November 27, 2025 court of first instance - Orders
Claim No: CFI 013/2024
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
AL BUHAIRA NATIONAL INSURANCE COMPANY
Claimant
and
ARAB WAR RISKS INSURANCE SYNDICATE
Defendant
ORDER WITH REASONS OF H.E. JUSTICE MICHAEL BLACK KC
UPON the Judgment of H.E. Justice Michael Black dated 9 September 2025 (the “Judgment”)
AND UPON the Claimant’s Appeal Notice dated 26 September 2025 seeking permission to appeal the Judgment (the “Claimant’s PTA Application”)
AND UPON the Defendant’s Appeal Notice dated 30 September 2025 seeking permission to appeal the Judgement (the “Defendant’s PTA Application”)
AND UPON the Defendant’s Application No. CFI-013-2024/5 dated 30 September 2025 seeking a stay of the decision of the lower Court until the appeal is determined (the “Defendant’s Stay Application”)
AND UPON the Claimant’s Appeal Notice dated 21 October 2025 seeking permission to appeal on an additional ground should the Defendant be granted permission to appeal (the “Claimant’s Cross-Appeal PTA Application”)
AND UPON the Rules of the DIFC Courts (“RDC”)
IT IS HEREBY ORDERED THAT:
1. The Claimant’s PTA Application, the Defendant’s PTA Application, and the Defendant’s Stay Application are dismissed.
2. No order is made on the Claimant’s Cross-Appeal PTA Application.
3. On the assumption that the parties will renew their applications before the Court of Appeal, all matters of costs are reserved to the Court of Appeal. Should any appeal be discontinued before reaching the Court of Appeal, the parties have permission to revert to the Court of First Instance.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 27 November 2025
At: 11am
SCHEDULE OF REASONS
Introduction
1. On 9 September 2025, I gave judgment ordering and declaring that:
(1) It is an implied term of the Reinsurance Contract made between the Claimant and the Defendant that the Defendant is liable to indemnify the Claimant against costs and expenses properly incurred in defending claims brought by or against Horizon Energy LLC and Al Buhaira International Shipping Inc arising out of or in connection with Marine Hull War Policy No.: SH-HULL/000114/18/SH.
(2) The remainder of the Claimant’s claims are dismissed.
(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 “Judgment”
2. On 26 September 2025, the Claimant filed an Appeal Notice seeking permission to appeal (“Claimant’s PTA Application”).
3. On 30 September 2025, the Defendant filed:
(1) an Appeal Notice seeking permission to appeal (“Defendant’s PTA Application”); and
(2) an application for a stay of the decision of the lower Court until the appeal is determined (“Defendant’s Stay Application”).
4. On 14 October 2025, the Claimant filed Evidence in Answer in response to the Defendant's Stay Application.
5. On 20 October 2025, the Defendant filed submissions in response to the Claimant's PTA Application.
6. On 21 October 2025, the Claimant filed submissions in response to the Defendant's PTA Application and an application for permission to appeal on an additional ground should the Defendant be granted permission to appeal (“Claimant’s Cross-Appeal PTA Application”)
7. 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.
8. On 18 November 2025, the Claimant wrote to the Registry noting that the Defendant had failed to file any responsive submissions to the Claimant’s Cross-Appeal PTA Application and requesting that the Court proceed with determining (i) both Parties’ Permission to Appeal Applications and (ii) the Defendant’s Stay Application. The Defendant responded:
“The Defendant’s position is that the Claimant’s Cross-Appeal has been made on an improper and premature basis. The Rules (in particular RDC 44.75, 44.76 and 44.80) expressly indicate that any Respondent’s Notice or Cross-Appeal is only to be filed after permission to appeal has been granted (which of course is yet to occur). Additionally, these Rules provide that an application for permission to cross-appeal, by a Respondent i.e. ABNIC, needs to be made directly to the DIFC Court of Appeal. Without limitation, it is for the reasons stated above that AWRIS has elected not to file any responsive submissions to ABNIC’s Cross-Appeal to date, but of course respectfully submits to the Registry should the Registry and/or the trial Judge elect to direct otherwise.”
