The DIFC Court of First Instance has clarified the stringent requirements for expert independence in complex insurance litigation, ruling that experts previously engaged in concurrent onshore proceedings are ineligible to provide evidence in DIFC proceedings.
What is the core dispute between Union Insurance Company and International Precious Metals Refiners regarding the insurance policy?
The litigation concerns a high-stakes insurance dispute where the Claimant, Union Insurance Company PJSC, seeks to avoid a policy issued to the Defendant, International Precious Metals Refiners LLC. The central conflict revolves around allegations of material non-disclosure and fraudulent claims. Specifically, the Claimant asserts that the Defendant’s Managing Director failed to disclose a prior charge of dishonesty (forgery) in Abu Dhabi, which the Claimant argues was a material fact under Clause 6 of the Policy.
The Claimant further contends that the Defendant’s claim under the policy was fraudulent, thereby rendering the entire policy void. In the alternative, the Claimant argues that the Defendant breached its duty of good faith. The Defendant vehemently denies these allegations, maintaining that the prior offence was irrelevant to the underwriting risk and that the disclosure was outside the scope of Clause 6. As noted in the court documents:
The Defendant denies this breach as its position is that disclosing the offence is outside the scope of Clause 6 as the offence, charge and conviction were not relevant to the cover and underwriting risk.
The dispute also encompasses technical disagreements regarding the volume of gold and stock records, necessitating forensic accounting and metal refinery expertise to determine if the policy cover actually attached at the time of the alleged loss.
Which judge presided over the Expert Applications in CFI 064/2022 and in which division of the DIFC Courts?
The Expert Applications were heard and determined by H.E. Justice Shamlan Al Sawalehi, sitting in the DIFC Court of First Instance. The order was issued on 20 March 2025, following the consideration of applications filed by both parties in January and February 2025.
What were the specific arguments advanced by Union Insurance Company and International Precious Metals Refiners regarding the need for expert evidence?
The Claimant, Union Insurance Company, argued that expert evidence was essential to resolve the technical and underwriting issues central to the case. They sought permission to adduce evidence on underwriting materiality, forensic accounting regarding stock records, and the metal refinery process. As detailed in the court record:
This application was filed by the Claimant on 24 January 2025 seeking permission for an order to be granted to allow the Claimant to adduce and rely on: (a) Underwriting expert evidence regarding the issue of materiality.
The Claimant emphasized that the necessity of this evidence was largely agreed upon in principle during the Case Management Conference held on 5 December 2024. Conversely, the Defendant, International Precious Metals Refiners, also sought to engage its own experts. The Defendant’s position was that the complexity of the refinery operations and the forensic accounting required to verify the alleged gold losses necessitated independent expert analysis to counter the Claimant's assertions.
What was the precise doctrinal issue the Court had to resolve regarding the appointment of experts?
The Court was tasked with determining whether the proposed experts met the threshold of independence required by the Rules of the DIFC Courts (RDC) and whether the evidence was "reasonably required" to resolve the dispute. The doctrinal challenge was not merely whether expert evidence was needed—as both parties agreed it was—but whether experts who had already been involved in related proceedings in the Sharjah Courts could maintain the requisite impartiality to testify in the DIFC. The Court had to balance the need for expert assistance in complex insurance matters against the overriding objective of ensuring that expert evidence is provided by individuals who are not compromised by prior involvement in concurrent litigation.
How did H.E. Justice Shamlan Al Sawalehi apply the test for expert independence in this order?
Justice Al Sawalehi applied the test of independence by scrutinizing the prior engagements of the Claimant’s proposed experts, Mr. Clive Burrows and Dr. Michael Mooiman. While the Court acknowledged that the subject matter—underwriting, forensic accounting, and metal refinement—was indeed beyond the Court’s natural understanding, it found that the experts' prior involvement in the Sharjah Court proceedings created a conflict that undermined their independence.
The Court reasoned that allowing these specific experts to testify would be inconsistent with the RDC and the overriding objective of the Court. Consequently, the Court granted the applications for expert evidence in principle but imposed a strict condition that the Claimant must appoint new, independent experts. As stated in the order:
I also accept that it would be contrary to the rules surrounding expert evidence and the overriding objective to permit the Claimant to rely on the reports of Mr Burrows and Dr Mooiman; new experts will have to be engaged, subject to RDC Part 31.
Which specific RDC rules and procedural authorities were applied by the Court in CFI 064/2022?
The Court primarily relied on RDC 31.12, which governs the use of expert evidence. This rule mandates that expert evidence must be restricted to that which is "reasonably required" to resolve the proceedings. Justice Al Sawalehi utilized this rule to confirm that while the types of expertise requested (underwriting, forensic accounting, and metal refinery) were necessary, the selection of the experts remained subject to the Court’s oversight regarding independence. The Court also referenced the Case Management Order of H.E. Justice Maha Al Mheiri dated 15 January 2025, which set the stage for the subsequent expert applications.
How did the Court utilize the parties' prior agreements in its reasoning?
The Court noted that the parties had already reached a consensus on the necessity of expert evidence during previous procedural steps. Specifically, the Court highlighted that the necessity of underwriting evidence was agreed upon during the Case Management Conference on 5 December 2024. Furthermore, the Court referenced the Defendant's agreement regarding the need for forensic and refinery experts:
(g) On 9 January 2024, in response to the Claimant’s letter dated 31 December 2024, the Defendant agreed that a forensics and metals refinery expert is reasonably required.
By citing these agreements, the Court streamlined its reasoning, focusing its decision on the suitability of the specific individuals proposed rather than the necessity of the evidence itself.
What was the final disposition of the Expert Applications and the order regarding costs?
The Court granted both the Claimant’s and the Defendant’s Expert Applications. However, this was subject to the critical condition that the Claimant must engage new experts to replace Mr. Burrows and Dr. Mooiman. The Court’s order effectively permitted the parties to proceed with expert evidence on the disputed matters of underwriting, forensic accounting, and metal refinement, provided they comply with RDC Part 31. Regarding costs, the Court ordered that costs shall be "costs in the case," meaning the ultimate liability for these costs will be determined at the conclusion of the trial.
What are the wider implications of this order for practitioners in DIFC insurance litigation?
This order serves as a stern reminder that the DIFC Courts will strictly enforce the independence of expert witnesses, particularly in cases involving concurrent litigation in onshore UAE courts. Practitioners must ensure that any expert proposed for a DIFC proceeding has not been compromised by prior roles in related disputes elsewhere. Failure to ensure this independence at the outset can lead to the rejection of the expert, causing significant delays and additional costs. Litigants should anticipate that the Court will prioritize the integrity of the expert evidence over the convenience of retaining experts who are already familiar with the underlying facts of the case.
Where can I read the full judgment in Union Insurance Company PJSC v International Precious Metals Refiners LLC [2025] DIFC CFI 064?
The full order can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0642022-union-insurance-company-pjsc-v-international-precious-metals-refiners-llc-9
Cases referred to in this judgment:
| Case | Citation | How used |
|---|---|---|
| Al Buhaira National Insurance Company v Horizon Energy LLC | CFI-098-2021 | Referenced in the context of the Defendant's Stay Application. |
Legislation referenced:
- RDC Part 31 (Expert Evidence)
- RDC 31.12 (Restriction on expert evidence)