Inn in Beirut was caused by human forces constituting the excluded perils of insurrection, civil war, and war. The quoted exclusions in Form 1301 are preceded by the provision which extended civil commotion coverage to the Beirut property. The form also provides: “1. This policy covers physical loss or damage to the property insured (including loss or damage due to fire or explosion) directly caused by persons taking part in riots or civil commotion or by strikers or locked-out workers or by persons of malicious intent acting in behalf of or in connection with any political organization; also loss of or damage to the property insured (including loss or damage due to fire or explosion) directly caused by the action of any lawfully constituted authority in connection with the foregoing perils only.” IV. Principles and Definitions Declared by the Second Circuit in the Pan Am Case. A. Legal Principles It is now useful to review the pertinent principles declared by the Second Circuit in Pan Am. 1. Under an all risk policy, the insured need not prove the cause of the loss. It need only prove the existence of the all risk policy, and the loss of the covered policy. The insurer then has “the burden of proving that the proximate cause of the loss ... was included within one of the terms of exclusion.” 505 F.2d at 999. 2. Exclusions “will be given the interpretation which is most beneficial to the assured.” Ibid. 3. To avoid coverage, “it is not sufficient for the all risk insurers’ case for them to offer a reasonable interpretation under which the loss is excluded; they must demonstrate that an interpretation favoring them is the only reasonable reading of at least one of the relevant terms of exclusion.” Id. at 1000. This principle is described by the Second Circuit as a manifestation of the rule of construction contra proferentem. 4. Contra proferentem “defines the scope of coverage as much as if it were a clause in the all risk policies”; experienced all risk insurers must expect “the exclusions drafted by them to be construed narrowly against them,” id. at 1003-04. 5. Where an all risk policy excludes “loss or damage due to or resulting from” enumerated perils, these words limit the inquiry concerning proximate cause “to the facts immediately surrounding the loss.” That is to say, “the causation inquiry stops at the efficient physical cause of the loss; it does not trace events back to their metaphysical beginnings.” It is “a mechanical test of proximate causation for insurance cases, a test that looks only to the ‘causes nearest to the loss.’ ” At least, that is so in respect of a policy worded like that in Pan Am; the Court of Appeals added the caveat: “if the insurer desires to have more remote causes determine the scope of exclusion, he may draft language to effectuate that desire.” Id. at 1006-07. 6. In commercial litigation arising out of insurance policies, words and phrases are construed “for insurance purposes” — a context quite different from those of politics or journalism. Thus the Second Circuit summarized the issue in Pan Am: “We are asked on this appeal to determine which of the various underwriters that insured the aircraft must bear the cost of the loss. This determination depends on whether the September 6 hijacking was proximately caused by an agency fairly described, for insurance purposes, by any of the exclusions contained in a group of identical all risk aviation policies — policies which, if not for the exclusions, would cover the loss.” Id. at 993 (emphasis added). Comparable reasoning appears in Spinney’s (1948) Ltd. v. Royal Insurance Co. Ltd., supra, a case which like that at bar involved the violence in Lebanon in 1975 and 1976. Mr. Justice Mustill was asked by one of the litigants to inquire of the Secretary of State for Foreign Affairs whether the situation in Lebanon constituted a “civil war” (that being an excluded peril under the policy in suit). The judge declined to do so: “The issue is not whether the events in Lebanon were recognized by the United Kingdom as amounting to a civil war in the sense in which the term is used in Public International Law with the corollary that this country would, if the occasion had arisen, have accorded to the participants the rights and demanded of them the duties appropriate to belligerents. The question here is whether there was a civil war within the meaning of the policy. The two questions are not the same, and a pronouncement by the Secretary of State on one will not suffice to decide the other: (citing cases) ... When deciding whether the excepted perils apply, the ascertainment of primary facts is only one step in the process. The real problem is to interpret what was happening, in the light of the words used in the policy.... Answering the question would require the Secretary of State to ascertain the meaning of the words used in the policy, and unless the Court could be sure that the Secretary of State and the Court were adopting the same interpretation, the exercise would serve only to confuse....” [1980] 1 Lloyd’s L.Rep. at 426. B. Policy Definitions The all risk insurers in Pan Am argued that the aircraft’s destruction at the hands of hijackers fell within a number of excluded perils. They included “war,” “civil war,” and “insurrection.” These are the exclusions upon which Aetna relies in the case at bar. The Pan Am policy also excluded “riots” and “civil commotion” from coverage. As noted supra, the Aetna policy covers damage from such causes. The Second Circuit’s definitions of these phrases, declared in Pan Am at a time when the policy in suit was being negotiated in the New York underwriting market, are of obvious significance to this Court. 1. War Having reviewed English and American cases, 505 F.2d at 1012-1015, the Second Circuit concluded in Pan Am that “war is a course of hostility engaged in by entities that have at least significant attributes of sovereignty.” Id. at 1012. The court summarizes the definition: “English and American cases dealing with the insurance meaning of ‘war’ have defined it in accordance with the ancient international law definition: war refers to and includes only hostilities carried on by entities that constitute governments at least de facto in character.” Ibid. (emphasis added; note again the emphasis on definition for insurance purposes). For insurance purposes, then, “[w]ar can exist between quasi-sovereign entities.” It follows that “war” does not include “conflicts waged by guerrilla groups regardless of such groups’ lack of sovereignty.” The Second Circuit in Pan Am rejected that contention by the all risk insurers, holding instead that “a guerrilla group must have at least some incidents of sovereignty before its activities can properly be styled ‘war.’ ” Id. at 1013. The all risk insurers’ reliance upon the “war” exclusion failed in Pan Am because the PFLP, to which the hijackers belonged, had not been accorded by Middle Eastern states “the rights of a government.... No Arab state recognized the PFLP. The fact that the PFLP received financial support from several states does not give it the status of a ‘quasi-sovereign.’ ” Nor could the PFLP’s own exaggerated rhetoric, proclaiming itself to be “at war with the entire Western World,” change the practical realities. The court held the “war” exclusion inapplicable in Pan Am because the hijackers who constituted the efficient physical cause of the loss “were the agents of a radical political group, rather than a sovereign government.” Id. at 1015. 2. Insurrection After disposing of the all risk insurers’ reliance upon the exclusion for “warlike operations” — a phrase appearing in the Aetna policy but which Aetna does not press— the Pan Am court dealt with the insurance meaning of “insurrection.” The Second Circuit coupled its consideration of “insurrection” with that of “civil war,” for reasons which appear from its analysis at 505 F.2d 1017: “In the district court the all risk insurers relied on every term in clause 2 except ‘invasion.’ Thus, aside from ‘war’ and ‘warlike operations,’ they claimed that the loss was excluded from coverage by each of ‘civil war,’ ‘revolution,’ ‘rebellion,’ and ‘insurrection.’ Their efforts soon focused on the last of these terms, because all parties agreed that if the loss was not caused by an ‘insurrection,’ then it could not have been caused by any of the other clause 2 terms relating to civil disorders. ‘Insurrection’ presents the key issue because ‘rebellion,’ ‘revolution,’ and ‘civil war’ are progressive stages in the development of civil unrest, the most rudimentary form of which is ‘insurrection.’ See Home Insurance Co. v. Davila, 212 F.2d 731, 736 (1st Cir.1954); cf. The Brig Amy Warwick (The Prize Cases), 67 U.S. (2 Black) 635, 666, 17 L.Ed. 459 (1862). The district court accordingly confined its inquiry to insurrection, see 368 F.Supp. at 1123-1124, and we shall do the same.” Judge Frankel, writing for this Court in Pan Am, held that for insurance purposes “insurrection” means “(1) a violent uprising by a group or movement (2) acting for the specific purpose of overthrowing the constituted government and seizing its powers.” 368 F.Supp. at 1124. Judge Frankel relied upon Home Insurance Co. v. Davila, 212 F.2d 731 (1st Cir.1954), an opinion by Chief Judge Magruder which the Second Circuit characterized in Pan Am as “the chief case on the insurance meaning of insurrection.” 505 F.2d at 1017. Davila involved violent acts in Puerto Rico by members of the Nationalist Party of Puerto Rico, a band of extremists possessing a rudimentary military organization with cadets, officers, and a training program. Four carloads of Nationalists arrived at a town where the insured’s property was located, set fire to it, battled the police, impeded the firemen, and ran up the Nationalist flag. The insurers defended on the exclusion of “insurrection” as a covered peril. The First Circuit reversed a jury verdict for the insured and remanded for a new trial because the trial judge improperly failed to instruct the jury that “if the Nationalist leaders had the ‘maximum objective’ of overthrowing the government, then a jury might find that the loss was caused by an insurrection.” That revolutionary purpose need not be objectively reasonable; “[a]ny intent to overthrow, no matter how quixotic, is sufficient.” Pan Am, paraphrasing Davila at 505 F.2d 1018. But an intent to overthrow the established government is essential to the existence of an insurrection. The necessity of that element of intent is clear from the Second Circuit’s application of the Davila rule to the facts in Pan Am. The defense of “insurrection” was rejected because: “. .. the all risk insurers did not support their burden of proving that at the time of the loss the PFLP intended to overthrow King Hussein.” 505 F.2d at 1018. Reviewing the evidence, Judge Hays’ opinion quoted a statement by the PFLP founder that the “aim of the Palestinian resistance was not to overthrow the Jordanian regime, but merely to put pressure on it.” Ibid. The analysis concludes: “From the welter of conflicting evidence, reasonable men might draw any of a number of conflicting conclusions about the PFLP’s motives on September 6. One of those reasonable conclusions is that the PFLP did not intend to overthrow King Hussein when it hijacked the Pan American 747. The hijacking was designed to attract world attention to the Palestinian cause and to accumulate ‘victories’ as an example to other groups. It was a ‘symbolic blow’ in the PFLP’s fight against the United States. The all risk insurers failed to carry the burden of proving the crucial element of PFLP intent.” Id. at 1018-19. This language is significant not only because it demonstrates that the specific intent to overthrow the established government is a sine qua non of an insurrection. The Second Circuit analysis also measures the weight of the burden of proof falling upon an all risk insurer who relies upon excluded perils. It is not sufficient for the insurer to prove a set of circumstances from which the requisite intent is one of several plausible conclusions that a reasonable fact-finder could draw. The insurer must prove the existence of “the crucial element of intent”; and its proof must negate the existence of differing intents or purposes which, if present, would result in policy coverage. 3. Civil War The Second Circuit did not deal at length with “civil war” in Pan Am because it regarded “insurrection” and “civil war” as “progressive stages in the development of civil unrest, the most rudimentary form of which is ‘insurrection.’ ” Thus if there was no insurrection, there could by definition have been that higher form of strife, a civil war. The Second Circuit’s discussion indicates that the litigants in Pan Am all accepted this proposition. To the extent that Pan Am defines “civil war,” it must surely be read to require that specific intent to overthrow established government which is also essential to an insurrection. This subject is further dealt with under Point VIII(2), infra. 