Claimant’s PTA Application
9. The proposed grounds for appeal are:
(1) The Judge erred as a matter of law in determining that there is no real or present dispute between the parties. The Judge ought to have held that there is such a dispute given that the Defendant does not accept that it has any liability to the Claimant even if the Courts of Sharjah and/or the Union Supreme Court determine that the Claimant is liable to Horizon Energy LLC and/or ABIS under the underlying hull war risks policy.
(2) The Judge erred as a matter of law in refusing the grant the declaration sought by the Claimant. The Judge failed to carry out any of the necessary analysis or balancing exercise and, in particular, to consider the justice to each of the Claimant and the Defendant, the utility of a declaration, and whether there were any special reasons why it should/should not be granted. Had the Judge carried out this exercise, he would have been bound to grant the declaration.
(3) The Judge erred as a matter of fact in deciding that the Placement Document did not form part of the Reinsurance Contract or evidence the same. In the light of the evidence, the Judge should have determined that the Placement Document contained or evidenced the terms of the Reinsurance Contract.
10. The Claimant seeks to substitute the following order:
“The Order being appealed dismissed the Appellant’s claim for a declaration that it is entitled to an indemnity from the Respondent under the Reinsurance Contract concluded between them in the event that the Appellant is held liable to the Insureds under the Underlying Policy. The Judge erred in law and in fact in dismissing the Appellant’s claim for the declaration, as detailed in the Grounds of Appeal and Skeleton Argument. The Appellants therefore seek variation of the Order to grant the declaration sought.”
11. The principles governing permission to appeal from a decision of the Court of First Instance to the Court of Appeal are well-established and uncontroversial. Permission to appeal may only be given where the lower Court or the appeal Court considers that: (1) the appeal would have a real prospect of success; or (2) there is some other compelling reason why the appeal should be heard (RDC 44.19). A real prospect of success is one that is more than merely fanciful.
12. I accept the Claimant’s submissions that:
(1) In relation to appeals from decisions on the exercise of a discretion guidance is to be found in AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507 at 1523C-D (as cited by the DIFC Court of Appeal in Al Rihab Real Estate Company LLC v Emirates NBD Bank PJSC [2020] DIFC CA 006 (5 April 2021) at [119]), where Lord Woolf MR stated:
“Before the Court can interfere it must be shown that the judge has either erred in principle in his approach, has left out of account or has taken into account some feature that he should or should not have considered, or … his decision [is] wholly wrong because the court is forced to the conclusion that he has not balanced the various factors fairly in the scale”.
(2) In relation to appeals from decisions on findings of fact guidance is to be found in Walter Lilly & Co Ltd v Clin [2021] EWCA Civ 136 per Carr LJ (as she then was) at [85]-[86]):
“85. In essence the finding of fact must be plainly wrong if it is to be overturned. A simple distillation of the circumstances in which appellate interference may be justified, so far as material for present purposes, can be set out uncontroversially as follows:
i) Where the trial judge fundamentally misunderstood the issue or the evidence, plainly failed to take evidence in account, or arrived at a conclusion which the evidence could not on any view support;
ii) Where the finding is infected by some identifiable error, such as a material error of law;
iii) Where the finding lies outside the bounds within which reasonable disagreement is possible.
86. An evaluation of the facts is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and appellate courts should approach them in a similar way. The appeal court does not carry out a balancing task afresh but must ask whether the decision of the judge was wrong by reason of some identifiable flaw in the trial judge's treatment of the question to be decided, such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion.”
13. The Claimant raised two proposed grounds of appeal - pleaded ground one is a step in the reasoning underlying the exercise of discretion criticised in ground 2. Ground 3 is a separate challenge to a finding of fact. The suggestion is made that there maybe a third application, namely for permission to adduce further evidence in support of its proposed appeal, but that is not before me.
14. I do not think the Court of Appeal will be assisted by a repetition of the facts or my findings. They will have the Judgment and the parties have made detailed references to the Judgment in their written submissions.
15. Turning to the first proposed ground (i.e. pleaded grounds 1 and 2), I understand that since the date of the Judgment, the Sharjah Court of Appeal has remitted the claim by Horizon Energy LLC (“Horizon”) and Al Buhaira International Shipping (“ABIS”) against the Claimant back to the Sharjah Court of First Instance. Be that as it may, the decision of this Court made by H.E. Justice Robert French that Horizon/ABIS (the “Insured”) are not entitled to an indemnity under the Marine Hull War Policy issued in respect of the m/t BETA (the “Underlying Policy”) (the “Horizon Judgment”) stands and will continue to stand even if the Sharjah Court of First Instance were to reverse its decision that this Court’s judgment amounted to a res judicata binding upon it.
