AL BUHAIRA NATIONAL INSURANCE COMPANY v ARAB WAR RISKS INSURANCE SYNDICATE [2025] DIFC CFI 013 — Refusal of permission to appeal and stay of execution (27 November 2025)

This order addresses the post-judgment landscape in a complex reinsurance dispute, clarifying the stringent requirements for obtaining a stay of execution and the threshold for permission to appeal within the DIFC Courts.

What is the specific dispute between Al Buhaira National Insurance Company and Arab War Risks Insurance Syndicate regarding the AED 4,563,051.74 costs order?

The litigation concerns a reinsurance contract dispute where the Claimant, Al Buhaira National Insurance Company (ABNIC), sought an indemnity from the Defendant, Arab War Risks Insurance Syndicate (AWRIS), for costs incurred in defending underlying claims brought by Horizon Energy LLC and Al Buhaira International Shipping Inc. Following the Court’s judgment on 9 September 2025, which ordered the Defendant to pay the Claimant’s costs, the Defendant sought to forestall enforcement.

The Defendant’s application for a stay of execution was predicated on a proposal to secure the judgment sum. As noted in the Court’s records:

The Defendant seeks a stay on enforcement of paragraph 3 of the Order dated 9 September 2025 subject to the Defendant paying the judgment sum of AED 4,563,051.74 into an interest bearing client account of Pinsent Masons LLP within 28 days of any order, to be held by Pinsent Masons LLP until further order of the DIFC Court of Appeal.

This request followed the Court’s initial order:

(3) The Defendant shall pay to the Claimant its costs of the proceedings, immediately assessed in the sum of AED 4,563,051.74 within 14 days of the date of this Judgment.

The dispute highlights the tension between a successful party’s right to immediate enforcement of a costs order and a losing party’s desire to preserve the status quo pending an appeal. Further details on the initial reinsurance governing law dispute can be found in AL BUHAIRA NATIONAL INSURANCE COMPANY v ARAB WAR RISKS INSURANCE SYNDICATE [2024] DIFC CFI 013 — Reinsurance governing law and stay application (06 August 2024).

Which judge presided over the application for permission to appeal and the stay of execution in CFI 013/2024?

H.E. Justice Michael Black KC presided over the applications in the Court of First Instance. The order was issued on 27 November 2025, following a procedural history that included the filing of various appeal notices and stay applications throughout September and October 2025.

What arguments did the parties advance regarding the financial stability of Al Buhaira National Insurance Company and the necessity of a stay?

The Defendant, AWRIS, argued that a stay was necessary due to the Claimant’s alleged financial instability. Counsel for the Defendant highlighted specific losses to suggest that the Claimant might be unable to repay the costs if the appeal were successful.

Mr Hammond points to:
Year ended 31 December 2023
(1) The Claimant suffered a loss in its core insurance income of AED 139,579,145.

Conversely, the Claimant maintained its financial viability, pointing to its current profit margins to rebut the assertion that there was a real risk of non-recovery. The Claimant’s position was supported by financial data submitted to the Court:

The Claimant’s total profits before tax at the end of the second quarter of 2025 are AED 25.6 million.

The Defendant also challenged the costs order itself, arguing that the Claimant was not the "successful party" in the litigation, despite the Court’s earlier ruling on the implied term of the reinsurance contract.

What was the jurisdictional and procedural question regarding the determination of the applications without a hearing?

The Court had to determine whether it was appropriate to decide the four pending applications—the Claimant’s PTA, the Defendant’s PTA, the Defendant’s Stay Application, and the Claimant’s Cross-Appeal PTA—on the papers. The procedural timeline was set by the Court:

On 29 October 2025, I directed that I would determine all four applications without a hearing following the service of the Defendant’s submissions in reply to the Claimant’s Cross-Appeal PTA Application due on 11 November 2025.

The legal issue centered on whether the parties had been afforded sufficient opportunity to address the Court and whether the applications were ripe for determination under the Rules of the DIFC Courts (RDC).