4. Civil Commotion; Riot In dealing with “civil commotion” and “riot,” the Second Circuit said in Pan Am that these terms “have a domestic flavor that contrasts sharply with the sense of the terms employed in the other clauses,” such as “war,” which admits “of application to occurrences with international contexts.” Id. at 1019. The court continues: “Insurance authorities are in accord on the local nature of these perils. ‘Civil commotion ... import[s] occasional local or temporary outbreaks of unlawful violence.’ 11 G. Couch, Cyclopedia of Insurance Law 42:487 (2d ed. 1963); Boon v. Aetna Insurance Co., 3 Fed.Cas. p. 871 (No. 1,639) (C.C.D.Conn.1874), rev’d on other grounds, 95 U.S. 117, 5 Otto 117, 24 L.Ed. 395 (1877); Adel Salah El Din, Aviation Insurance Practice, Law & Reinsurance 112-13 (1971). Riots and civil commotion are purely ‘domestic disturbances.’ Rogers v. Whittaker, [1917] 1 K.B. 942, 944. There is no authority for the proposition that riots or civil commotion are other than local, domestic disturbances.” Ibid. Because this is so, the Second Circuit held that “civil commotion does not comprehend a loss occurring in the skies over two continents.” Id. at 1020. Judge Frankel’s definition of civil commotion was approved: “essentially a kind of domestic disturbance,” referring to disorders “such as occur among fellow-citizens or within the limits of one community,” the Second Circuit adding: “For there to be a civil commotion, the agents causing the disorder must gather together and cause a disturbance and tumult.” Id. at 1020. As for “riot,” the Second Circuit approved Judge Frankel’s definition: “... a riot occurs when some multitude of individuals gathers and creates a tumult.” Id. at 1021. Taking the principles and definitions declared in Pan Am as constituting the binding law in this Circuit, I turn now to the events which resulted in the damage to the Holiday Inn in Beirut. I first consider the immediate causes of the damage, physical and mechanical, to be followed by an overview of the circumstances in which those events occurred. V. The Damage to the Holiday Inn, Beirut. The Republic of Lebanon has a surface of roughly 4,000 square miles. Lebanon measures 135 miles from north to south, and is approximately 35 miles wide at its broadest point. Lebanon borders Israel on the south, Syria on the north and east, and the Mediterranean Sea on the west. The capital, Beirut, is the largest city in Lebanon, situated on the Mediterranean coast, midway along the country’s length. The main roads from Beirut lead north along the coast to the ports of Jounieh and Tripoli; south along the coast to the ports of Sidon and Tyre; and east to Damascus, the capital of Syria. At the times with which this case is concerned Beirut was divided. Ultimately this division was manifested by the so-called “Green Line,” which bisected the city in a north-south direction, into East Beirut and West Beirut. The Lebanese population of East Beirut was predominantly Christian; West Beirut was predominantly Moslem. Beirut was also ringed by a number of camps housing Palestinian refugees. The Holiday Inn, Beirut, first opened for operation in 1974. It was a 26-floor structure which, during its brief operative life, had a revolving restaurant on the top floor, a nightclub on the 25th floor, some 400 guest rooms, office spaces, and a ground floor lobby and the usual public rooms. The Holiday Inn was located in the northeastern quadrant of West Beirut, close to the port facilities. A number of other first-class hotels were in this area, including the Intercontinent, the Phoenicia, the Hilton, and the Saint Georges, the latter being directly on the water. Just to the south of this grouping of hotels lay Kantari, a residential and commercial district occupied for the most part by Moslems. The Holiday Inn, while one of the taller buildings in Beirut, was not the tallest: that distinction belonged to the Murr Tower, a concrete structure which in October of 1975 was nearing completion several blocks to the south-east of the Holiday Inn. On Saturday, October 25, 1975, a battle began for possession and control of the Kantari district. Kantari, in West Beirut, “was a rather expensive residential area lying between the city center to the west, the newly built international hotels to the north [of which the Holiday Inn was one], the commercial district to the east and poorer Moslem suburbs to the south.” There had been fighting in Lebanon for some seven months; but the battle for Kantari marked the emergence of a new fighting force on the streets of Beirut. This was the Mourabitoun, the militia force of the Independent Nasserite Organization. The existence of the Independent Nasserite Organization was well known; it was one of numerous groups comprising what may generally be described as the “Moslem left” (as opposed to the Christian right). What had not been realized was that the Independent Nasserite Organization had a large and effective militia. These were the Mourabitoun. On October 25, 1975, the Mourabitoun organized an attack from one of the Moslem suburbs to the south, driving west into Kantari toward the sea front. The Independent Nasserites and the Mourabitoun were directed by Ibrahim Kleilat, who was about to be “transformed from a back-street gangster into a politician” by the events which began on October 25. In their attack upon the Kantari district, the Mourabitoun were joined by some Saiqa militiamen. The Saiqa was a Palestinian commando organization, backed by Syria. The Mourabitoun were also joined by fighters of the radical Palestinian organizations Popular Democratic Front for the Liberation of Palestine (“P.D.F.L.P.”) and Popular Front for the Liberation of Palestine (“P.F. L.P.”). The opponents of these forces consisted of militiamen from the Phalange and the Party of Liberal Nationalists (“P.N.L.”). The Phalange was organized along paramilitary lines in the mid-1930’s. It drew most of its support from the Christian population of Lebanon, although some Moslems were also to be found in its ranks. The Phalangist Party was directed by Sheikh Pierre Gemayel, a leading Maronite Christian. By 1975, the Phalange was the largest of the predominantly Christian groups, with the largest and best armed militia. The P.N.L., also predominantly Christian, had been founded by Camille Chamoun, a former president of Lebanon. Its militia, called the