This order addresses the procedural status of insurance indemnity claims brought by Five Holding and its subsidiaries, confirming that DIFC Court proceedings must remain stayed when a genuine jurisdictional conflict is pending before the Joint Judicial Tribunal (JJT).
What was the specific monetary value and nature of the insurance dispute between Five Holding and Orient UNB Takaful?
The litigation concerns claims for indemnity arising from business interruption losses allegedly caused by the COVID-19 pandemic. The Claimants, Five Holding Limited and its related entities, sought to recover significant sums under insurance policies issued by the Defendants, Orient UNB Takaful PJSC and Qatar Insurance Company. The dispute centers on the rejection of these claims by the Insurance Disputes Committee, leading the Claimants to initiate proceedings in the DIFC Courts to challenge those rejections.
The financial stakes are clearly defined by the policy limits. As noted in the court's reasoning:
In each action the claimant challenged the resolution of the Insurance Disputes Committee to reject the claim for indemnity for losses suffered by reason of pandemic related business interruptions. Each claim was for a total of AED25 million (being the limit of indemnity under each policy).
The Claimants’ formal prayer for relief sought to enforce these policy limits through the DIFC Court, framing the request as both a contractual entitlement and a claim for damages. As specified in the court record:
On each Claim Form, the remedy sought by the Claimants includes:
To order the Respondent (sic defendant) to pay an amount of AED25 million (or such other sum as the Court finds due) in favour of the Claimants as the stipulated insurance coverage under the Policy and/or as damages for breach of the terms of that policy.
Which judge presided over the application to lift the stay in CFI 027/2021 and CFI 028/2021?
Justice Wayne Martin presided over the Court of First Instance hearing held on 1 July 2021, issuing the final order and reasons on 4 August 2021. The applications sought to set aside earlier stay orders granted by H.E. Justice Omar Al Muhairi on 14 April 2021.
How did the Claimants and Defendants argue the necessity of the stay in light of the Lakhan v Lamia precedent?
The Claimants, represented by the same legal counsel across both actions, argued that the stays imposed by Justice Al Muhairi should be lifted. Their primary contention was that the criteria established in Lakhan v Lamia for maintaining a stay were not satisfied. They argued that the mere existence of parallel proceedings in the onshore Dubai Courts did not automatically necessitate a stay of the DIFC proceedings, particularly where the Claimants had attempted to abandon or withdraw from the onshore actions.
Conversely, the Defendants argued that a clear conflict of jurisdiction existed because both the DIFC Courts and the Dubai Courts were effectively exercising jurisdiction over the same subject matter—the appeal of the Insurance Disputes Committee’s decision. They maintained that the JJT was the only competent body to resolve this conflict and that the DIFC Court was required to defer to the JJT’s authority to prevent inconsistent judgments. The Defendants emphasized that the JJT process was already engaged and that the DIFC Court lacked the authority to unilaterally determine the jurisdictional priority while the matter was sub judice before the JJT.
What was the precise jurisdictional question the DIFC Court had to answer regarding the JJT referral?
The Court was tasked with determining whether a "conflict of jurisdiction" existed within the meaning of the relevant legal framework, thereby justifying the continuation of a stay of proceedings. The doctrinal issue was whether the DIFC Court retains the discretion to lift a stay once it has been referred to the JJT, or if the referral itself mandates a pause until the JJT issues a definitive ruling on which court is competent to hear the dispute. The court had to decide if the Claimants' attempts to withdraw from the onshore Dubai proceedings effectively extinguished the "conflict" that had triggered the initial stay.
How did Justice Wayne Martin apply the doctrine of jurisdictional conflict to the Five Holding applications?
Justice Martin reasoned that the JJT’s authority is triggered by the existence of competing claims in different court systems, regardless of whether one party attempts to unilaterally exit one of those systems after the fact. He emphasized that the JJT is designed to act as a gatekeeper to prevent the risk of contradictory rulings. The court’s reasoning focused on the necessity of the JJT’s intervention to resolve the impasse definitively.
