What is the underlying factual dispute between Al Buhaira National Insurance Company and Arab War Risks Insurance Syndicate regarding the USD 70m indemnity claim?
The litigation arises from a complex reinsurance dispute involving Al Buhaira National Insurance Company (ABNIC) and the Arab War Risks Insurance Syndicate (AWRIS). The core of the conflict concerns whether ABNIC is entitled to indemnity from AWRIS under a reinsurance contract following a massive claim filed by a third party, Horizon, against ABNIC. The financial stakes are significant, with the original claim reaching USD 70m. The procedural history is marked by parallel litigation in the Sharjah courts, which has complicated the determination of liability and the scope of declaratory relief sought by the parties.
The dispute gained momentum when the underlying claimant sought to enforce its rights through regulatory channels. As noted in the record:
On 7 November 2021, Horizon filed a complaint with the UAE Insurance Authority pursuant to Article 110 of Federal Law no. 6 of 2007 (as amended) claiming it was entitled to indemnity from ABNIC in the amount of USD 70m.
This was followed by active litigation in the local courts:
On 7 July 2022, Horizon commenced proceedings against the Claimant in the Sharjah Court of First Instance (the “Horizon Sharjah proceedings”).
ABNIC now seeks to clarify its indemnity position through the DIFC Courts, while AWRIS contests the scope of its contractual obligations. See 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 appellate applications in the DIFC Court of First Instance regarding the Al Buhaira v Arab War Risks Insurance Syndicate matter?
The order dated 4 March 2026 was issued by H.E. Chief Justice Wayne Martin. The proceedings were conducted within the Court of First Instance, acting in an appellate capacity regarding the permission to appeal applications, following the initial refusal of such permission by H.E. Justice Michael Black KC in his judgment dated 9 September 2025 and subsequent order dated 27 November 2025.
What were the specific legal arguments advanced by Al Buhaira National Insurance Company and Arab War Risks Insurance Syndicate regarding the appeal and security for costs?
ABNIC argued for permission to appeal the first-instance judgment, asserting that there were substantial grounds to challenge the lower court's findings on the interpretation of the reinsurance contract and the refusal of declaratory relief. Crucially, ABNIC also moved to adduce additional evidence, citing the evolving nature of the parallel Sharjah proceedings. ABNIC maintained that this evidence was essential for a just resolution of the indemnity dispute.
Conversely, AWRIS opposed the appeal on several grounds, arguing that the lower court’s findings were robust. AWRIS specifically sought an order for security for costs, contending that ABNIC should be required to provide financial assurance for the appeal's duration. AWRIS argued that the dispute over indemnity was essentially hypothetical or premature given the ongoing Sharjah litigation. However, ABNIC countered this by highlighting the concrete nature of the liability exposure, a point the court acknowledged:
AWRIS further submits that the question is not hypothetical – there are currently proceedings on foot in Sharjah in which Horizon asserts its entitlement to indemnity from ABNIC pursuant to the underlying policies. There is a real and present dispute with respect to that issue.
What was the precise doctrinal question the court had to answer regarding the threshold for granting permission to appeal?
The Court of Appeal was tasked with determining whether the parties met the threshold of having a "real prospect of success" to justify an appeal. This required the court to interpret the standard for appellate intervention where the initial judge had already denied leave. The court had to balance the finality of the first-instance judgment against the need to correct potential errors in the application of insurance law principles, specifically regarding non-disclosure, misrepresentation, and the timing of notice under the reinsurance contract.
How did Chief Justice Wayne Martin apply the "real prospect of success" test to the parties' applications?
Chief Justice Martin clarified that the threshold for granting permission to appeal does not require a high degree of certainty, but rather a standard that avoids purely speculative challenges. The court emphasized that the test is one of realism. As stated in the judgment:
It is established that “real” in the context of an assessment of the prospects of success means realistic rather than fanciful, applying the same test as is applied in an application for immediate judgment.
Applying this, the court granted ABNIC’s application in full, finding that its grounds for appeal met this realistic threshold. For AWRIS, the court took a more surgical approach, granting permission only on specific grounds while dismissing others. The court reasoned that certain aspects of AWRIS’s appeal—specifically those related to non-disclosure and the timing of notice—lacked the necessary realistic prospect of success to proceed.