Tigers, numbered at least 3,500 men in 1975. The population of the Kantari district was mixed, but it was under the control of the Phalange. The Phalangists living in Kantari were not full-time militiamen; they were members of their party whose job it was to defend their own area if called upon to do so. For this purpose, they retained in their homes such weapons as machine guns, rifles, rocket launchers, and grenades. In view of the prevailing circumstances, the Phalangists kept people on guard each night. The Mourabitoun had as their particular objective, during the attack launched on October 25, the Murr Tower, then under construction at the end of Selim Boustiany Street. As noted, the Murr Tower was the tallest building in Beirut, several blocks to the southeast of the Holiday Inn. The Murr Tower was defended by units of Phalangist militia. After launching some diversionary attacks down other streets, which had the effect of drawing some Phalangist militia away from the Murr Tower, the Mourabitoun launched a frontal attack upon the Murr Tower, “an ordinary infantry type attack assault, using assault rifles, grenades, machine guns, rockets.” The remaining Phalangist guards around the base of the Tower responded with machine guns, rifles, rocket launchers, and grenades. Substantially outnumbered, the Phalangists retreated to the first floor of the Murr Tower, and from there were able to hold off the attackers for several hours; but eventually, all Phalangists guarding the Murr Tower were killed, and the Mourabitoun succeeded in taking the Tower. Having done so, they went up into its higher floors, from which they could command a wide field of fire. As the fighting in Kantari progressed, the bells of the Christian churches were rung, and all Phalangists in the area turned out to resist the Mourabitoun. In other parts of Kantari, the Phalangists were able to repel the attacks; the quick seizure of the Murr Tower constituted the Mourabitoun’s main success of the night. Having seized the Murr Tower, the Mourabitoun installed sand bags and heavy machine guns on the top floors. By doing so, the Mourabitoun were able to harass Phalangist street movements in several directions. “After their quick success in Kantari, the Mourabitoun seemed to run out of steam”; in this, their first appearance in the streets, the Mourabitoun “had fought tenaciously and well to prove themselves a match for any of the other proliferating private armies.... Having made their point, they were content to sit back for a while, to collect the spoils of war and leave it to their leaders to reap the political harvest.” In November and December, 1975, fighting continued in this part of Beirut. The Phalangist militia continued to hold the hotels in the sea front district, including the Holiday Inn. In consequence, there was fighting between the Phalangist militia in these hotels, and the leftist forces in the surrounding areas. Fire was exchanged between the Murr Tower and the sea front hotels. In addition, people on the ground would fire at the hotels. The weapons used included machine guns, rocket launchers, and rifles. In October of 1975, the European comptroller for HI was Jan Reedijk. Reedijk was based in Brussels, and those in charge of the Holiday Inn, Beirut reported to him. Reedijk happened to be in Memphis, Tennessee, the HI headquarters, when he first heard that the Holiday Inn, Beirut had suffered damage. At some time in November, 1975, Reedijk, while in Memphis, received a telephone call from a Mr. Saikali, the local comptroller in charge of the Holiday Inn, Beirut. Saikali told Reedijk that the Holiday Inn had been occupied by Phalangist militia, and that the hotel had incurred “some damage, but nothing major.” After having been assured that it was safe to do so, Reedijk went to Beirut on November 26,1975 and inspected the hotel in the company of the local managers. Reedijk stayed in Beirut only one day. At the time the Phalangists moved into the Holiday Inn, there were only about fifty guests resident there; they were moved out, and this constituted the last time that guests stayed at the Holiday Inn. During his examination of the building, Reedijk observed that the top-floor restaurant was not operational. Its windows had been shot out, and fire and water damage had taken place. Twelve private accommodation rooms had been totally destroyed; 15 rooms were partially damaged by fire; and there were about 35 additional rooms with slight damage consisting of torn or burned curtains and broken glass. Another Holiday Inn employee connected with the Holiday Inn, Beirut who first heard about the fighting while in Memphis was Nabil Chartouni, a Lebanese, who in October of 1975 was vice-president for Middle East development of the Holiday Inns organization. He was stationed at the Holiday Inn, Beirut. In late October 1975, Chartouni was in Memphis attending a business conference. He received a telephone call from his secretary at the Holiday Inn, Beirut, Maria Kazandjian. Chartouni had heard of the Holiday Inn having sustained some damage on the news; Ms. Kazandjian then telephoned him, and said: “Everything is terrible. We are down in the basement now, all the employees and quite a few of the guests, and the bombardment is continuous and the fighting is continuous.” Kazandjian did not specify who was doing the bombarding or the fighting, except to say that “some elements were fighting in the hotel, mainly Phalangists.” Chartouni returned to Beirut in mid-November, at which time he found the hotel empty of guests. When he returned, he found that the hotel facade was damaged in several places. It had been hit by rockets; glass windows had been broken; there was fire damage inside the rooms on several floors; and some looting had taken place. Chartouni XBT at 18. The hotel was closed to guests. Upon his return, Chartouni took charge of the Holiday Inn, Beirut. His main objective was to protect the hotel and maintain the status quo by keeping the damage to an absolute minimum, and trying through his contacts in the area to keep the combatants from coming into the hotel. As noted, Chartouni was not in the hotel when it was first damaged; but on the basis of the reports he received, and his own knowledge of conditions in Beirut, he identified the forces who entered the Holiday Inn when the Mourabitoun launched their attack and seized the Murr Tower as “a hodge podge of various people who happened to be Christian or Moslem at that time, to be