As Justice Martin explained regarding the scope of the JJT’s authority:
On any translation of the Decree it is clear that the JJT is given jurisdiction to intervene prior to the point of inconsistent or contradictory judgments having been reached.
He further clarified that once the JJT is seized of the matter, the DIFC Court must defer to that process:
It follows that the jurisdiction of the JJT under Article 4 of the Decree is engaged and the question of which of the Courts should proceed to exercise jurisdiction was properly referred to the JJT.
Which specific statutes and rules did the court cite in determining the validity of the stay?
The court relied heavily on Dubai Decree No. 19 of 2016, which established the Joint Judicial Tribunal (JJT). Justice Martin referenced the Decree’s provisions regarding the JJT’s power to intervene in jurisdictional conflicts between the DIFC Courts and the onshore Dubai Courts. Additionally, the court considered Article 5A(i)(a) of the Judicial Authority Law, which defines the jurisdiction of the DIFC Courts, though the primary focus remained on the procedural interplay between the DIFC Court and the JJT. The court also referenced the specific procedural requests made to the JJT, noting:
Each application requests the JJT to “identify the court which has jurisdiction to consider the case filed by the respondent against the appellant regarding the appeal of the decision issued by” … the Insurance Disputes Committee.
How did the court utilize the precedent of Lakhan v Lamia in its decision-making process?
The court used Lakhan v Lamia as the primary benchmark for determining when a stay is appropriate. While the Claimants attempted to use Lakhan to argue that the stay should be lifted because the conditions for a conflict were no longer present, Justice Martin distinguished the case. He clarified that Lakhan requires a genuine conflict of jurisdiction to exist, but he found that such a conflict was indeed present in the Five Holding matters. By applying the Lakhan test, the court concluded that the mere existence of an application to the JJT was not the sole trigger; rather, the substantive overlap of the proceedings in both the DIFC and Dubai Courts necessitated the stay until the JJT could provide a final determination.
What was the final disposition and the order regarding costs in CFI 027/2021 and CFI 028/2021?
The court dismissed both applications to set aside the stays. Consequently, the proceedings in both CFI 027/2021 and CFI 028/2021 remain stayed pending a decision from the JJT. Regarding costs, the court ordered the Claimants to bear the financial burden of the unsuccessful applications. The order stated:
The Claimants in CFI-027-2021 shall pay the Defendant’s costs of the First Application to be assessed by a Registrar if not agreed within 14 days of publication of these reasons.
A mirror order was issued for the second application, ensuring that the Defendants were indemnified for the costs incurred during the attempt to lift the stays.
What are the wider implications of this decision for DIFC practitioners handling insurance disputes?
This ruling reinforces the principle that the DIFC Court will strictly adhere to the JJT process when there is a genuine risk of jurisdictional overlap with the onshore Dubai Courts. Practitioners must anticipate that once a matter is referred to the JJT, the DIFC Court will be highly reluctant to intervene or lift a stay, even if the claimant attempts to withdraw from the competing onshore proceedings. The decision signals that the DIFC Court views the JJT as the final arbiter of jurisdictional priority and will not allow parties to "forum shop" by unilaterally abandoning one set of proceedings to force a change in the jurisdictional landscape. Litigants should be prepared for prolonged stays in cases involving insurance disputes where the underlying policy or regulatory decision is being contested in both the DIFC and Dubai Courts.
Where can I read the full judgment in Five Holding v Orient Unb Takaful [2021] DIFC CFI 027/2021?
The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-027-2021-and-cfi-028-2021-1-five-holding-limited-2-five-hotel-jumeirah-village-llc-v-orient-unb-takaful-pjsc-and-1-five-hold
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Lakhan v Lamia | [2021] DIFC CA 002 | Established the test for when a stay is required due to a conflict of jurisdiction. |
Legislation referenced:
- Dubai Decree No. 19 of 2016 (The Decree)
- Judicial Authority Law, Article 5A(i)(a)