16. The Claimant’s complaint appears to be that if the Sharjah Courts were to decide in the Insured’s favour there would be a conflicting judgment with the Horizon Judgment and “the Defendant maintained at the trial and continues to maintain that it would have no liability to indemnify the Claimant in that event”. The Claimant submits that the declaration it says I should have made is sought because it is not sought to confirm the correctness of the existing agreed position (i.e. the Horizon Judgment). Rather, it is sought because there is a dispute as to what happens (and what are the parties’ respective rights and obligations) if that agreed position is displaced.
17. I fail to understand the point. As I noted at paragraph 126(2) of the Judgment, the Defendant is precluded from seeking to advance a collateral attack against the final and binding Horizon Judgment obtained on its own claim and application.
18. Even if the Sharjah Court of Cassation were to confirm a judgment in favour of the Insured against the Claimant so that issue ceased (as it is now) to be hypothetical, that could not change the judgments of this Court, neither the Horizon Judgment, nor my Judgment. The Horizon Judgment constitutes a binding res judicata in these Courts vindicating the Claimant’s denial of cover to the Insured and my Judgment (subject to any appeal by the Defendant) that the Defendant is bound to indemnify the Claimant against the costs and expenses properly incurred in claims brought by or against the Insured arising out of or in connection with the Underlying Policy. 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. Accordingly, I fail to see what additional benefit is conferred by a declaration that the Claimant is entitled to an indemnity from the Defendant under the Reinsurance Contract concluded between them in the event that the Claimant is held liable to the Insured under the Underlying Policy.
19. 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.
20. As to the second proposed ground (pleaded ground 3), thegravamen of the challenge is the finding of fact that the Placement Document, by its express terms, requested specific agreement, which was not forthcoming and, therefore, it did not form part of the Reinsurance Contract. The Defendant says the finding was correct for the reasons that are summarised at paragraph 122 of the Judgment:
“The argument depends upon the Placement Document forming part of the Reinsurance Contract. AWRIS denies that it does and I agree. I consider that in each year the Reinsurance Contract was concluded by the confirmation of renewal of cover issued by AWRIS. The Placement Document was an attempt to incorporate additional terms and by its express terms requested specific agreement which was not forthcoming.”
21. The argument was that by reason of the Placement Document, the Defendant was obliged to “follow the settlements” which on the authorities also includes judgments against the insurer. In the present case, there was neither a settlement nor a judgment against the Claimant. I agree with the Defendant that it is hard to understand the practical relevance of this proposed ground of appeal. I therefore refuse Permission to Appeal on the second ground.
Defendant’s PTA Application
22. I am willing to accept for the purposes of this application that the mere fact that the Court made findings of English law rather than DIFC law does not mean that the Court’s findings are unsuitable for, or immune from, appellate review. Findings that there were alleged differences in ‘market practice’ between the ‘Middle East’ and London however stand on a different footing, those were findings of fact based on evidence of market practice.
23. I do not accept that the Judgment is the sort of ‘final’ order that would ordinarily attract a ‘right of appeal’ in many other common law jurisdictions is a reason to disregard the provisions of the RDC governing Permission to Appeal.
24. I do not accept that just because both parties are seeking Permission to Appeal that is a valid reason to grant permission. Each application must be addressed on its own merits.
25. I do not accept that the Court’s findings were at odds with an established body of English law (and common law) up to and including the House of Lords or Supreme Court level. The Judgment followed the English authorities but made findings of fact based on the evidence adduced before it.
26. There is no evidence to support the suggestion that there is public interest, and a degree of public importance in connection with this case. Nor do I consider that the amount at stake (which though substantial is hardly unusual in this Court) could amount to a compelling reason why the appeal should be heard.