fighting on the same side, trying to gain control of a certain area.... You can call them Rightists.” During the period between late October and December 6, 1975, there was “little activity” of a hostile nature in Beirut; “the ‘hotels front’ was the most active, with the Leftists holding the Palm Beach and Excelsior, and occasionally trading fire with the Phalangists in the Holiday Inn, Saint Georges and Phoenicia.” On December 6, 1975, the fighting sharply escalated as the result of what came to be known as “Black Saturday.” On the night before, four Phalangist leaders were found murdered on the outskirts of a village in the Christian area. While the murderers were unknown, “it was presumed that it was some Moslem Leftist Palestinian ‘factions’ and therefore many of the armed Christian individuals went into the streets basically in the port area of Beirut, and they slaughtered many Moslem people.” Moslem leaders sought to prevent a comparable retaliation; but some Moslems retaliated “and slaughtered several Christian people.” In particular, the Moslem leaders could not stop a punitive assault launched against Phalangist militia men holding the hotel area of Kantari. “Ibrahim Kleilat’s Mourabitoun began the assault, spurred on by their determination to exact vengeance for what had happened over the previous two days, and were successful in throwing the Phalangist defenders out of the Saint Georges and Phoenicia hotels, causing considerable casualties to the defenders. These events manifested themselves to Chartouni in the Holiday Inn when Phalangist militia men came into the hotel, shortly after “Black Saturday” to take up positions. It is indicative of the extent to which labels tend to blur in Lebanon that the first Phalangist entering the Holiday Inn with weapons was named “Mohamed”; Chartouni asked him “what in hell” he was doing with the Rightists if his name was Mohamed, and received the answer that the last time the Phalangists were in the Holiday Inn, “there was eight of us here, Moslems, out of 30” — “it has nothing to do with being Christian or Moslem. We are just fighting for a good cause.” Other militia men came into the Holiday Inn; Chartouni decided that it was time to get his employees out. No government agencies were available to send assistants to evacuate the Holiday Inn employees; eventually the American Embassy sent two personnel carriers in response to Chartouni’s statement (untruthful, but surely excused by the exigencies of the situation) that two American citizens were trapped in the hotel. At this time, the Holiday Inn had on the premises a skeleton staff of about 30; when the hotel was operating, the staff numbered 500 employees. Chartouni and certain other Holiday Inn employees were evacuated to the Phoenicia hotel where they remained for some time until the Phoenicia came under increasing fire from Leftist factions that had seized the Saint Georges hotel. At this time, “fire was raging all over the place”; from the Phoenicia, Chartouni could observe that the Saint Georges hotel had been looted and was then set on fire. He could also observe the Holiday Inn, which remained in the hands of the Phalangists. The Holiday Inn was coming under fire from both the Murr Tower and from the Saint Georges. Chartouni could see fires breaking out “from various floors” at the Holiday Inn. Eventually Chartouni was able to leave the Phoenicia hotel in armoured carriers sent by the Lebanese Army. Chartouni spent several days in the mountains, and then formed the desire to get out of Lebanon at that time, “because I felt it was a futile exercise any more to try to protect the hotel.” Chartouni departed Beirut to visit his family in Austria on or about December 13, 1975. While he returned to Beirut periodically for meetings and other business, he did not again go to the hotel district. The post-Black Saturday fighting saw the Mourabitoun on the attack and the Phalangists being driven back. However, the Phalangists held their last defensive line near their headquarters, “and after more than a week the battle ground to a halt as the left-wing militia realized they had taken all the ground they could, and stood no chance of scoring the outright victory they had sought.” That left a Phalangist redoubt jutting into western Beirut; a redoubt which included the Holiday Inn. During the December fighting, the Holiday Inn had been reoccupied by members of rightist militias. Parts of the hotel were set afire and numerous floors were hit by grenades. By Friday, January 2, 1976, the Holiday Inn was totally unattended by and inaccessible to the hotel’s employees. The Holiday Inn was finally wrested from Phalangist hands during fierce fighting between March 21 and 26, 1976. The Mourabitoun were reinforced by units of the Palestinian Liberation Organization (“PLO”), and by officers and men of the so-called “Lebanese Arab Army,” who brought heavy military equipment to the task. Rockets and shells smashed into the building. The Phalangist defenders were killed in floor-to-floor fighting. By a ruse the Phalangists recaptured two floors of the Holiday Inn, but could not hold them, and the Phalangist reinforcements were wiped out in an armoured-car led assault the next day. During this fighting the Holiday Inn changed hands several times. By March 23, however, it was occupied by Moslem and Palestinian leftists. “This time the Inn was properly and effectively garrisoned, and ceased to be fought over, though it was frequently used as a sniper position by Palestinians or Mourabitoun and made movement hazardous on the harbour road in East Beirut.” VI. Lebanon: Its Population, Parties, Leaders, and Neighbors. We must now step back from the immediate, physical causes of the damage to the Holiday Inn, and examine the historical, social and political context within which that violence took place. Prior to World War I, present-day Lebanon and Syria, its neighbor to the north and east, were controlled by Turkey. Following the defeat of the Central Powers in the war, the Turkish Empire was redistributed. The area presently comprising Lebanon and Syria was detached from Turkey, and given to France for administration under Mandate by the League of Nations. The Mandate became effective in 1923, and ended in 1943. As the French withdrew, Lebanon in its modern political form emerged. (a) Population In 1975 and 1976, the population of Lebanon was estimated to be in excess of ZVi million. Included among the native Lebanese, Christian