Which specific statutes and RDC rules were applied by the court in determining the admissibility of additional evidence and the management of the appeal?
The court relied on Part 44 of the Rules of the DIFC Courts (RDC), specifically RDC 44.5 and RDC 44.19, which govern the criteria for appellate review and the management of appeals. Additionally, the court exercised its discretion under RDC 44.114 to permit the introduction of new evidence. The court also referenced Article 110 of Federal Law no. 6 of 2007 (as amended) regarding the regulatory framework of the UAE Insurance Authority, which provided the backdrop for the underlying dispute between the parties and the third-party claimant, Horizon.
How did the court utilize English case law precedents in its reasoning for the Al Buhaira v Arab War Risks Insurance Syndicate order?
The court drew upon established English jurisprudence to frame the principles of declaratory relief and the threshold for appellate intervention. Cases such as Gouriet v Union of Post Office Workers and Pavledes v Hadjisavva were utilized to contextualize the court's power to grant declarations in the face of ongoing parallel proceedings. Furthermore, the court looked to AXA SA v Genworth Financial International Holdings Inc and Milebush Properties Ltd v Tameside Metropolitan Borough Council to guide its discretion in managing the appeal and assessing the merits of the arguments presented by both ABNIC and AWRIS. These precedents served to reinforce the court's authority to ensure that the appeal process remains focused on substantive legal errors rather than procedural delays.
What was the final outcome of the applications, including the disposition of the security for costs and the permission to appeal?
The court granted ABNIC’s permission to appeal on all grounds and allowed its supplementary appeal application. AWRIS was granted permission to appeal only on specific, limited grounds, while its other grounds were dismissed. Crucially, the court granted ABNIC’s request to introduce new evidence:
The Claimant’s Application is granted, and extends to additional evidence of the same character which comes into existence between now and the hearing of the appeal.
The court also dismissed AWRIS’s application for security for costs, noting that there was no risk of injustice to the defendant. The court ordered that:
The appeal will be case managed as one appeal, on the basis that the Claimant is the Appellant and the Defendant is the Respondent and that all obligations and responsibilities under the Rules of Court are allocated accordingly.
What are the wider implications of this ruling for practitioners dealing with reinsurance disputes and appellate case management in the DIFC?
This ruling signals a flexible approach by the DIFC Court of Appeal toward the admission of fresh evidence in complex, multi-jurisdictional insurance disputes. By allowing evidence that may come into existence between the order and the final hearing, the court has signaled that it prioritizes the completeness of the factual record over strict procedural rigidity, provided the evidence is relevant to the ongoing dispute. Practitioners should anticipate that the "real prospect of success" test will be applied with a focus on "realistic" rather than "fanciful" arguments, and that security for costs applications in the appellate context will face a high bar, particularly where the defendant's substantive defense is perceived as weak.
Where can I read the full judgment in Al Buhaira National Insurance Company v Arab War Risks Insurance Syndicate [2026] DIFC CFI 013?
The full text of the order is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0132024-al-buhaira-national-insurance-company-v-arab-war-risks-insurance-syndicate-3 or via the CDN: https://littdb.sfo2.cdn.digitaloceanspaces.com/litt/AE/DIFC/judgments/court-first-instance/DIFC_CFI-013-2024_20260304.txt.
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Rolls Royce Plc v Unite the Union | [2009] EWCA Civ 387 | Principles of contract interpretation |
| Milebush Properties Ltd v Tameside Metropolitan Borough Council | [2011] EWCA Civ 278 | Declaratory relief scope |
| AXA SA v Genworth Financial International Holdings Inc | [2015] EWCA Civ 1119 | Appellate threshold |
| Pavledes v Hadjisavva | [1961] Ch 129 | Declaratory relief |
| Gouriet v Union of Post Office Workers | [1978] AC 435 | Declaratory relief |
Legislation referenced:
- Rules of the DIFC Courts (RDC): Part 44, RDC 44.5, RDC 44.19, RDC 44.114
- Federal Law no. 6 of 2007 (as amended): Article 110