27. The Defendant raises 4 proposed grounds of appeal:
(1) The CFI erred as a matter of English law and/or as a matter of fact in failing to conclude that the Reinsurance Contract was void ab initio;
(2) The CFI erred as a matter of English law and/or as a matter of fact in declaring that there is an implied term in the Reinsurance Contract that the Defendant is liable to indemnify the Claimant against costs and expenses properly incurred in defending claims brought by or against Horizon/ABIS arising out of or in connection with the Underlying Policy
(3) The CFI erred as a matter of English law and/or as a matter of fact in failing to conclude that the alleged claims made by the Claimant under the Reinsurance Contract were not established to relate to an insured or reinsured ‘war risks peril’ and/or they were automatically excluded on the grounds of late notification, having regard to Clause 4 of the Institute War & Strikes Clauses Hull Time dated 1/11/95 (CL. 281), since Horizon did not give notice to the Claimant, and the Claimant did not give notice to the Defendant, of any alleged loss or damage to the m/t BETA caused by an insured ‘war risks peril’ within 12 months of the date on which Horizon or the Claimant became, or should have become, aware of the alleged loss or damage; and
(4) The CFI erred as a matter of DIFC law and/or acted unreasonably in the exercise of its discretion in its conclusion that ABNIC was the successful party in the litigation, and/or it was unreasonably wrong in its determination that the Defendant should pay all of the Claimant’s costs of the proceedings (as then immediately assessed by the CFI).
28. Under proposed ground 1, the Defendant submits that the CFI wrongly failed to conclude that there was no subject-matter to be reinsured and/or no reinsurable interest, and/or that the Reinsurance Contract was void ab initio, because the Horizon Judgment found that the Underlying Policy was void ab initio. The Court therefore should have concluded that there was no subject-matter to be reinsured under the Reinsurance Contract. Instead, the CFI wrongly concluded that the Reinsurance Contract somehow continued or survived.
29. Further or alternatively, it is said that the CFI wrongly failed to conclude that the Reinsurance Contract was liable to be avoided ab initio for the same (or substantially similar) reasons of misrepresentation and/or non-disclosure as the War Policy was itself avoided ab initio, namely by reason of the knowledge of Mr Abdullah Juma Al Sari. The CFI wrongly concluded that Mr Al Sari’s knowledge was not to be attributed to the Claimant based on a misunderstanding of the express legislative differences between sections 4(3)(a) and 4(3)(b) of the UK’s Insurance Act 2015, and between sections 4(8)(b) and 4(8)(c) of the UK’s Insurance Act 2015, and the effect of section 6(1) of the UK’s Insurance Act 2015. It is said that the CFI wrongly concluded that it was not satisfied that the Defendant had proved that “ABNIC knew that it was in breach of the duty of fair presentation, or did not care whether or not it was in breach of that duty”, but, again, this mis-stated or mis-applied the relevant legal test.
30. It is suggested that if the Underlying Policy was void ab initio, so must be the Reinsurance Policy. That does not follow as matter of English law. I followed Wasa International Insurance Co Ltd v Lexington Insurance Co [2010] 1 AC 180 in holding that the insurable interest which entitles the insurer to reinsure in respect of that subject matter is the insurer’s exposure under the original insurance and if (again on English authority – Goshawk Dedicated Limited & Ors v Tyser & Co Limited & Anor [2005] EWHC 461) there is a custom that reinsurers indemnify insurers against Defence Costs in the Middle East market (as I found on the basis of the expert evidence) that custom would take effect as an implied term defining the insurer’s exposure. It would follow from that, that it would make no sense that, accepting there is an implied term enabling the recovery of Defence Costs, on a successful defence (i.e. establishing that the underlying policy is void ab initio), liability to indemnify the insurer against the Defence Costs automatically disappears.
31. I regret that I cannot see that the conclusion was “both illogical, unreasonable, uncommercial, unsupported by any reported authority, legally wrong”.
32. The suggestion that I should have found that the Reinsurance Contract was void ab initio for misrepresentation and/or non-disclosure as the Underlying Policy was itself avoided ab initio, namely by reason of the knowledge of Mr Abdullah Juma Al Sari is a proposed appeal against a finding of fact. I found as a fact that the Defendant failed to prove the factual basis underlying the allegation. I agree with the Claimant that the matters raised by the Defendant do not satisfy the criteria set out in Walter Lilly.