and Moslem, were some 350,000 Palestinians who had come from other lands, in circumstances to be related infra The Christian population consisted primarily of Maronites, Greek Orthodox, Greek Catholics, and other sects. The Moslem population was divided among the Sunni, Shi’ite and Druze sects. (b) Political Structures The political system in Lebanon today is based upon both the written Lebanese Constitution and the unwritten, so-called “National Pact” entered into when France granted Lebanon independence in 1943. The Constitution establishes a Republic and a secular state which is headed by a President who is elected by the Chamber of Deputies for a six-year term. The head of the government is the Prime Minister— sometimes referred to as the Premier — who is appointed by the President. Members of the Chamber of Deputies are elected directly by the people according to the electoral laws of the country. The National Pact provides that the President of the Republic must always be a Maronite Christian; the Prime Minister a Sunni Moslem; and the President of the Chamber of Deputies a Shi’ite Moslem. The National Pact also provides for proportional representation by Moslems and Christians in the Chamber of Deputies in accordance with a fixed ratio. The ratio is fixed on the basis of a population census of 1923, and provides for six Christian representatives to every five Moslem representatives. This allocation of political power along religious lines came to be known as the “confessional” system. It carried over into the Army, where the senior officer corps was predominantly Maronite Christian. (c) Political Leaders From 1970 until September 1976, the President of Lebanon was Suleiman Franjieh, a Maronite Christian. Elias Sarkis, another Christian, became President in September 1976. Camille Chamoun, also a Christian leader, was President of Lebanon from 1952 to 1958. In addition, he was the founder and leader of the Party of Liberal Nationalists (“P.L.N.”). In June of 1975, Chamoun became the Minister of the Interior. In this capacity he controlled Lebanon’s Internal Security Forces (“F.S.I.”) from June 1975 through the middle of 1976. Pierre Gemayel was the leader of the Kataeb Party, also known as the Phalange (to which prior reference has been made), during the early 1970’s. Rashid Karami was a prominent Sunni Moslem leader who served as Prime Minister under President Franjieh from May 1975 through November 1976. Karami had been Prime Minister eight times prior to this appointment. As Prime Minister, Karami was the Commander-in-Chief of the Lebanese Army. Kamal Jumblatt was a prominent Druze leader from the central mountain region of the Chouf. Jumblatt was the founder of the Progressive Socialist Party (“P.S.P.”)', and advocated the abolition of the sectarian system of representation in Parliament and public office. Jumblatt also served as the chief spokesman for the National Movement (see infra). He was assassinated in March 1977. (d) Political Parties and Organizations In 1969 a confederation of left of center political parties was formed which bore the name “National Movement.” The parties agree that the following identifiable organizations or groups were members of the National Movement: The Progressive Socialist Party (“P.S.P.”) The Independent Nasserite Movement (“I.N.M.”) or Independent Nasserite Organization (“I.N.O.”) whose military arm was the Mourabitoun. They have been previously mentioned in connection with the damage to the Holiday Inn The Lebanese Communist Party (“L.C. P.”) The Organization of Communist Action (“O.C.A.”) The Syrian Social Nationalist Party (“S.S. N.P.”) The Ba’ath Socialist Party (Syria): Lebanese Branch The Ba’ath Socialist Party (Iraq): Lebanese Branch The Arab Socialist Union in Lebanon (“A.S.U.L.”) The Union of the Forces of Working People — the corrective movement The Populist Nasserite Organization (“P.N.O.”) The Arab Socialist Action Party The Movement of the Disinherited (a predominantly Shi’ite organization which split with the National Movement in 1976) The 24th of October Democratic Socialist Movement The National Christian Front Many of these parties, organizations or groups which comprised the National Movement had militia of varying sizes. From time to time, and in varying degrees, they had members of various religious persuasions. To the extent that generalizations are possible, and has previously been stated, the members of the National Movement were politically to the left of center. In 1975 and 1976 the chief spokesman of the National Movement was the Druze leader, Kamal Jumblatt. For three hundred years prior to the mid-19th century the Druze dynasties had controlled what is present day Lebanon. However, after a series of battles between 1840 and 1860, the Druze were gradually overcome by the Maronite Christians, who emerged as the dominant community, consisting themselves of seventeen officially recognized sub-communities or sub-sects. The Druze, smaller in numbers, ceded political power, but remained more powerful than their absolute numbers would have suggested. At the times pertinent to this action, Jumblatt was the leader of the Druze, and of the National Movement. Jumblatt was described by Jonathan Randal, the correspondent for the Washington Post in Lebanon at the time, who was called by Aetna to give deposition testimony: “He was a king-maker in independent Lebanon. No president of the Republic was ever elected without his support, and very few presidents of the Republic ever got through their terms without finding Jumblatt a determined adversary.” In describing the politics of Lebanon, one must guard against the simplification of labels. The phrase “National Movement” has a unified, solid sound to it. It is true that the component parts of the National Movement stood to the left of center. But among those component parts, there was wide diversity. The National Movement was described thus by Moussa Prince, a Beirut resident and lawyer called as a witness at trial by Aetna: “It is a movement in which are grouped parties and tiny groups which go .all the way from the ultrareligious up to and including the extreme left.” Standing in general political opposition to the National Movement was the Lebanese Front, a coalition of predominantly right of center organizations whose principal objective was to maintain intact the status quo created by the National Pact of 1943, which I have previously described. The identifiable components of the Lebanese