How did H.E. Justice Michael Black KC apply the test for a stay of execution and permission to appeal?

In refusing the stay, the Court emphasized that a stay of execution is not the default position and requires the applicant to demonstrate a "real risk of non-recovery." The Court found that the Defendant failed to meet this threshold, noting that the Claimant’s financial position, while showing losses, did not equate to an inability to repay the judgment sum.

Regarding the permission to appeal, the Court applied the "real prospect of success" test. The Court found the grounds of appeal lacked merit, particularly regarding the interpretation of the reinsurance contract and the costs award. As noted in the reasons:

For the foregoing reasons and for the reasons set out at paragraphs 14 to 16 of the Defendant’s submission in opposition to the Claimant’s application dated 20 October 2025, I refuse Permission to Appeal on the first proposed ground.

The Court also addressed the Defendant’s challenge to the costs order:

Proposed ground 4 is a criticism of the decision on costs. The Defendant submits that the Claimant was not the successful party in the litigation.

The Court ultimately dismissed the Defendant's argument, maintaining that the costs order was appropriate.

Which RDC rules and legal authorities were applied to the assessment of the stay and appeal applications?

The Court relied on RDC 44.19, 44.75, and 44.4 in managing the appeal process and the cross-appeal applications. The Court’s approach to the stay application was guided by established DIFC jurisprudence, specifically Taaleem P.J.S.C. v National Bonds Corporation P.J.S.C [2010] DIFC CFI 014, which places the burden on the applicant to provide good grounds for a stay, and Tarig H.A.G. Rahamtalla v Expresso Telecom Group Ltd (CFI 069/2020), which confirms that a stay is not the default rule.

How did the Court utilize English and DIFC precedents in its reasoning?

The Court utilized Al Rihab Real Estate Company LLC v Emirates NBD Bank PJSC [2020] DIFC CA 006 to guide its discretion regarding appeals. In considering the broader implications of the reinsurance indemnity, the Court referenced principles consistent with Wasa International Insurance Co Ltd v Lexington Insurance Co [2010] 1 AC 180. The Court also addressed the potential for future enforcement, noting:

That would surely extend to any proceedings in Sharjah and this Court would likely grant immediate judgment on any claim by the Claimant to enforce the indemnity.

This reasoning underscores the Court's view on the enforceability of its judgments and the limited scope for challenging them through stay applications based on speculative financial risk.

What was the final disposition of the applications and the status of the costs order?

The Court dismissed both the Claimant’s and the Defendant’s applications for permission to appeal. Furthermore, the Defendant’s application for a stay of execution was dismissed. Consequently, the costs order of AED 4,563,051.74 remains enforceable. The Court reserved all matters of costs to the Court of Appeal, should the parties choose to renew their applications there, while granting permission to revert to the Court of First Instance if the appeal is discontinued.

What are the practical implications for litigants seeking a stay of execution in the DIFC Courts?

This judgment reinforces the high threshold for obtaining a stay of execution pending appeal. Practitioners must note that financial difficulty, even when documented, is insufficient to justify a stay unless the applicant can prove a real risk that the respondent will be unable to repay the judgment sum if the appeal succeeds. The Court’s refusal to grant permission to appeal on the grounds presented also highlights the difficulty of challenging discretionary costs orders and findings of fact in the DIFC Courts. Litigants should anticipate that the Court will prioritize the immediate enforceability of its judgments unless compelling evidence of non-recovery risk is provided.

Where can I read the full judgment in Al Buhaira National Insurance Company v Arab War Risks Insurance Syndicate [2025] DIFC CFI 013?

Full judgment available at the DIFC Courts website or via the CDN link.

Cases referred to in this judgment:

Legislation referenced:

• Rules of the DIFC Courts (RDC): RDC 44.4, RDC 44.19, RDC 44.75, RDC 44.76, RDC 44.80