33. In proposed ground 2, the essence of the complaint is the Defendant’s assertion that London Market practice applied to the Reinsurance Contract and that I failed properly to apply the criteria identified in Goshawk that an implied term based on market practice must be “certain, notorious and reasonable” and “sufficiently clear, invariable and well known that those who practice, or seek to practice, in the relevant market must be taken to know that it is implicit in the contracts that they make”. The Defendant contends that there is no such thing as a Middle East market for war risk insurance.
34. I consider this ground to be hopeless. I addressed the Goshawk grounds expressly. The Defendant’s own expert accepted there was a Middle East market. The Defendant describes itself exists as the “leading war risks insurance syndicate in the Arab Region” with the purpose of protecting the “interests of the Arab insurance markets in the Arabian Gulf area and other Arab regions”. The Defendant led no evidence to contradict that of the Claimant’s expert whom I accepted was a participant in the Middle East insurance market and who gave evidence (which I accepted) as to market practice.
35. Under proposed ground 3, the Defendant submits that it was an error to hold:
“(1) it is not necessary to consider whether the alleged loss of the m/t BETA was proximately caused by an eligible and covered war risk within the relevant policy period” (Judgment paragraph 183); and
“(2) Clause 4 of the Institute War and Strikes Clauses Hulls-Time provides that notice of accident whereby loss or damage may result must be given promptly after the date on which the [insurer] becomes or should have become aware of the loss or damage. If notice is not given within twelve months of that date [reinsurers] will be automatically discharged from liability for any claim under in respect of or arising out of such accident or the loss or damage” (Judgment paragraph 177).
36. As to the former, the citation is incomplete and should read: “As I decline to make a declaration that AWRIS is liable to indemnify ABNIC against any hypothetical finding against ABNIC by the Courts of Sharjah …”. The point is essentially the same point as addressed at paragraph 30 above, it would make no sense that the establishing that the alleged loss of the m/t BETA was proximately caused by an eligible and covered war risk within the relevant policy period was a precondition for the indemnity against successful Defence Costs.
37. As to the latter, as the Claimant notes, H.E. Justice Robert French also held in the Horizon Judgment that the Claimant had no knowledge of the claim until 18 November. The Claimant gave notice to the Defendant on 6 January 2021. I held that notice was therefore given timeously within the 12 months required by the clause (Judgment paragraphs 178-180).
38. 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 Defendant has failed to point to any errors vitiating the exercise of discretion as identified in AEI Rediffusion Music. The reality of the situation was as described at paragraph 18 above and as I stated at paragraph 202 of the Judgment, the Claimant essentially achieved what it was seeking, namely an indemnity against the costs incurred in defending the claim by Horizon and the differences were issues of detail.
39. For all of the above reasons, I decline to grant the Defendant permission to appeal on any of the proposed grounds.
Defendant’s Stay Application
40. 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. The grounds were set out in the Fifth Witness Statement of Gregg Hammond and the Defendant's Skeleton Argument in support of the Defendant's applications for permission to appeal and for stay/extension of time pending appeal. It was said that, should the Defendant's appeal be successful, the Defendant is at real risk from suffering irremediable prejudice if a stay of enforcement is refused in the interim. In particular, there is a real risk that, if the appeal is successful, the Claimant will not be able to repay the judgment sum given its poor financial position and high level of debt repayable in 2025.
41. The Defendant acknowledges that it is well established that, unless the Court orders otherwise, an appeal shall not, in and of itself, operate as a stay of the decision of the Court. In the first instance, the Defendant requests a short extension of time for compliance with paragraph 3 of the Order until such time as its application for permission to appeal, and its application for a stay pending appeal, can be heard and determined on a timely basis.
42. The Defendant seeks a stay on the costs order for three reasons:
(1) the Defendant has (at the very least) a real and realistic prospect of reversing paragraphs 1 and 3 of the Court’s Order on appeal;
(2) the Claimant is not incorporated in the DIFC, but in Sharjah, and it is wholly unclear whether the Claimant would voluntarily comply with any DIFC Court of Appeal Order requiring it to make any repayment to the Defendant of any substantial costs order that might be set aside on appeal; and
(3) the Claimant’s financial statements for the years 2022, 2023, and 2024 suggest that the Claimant has been suffering significant financial losses (with the 2025 end of year figures not yet available), and there is material uncertainty, therefore, as to whether the Claimant will be in a strong enough position, financially, to make any repayment of any substantial costs order at the conclusion of the appellate process.