Front were as follows: The Phalange (previously described) The Party of Liberal Nationalists (“P.N. L.”), the party founded by Camille Chamoun Al Tanzim or the “Organization,” a predominantly Maronite group The Guards of the Cedars, an extremist right-wing organization particularly interested in the expulsion of all Palestinians from Lebanon The Zghartan Liberation Army, a Maronite group centered in the Zgharta region of Lebanon. This group was organized by Tony Franjieh, the son of former president Suleiman Franjieh The Permanent Congress of the Lebanese Orders of Monks, an organization of Maronite clergy Some of the parties, organizations and groups described supra were, at various times and in various degrees, allied with or influenced by foreign interests. But they were indigenous to Lebanon. We must also consider three foreign sources of direct impact upon Lebanon. These are the Palestinians, Syria and Israel. (e) The Palestinians The parties do not dispute much of the factual background regarding the Pales-tines in Lebanon. “From 1948 onwards ... Palestinians fled from their homeland in the face of Israeli conquest or harassment, or merely through fear.” Some stopped first on the West Bank of the Jordan River; then, as that was overrun by Israelis, they moved into Jordan proper. But many Palestinians came to Lebanon as a result of the fighting in 1948; and around Beirut “they formed a kind of necklace in a semi-circle going from West Beirut and the Mediterranean, in an arc around to East Beirut.” The Palestinians who first settled around Beirut anticipated returning to Palestine soon. However, the years wore on, and that did not occur. The 1967 Arab-Israeli war inflicted a stunning defeat, in six days, upon the Arab armies. Prior to that time, the Palestinians in Lebanon were regarded as refugees. There was a heavy Lebanese police presence in and around the refugee camps. Few Palestinians were granted Lebanese citizenship. But in the aftermath of the 1967 war, with the Arab countries bewildered and cast down by their defeat, the Palestinians “remained as kind of a symbol of Arab purity and the refusal to accept that defeat.” Concomitantly, in Lebanon a greater militancy arose on the part of the Palestinians, and a lessening of Lebanese government control. This period of time also saw the emergence of Yasser Arafat and his associates as the controlling force in the Palestine Liberation Organization (“P.L.O.”). The P.L.O. had been established in 1964 by the Arab League. Its goal was the creation of a Palestinian state, if necessary by use of force. The P.L.O. established training camps and staging areas in Jordan, Syria and Lebanon. The Palestine Liberation Army (“P.L.A.”) had originally been created as the purported military arm of the P.L.O., but by the 1970’s the primary military arm of the P.L.O. in Lebanon was el Fatah, led by Arafat. In 1969, the P.L.O. entered into an agreement with the Lebanese government which gave the P.L.O. the right to establish armed units and training grounds within the refugee camps, provided that Lebanese sovereignty was respected and maintained. This was the so-called “Cairo Agreement” of November 3, 1969, pertinent portions of which appear in the margin. Syria refused to tolerate the use of its own territory as a base for direct infiltration of and attacks on Israel because of the threat of reprisals. By 1970, the P.L.O. presence in Jordan was significant and threatened the sovereignty of the Hashemite Kingdom. In September 1970 (so-called “Black September”) the Jordanian Army began a series of operations which ultimately led to the expulsion of the P.L.O. from Jordan. After the expulsion of the P.L.O. from Jordan, Lebanon became the center of Palestinian operations against Israel. As a result of guerrilla activities directed against Israel by Palestinian organizations operating out of Lebanon, Israel countered by making reprisal raids, principally in southern Lebanon. These raids drove significant portions of the predominantly Shi’ite population to urban areas, principally Beirut, and exacerbated the problems of poverty in and around the capital. The reprisal raids also drove an increasing number of Palestinians into Lebanon and north to Beirut. The influx of Palestinians was opposed by the Maronites and many Sunni Moslems who feared that the Palestinian immigrants would be mobilized into an active force in Lebanese politics. Moslem and Christian nationalists opposed the presence of the Palestinians because they were seen as an affront to Lebanese sovereignty. The Lebanese government was unable to oppose effectively the Israeli military power or to expel the P.L.O. militias as had been done in Jordan, because of the possibility of censure by other Arab countries and because of the support to the P.L.O. within the Moslem populace and the lower ranks of the army. (f) Syria Syria borders Lebanon on the north and east. It is ruled by the Ba’ath Party, which at the pertinent times was “run by the Alamite,” a “break-away Shia sect.” Syria’s president was Hafez Assad, a “pragmatic ... leader who had brought stability to his country after twenty years of upheavals.” Syria was hostile to Israel, and critical of Egyptian president Sadat’s accommodation with that nation in 1975. The Israelis, in turn, “have made of the Syrians a kind of special devil.” Syria’s relations with the Palestinians play an important part in events. Prior to 1973, “the Syrians saw in the Palestinians a useful irregular arm of their own power, and so supported and supplied them, while at the same time trying to exert control through their domination of Saiqa, militarily the most powerful of the commando groups, which was under the direct orders of Syrian Army Intelligence.” But disenchantment with Egypt caused Syria’s president Assad to think in terms of “the leadership of the whole Arab world.” This concept necessitated a Palestinian presence in Lebanon subject to Syrian control. The steps Syria took to implement that policy are discussed infra. (g) Israel Israel is Lebanon’s southern neighbor. At the pertinent times, Palestinian commandoes frequently raided Israeli settlements from bases in southern Lebanon. Israel would retaliate vigorously. One commentator suggests that Israel’s attacks upon southern Lebanon, which did more harm to the relatively impecunious Shia inhabitants of the area than to the mobile Palestinians, were intended to polarize the factions in Lebanon, to the ultimate disadvantage of the Palestinian presence there. Be that as it may, the strife on the Lebanese-Israeli border and the inability of the Lebanese Army to control the Palestinians or protect the Shia population from the Israelis constituted another source of growing unrest. VII. The Events of 1975 and 1976 Having considered the parties, organizations, persons, and nations involved, let us return to the events of 1975 and 1976. The attitudes and objectives of the identifiable interests appear clearly from the evidence. As for the Christian right — I use these labels faute de mieux, although they are not as precise as they sound — its main purpose was the preservation of the status quo. That is perhaps understandable, since the National Pact of 1943 gave the Christians the presidency of the Republic and a six-to-five parliamentary majority in perpetuity. Over the succeeding years, “the Maronites in particular and the Christians in general had amassed a disproportionate share of the country’s capital ...” The Christian factions also had the subsidiary aim of controlling or expelling the Palestinians, since “if the Palestinians were not subjugated quickly, they would provide the muscle which the growing Leftist movement lacked.” The Palestinian presence became a particular concern of the Phalange.’ Bulloch in his deposition testimony summarized the position of the right-wing groups: “Q Did the Right announce any positions? “A Their stated aims again were made at press conferences which I attended, and interviews, and publications. “They wanted to establish the authority of the state by which they meant they don’t want to have the Palestinians as the state within the state in Lebanon, as they saw it, and also opposed the Left-wing aims and wanted to maintain the status quo, that is, to continue the confessional system and to continue to have a Christian as the president of the country.” Dep. at 141. As for the left-wing groups, Bulloch testified: “The Left-wing grouping announced several times, including by Jumblatt himself, in the press conference that I attended, that they wanted an overall change in the system of government in Lebanon, that they wanted to change the National Covenent, [sic] and in particular they wanted to alter the provision that the president should also be a Christian and they wanted to alter the six to five ratio. “Various things like that. “They wanted to enlarge the parliament to be divided equally between Christian and Moslem deputies to get away from the system of direct representation of various religious groups.” Dep. at 140-41. The basic purpose of the Palestinians in Lebanon was also described by Bulloch in his deposition testimony: “Q Did the Palestinians voice any positions as to conditions in Lebanon? “A The Palestinians’ aim was to be allowed to carry on as they had been doing before in Lebanon. They didn’t want to be involved in a war there. “Their aim was to, their stated aim was to be allowed to go back to their homeland to establish their own state, and Palestinian leaders said on many occasions that they didn’t want to be diverted from that by having to fight their Arab brothers in any other countries.” Dep. at 143. Bulloch expands on the Palestinians’ situation in Death of a Country, a useful discussion that I quote at some length: “The Palestinians, for their part, had no real desire to fight in Lebanon.' Their leaders realized that the diplomatic gains of the past could all be lost if they became embroiled in Lebanese domestic politics or bogged down in a costly war. The Lebanon was not their home, nor did they want it as a new homeland. They were committed to the idea of returning to Palestine, of establishing a state there. To do that, they had to have a base and they knew very well that Lebanon was the last place left open to them. They had been brutally expelled from Jordan five years earlier, and the memories of that savage experience were still vivid. They had to preserve their one safe haven and they had to show that they could not be dominated or suppressed by anyone, least of all by the weak Lebanese State or the unofficial Phalangist Party.” Pp. 41-42. The positions of Syria and Israel have already been described. Syria opposed Israel, sensed its own star rising in the Arab world, and sought to control the Palestinians in Lebanon. In addition, Syria wished Lebanon to remain a base of operations for the P.L.O. because Syria did not want the P.L.O. operating from its own territory. Israel sought to protect its northern boundary, and to discomfit the Palestinians in Lebanon. These were the motivating attitudes of those involved with Lebanon at the beginning of 1975. Two additional factors are particularly worth noting. The first is that there were wide differences of opinion and allegiance between the groups which heretofore have been listed under the labels “right” or “left.” The use of those labels derives from an almost inevitable journalistic or political shorthand; but they should not obscure the substantial degree of fragmentation in beliefs and objectives. A number of trial witnesses attest to this reality, which was particularly true of the interests on the left. Of those interests, Lu-den George said: “In order to achieve this change of system, there was a whole variety, a spectrum of positions, which went from reform with muscle to pure revolution.” Dep. at 22. And Bulloch, testifying at his deposition, described as accurate an article which he dispatched from Beirut on August 11, 1976, in which he wrote: “On the Left the Palestinians are hopelessly split. The major group within the Palestine Liberation Organization, Fatah, would be willing to try to reach a compromise. But the organizations of the so-called Rejection Front want no negotiations at all, and in Beirut one man with a gun wrecks any cease fire. The left-wing alliance led by Mr. Kamal Jumblatt is just as divided. Mr. Jumblatt himself is a Druze, feudal landowner and clan chieftain bent on destroying the very system which allows him to exercise power.... Lebanon has always been a collection of feudal fiefdoms rather than a homogeneous state and even in the pseudo-sophistication of Beirut each neighborhood owed its allegiance to a family or a party rather than to a government.” Dep. at 270-271. A second significant factor had to do with the particular right-wing response to left-wing suggestions of political reform. That reaction was extreme, and fed in large measure upon fear. Thus Randal testifi