43. I discount the first point immediately for the reasons already given. As to the second point Mr Hammond states, “the jurisdictional and procedural issues involved when enforcing a DIFC Courts Order against a company situated in Sharjah can be difficult”. This does not seem to me to come close to satisfying the criteria for granting a stay of a judgment as set out in the next paragraph.
44. The criteria may be summarised as follows:
(1) RDC 44.4 provides: “Unless the appeal Court or the lower Court orders otherwise, an appeal shall not operate as a stay of any decision of the lower Court.”;
(2) It was said in Taaleem P.J.S.C. v National Bonds Corporation P.J.S.C [2010] DIFC CFI 014 (27 April 2015) at [2, 5]:
“The burden is on the applicant to put forward good grounds for a stay and thus to establish a real risk of non-recovery….
Grounds for a stay must be established by the applicant. The successful party at trial has a decision in its favour, and is entitled to the fruits of that decision unless the applicant does so. The outcome on appeal being uncertain, the rival contentions as to the merits are unlikely to be persuasive, and it is a question of justice between the parties until the outcome is known with a view to minimising the loss to the ultimately successful party. An important consideration is the relative risk of injustice in granting or not granting a stay, but it depends on the particular facts”; and further in”
(3) Tarig H.A.G. Rahamtalla v Expresso Telecom Group Ltd (CFI 069/2020) (28 December 2021) at [6] that “As is clear from RDC 44.4, together with the commentary on that Rule in DIFC Courts Practice, at pp. 571-572, the burden rests on the applicant for a stay to show why the stay should be granted; the grant of a stay must be justified and is not to be treated as the default rule simply because there is an application for PTA.”
45. Only the third point has the potential for establishing a real risk of non-recovery. 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. Its total comprehensive loss for the year was AED 131,511,639;
(2) These large net losses compounded earlier accumulated losses in 2022 of AED 33.9 million. As such, the Claimant’s total equity fell from AED 628 million (2022) to AED 497 million (2023);
(3) The Claimant’s underwriting losses of AED 139 million was substantially worse than its performance in 2022 (when it already made an AED 47.2 million loss). In particular, its motor insurance gross loss ratio was 125% (net 149%) and medical insurance gross loss ratio was 98% (net 101%). This showed that claims and expenses exceeded premiums;
(4) The quantity of business reinsured fell in 2023, such that its retention level was 33% (up from 28% in 2022);
(5) No dividend was declared;
(6) The Claimant revealed that its solvency was very substantially below the minimum capital requirement imposed by the Central Bank of the UAE; and
(7) The Claimant’s auditor, identified a number of matters of concern in their audit report:
(a) It particularly emphasised the Claimant’s substantial Solvency Capital Requirement (“SCR”) deficit; and
(b) It identified that the value of the Claimant’s large portfolio of investment properties involved significant judgments in determining and estimating the underlying assumptions to be applied, and that the valuations were highly sensitive to those assumptions;
Year ended 31 December 2024
(8) The Claimant again suffered a loss in its core insurance income for the year of AED 42,224,912. Its total comprehensive loss for the year was AED 40,080,380;
(9) The Claimant’s bank debt was AED 278,982,938 (up from AED 221 million in YE 31.12.23), of which AED 181,103,738 was payable on demand or within one year;
(10) The Claimant continued to incur greater claims and expenses for its motor and medical lines than it received in premiums, with the overall loses being AED 42.2 million. This included 4,104 claims totalling AED 139.1 million following the April 2024 floods in Dubai;
(11) No dividend was declared;
(12) The Claimant revealed that its solvency margin had worsened, and was now in deficit of AED 186,209,299 against the benchmark sum required to meet its SCR;
(13) The Claimant’s Minimum Guarantee Fund (“MGF”) solvency margin had deteriorated from a surplus of c.30 million AED in YE 31 December 2023 to a deficit of AED 30,877,149 by YE 31 December 2024; and
(14) As with its accounts for YE 31 December 2023, the accompanying notes stated that “the Group’s ability to comply with the solvency requirements depends on implementing an effective business plan.”
June 2025
(15) S&P Global, the well-known ratings agency, rated the Claimant’s liquidity as “weak”; and
(16) Unaudited accounts for the six-month period which ended on 30 June 2025 showed that –
(a) The Claimant’s net insurance result continued to be in deficit of AED 8,174,742;
(b) SCR was now in deficit of AED 308,591,787, nearly double the size of the deficit as stated in its accounts for YE 31 Dec 2024; and
(c) The Claimant’s Minimum Guarantee Fund solvency margin had also worsened further to a deficit of AED 47,203,621.
46. Based on the foregoing, Mr Hammond suggests that the Claimant’s financial position is poor, and is continuing to deteriorate. Its ability to meet its day-to-day expenses is marginal and subject to the ongoing indulgence of the UAE central bank to permit the Group to continue to maintain capital reserves that are very significantly below the minimum regulatory requirements. The appeal process (including time required for a judgment to be prepared) may well last 9-12 months. By the end of that period there is real uncertainty whether the Claimant will be able to meet its day-to-day expenses, and in particular an order to repay over AED 4 million.
47. In its evidence in reply, the Claimant disputes the suggestion that there is a real (or any) risk that the Claimant will not recover the costs it has been ordered to pay if it succeeds on appeal. It says that for the risk of non-repayment to be real, the Claimant would have to be either cash flow insolvent, or balance sheet insolvent:
(1) The Claimant’s turnover exceeds AED 1 billion;
(2) The Claimant has been in business for more than 45 years, having been incorporated in 1978. It is a listed company whose shares are traded on the Abu Dhabi Securities Exchange;
(3) The Claimant reported a total revenue of AED 1.63 billion in 2025;
(4) The Claimant’s market capitalisation is AED 762.5 million and its enterprise value is listed as AED 951.89 million;
(5) The Claimant holds significant investments, including property investments with an estimated value of AED 849 million. Its total assets stand at AED 1,658.7 million as at 30 June 2025, compared to AED 1,592.8 million at the end of December 2024;
(6) The Claimant’s liabilities are significantly lower at AED 1,172.7 million; and
(7) The Claimant reported an insurance profit of AED 12.5 million at the end of the second quarter of 2025, as compared to losses of AED 24 million for the first half of 2024. The Claimant’s total profits before tax at the end of the second quarter of 2025 are AED 25.6 million.
48. The Claimant suggest that Mr Hammond significantly overstates the impact of the Claimant’s breach of the SCR and MGF. It is said that he overlooks the fact that S&P Global: (i) recognised that the Claimant’s operating performance improved in 2025, noting that “ABNIC continues to run its day-to-day operations normally” and that “the heightened risk of regulatory intervention has subsided, with ABNIC returning to profitable performance in 2025”; and (ii) revised its outlook to “stable” rather than developing. By definition, a ‘B-’ rating assumes that the Claimant “currently has the capacity to meet financial commitments”. As the Claimant explained in its consolidated financial statement for 2025, “the breach of SCR and MGF does not affect the Group’s operational liquidity or ability to meet its financial obligations in the normal course of business”. The Claimant submits that, therefore, any suggestion that the Claimant’s financial position is poor and “continuing to deteriorate”, such that it will not be able to make payments, operate as normal, or repay circa AED 4 million, is untenable.
49. I am in no doubt that the Claimant has suffered financial difficulties, but the judgment sum of AED 4 million is relatively modest in the context of a turnover of AED 1.63 billion, enterprise value of AED 951.89 million, investments that exceed liabilities by c.485 million and the fact that the Claimant appears to be back in profit. Consequently, I am not persuaded that there is a real risk of non-recovery and therefore I decline to order a stay on execution of the Judgment.
Claimant’s Cross-Appeal PTA Application
50. The Claimant submits that to the extent that the Defendant is granted permission on any proposed ground pf appeal, the Claimant should be granted permission to appeal in respect of the governing law issue.
51. As I have not granted the Defendant Permission to Appeal on any proposed ground, the Claimant’s application does not fall for determination.
Disposition
52. The Claimant’s PTA Application, the Defendant’s PTA Application, and the Defendant’s Stay Application are dismissed.
53. No order is made on the Claimant’s Cross-Appeal PTA Application.
54. On the assumption that the parties will renew their applications before the Court of Appeal, all matters of costs are reserved to the Court of Appeal. Should any appeal be discontinued before reaching the Court of Appeal, the parties have permission to revert to the Court of First Instance.
