Claim No: CFI 013/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF APPEAL

BETWEEN

AL BUHAIRA NATIONAL INSURANCE COMPANY

Claimant

and

ARAB WAR RISKS INSURANCE SYNDICATE

Defendant

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ORDER WITH REASONS OF H.E. CHIEF JUSTICE WAYNE MARTIN

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UPON the Order with Reasons of H.E. Justice Michael Black KC dated 27 November 2025 (the “Order”)

AND UPON the Judgment of H.E. Justice Michael Black KC dated 9 September 2025 (the “Judgment”)

AND UPON the Claimant’s Renewed Permission to Appeal dated 18 December 2025 seeking to appeal the Judgment (the “Claimant’s Permission to Appeal Application”)

AND UPON the Defendant’s Renewed Permission to Appeal dated 18 December 2025 seeking to appeal the Judgement (the “Defendant’s Permission to Appeal Application”)

AND UPON the Claimant’s Application No. CFI-013-2024/6 dated 18 December 2025 (the “Claimant’s Application”) seeking to adduce additional evidence under Part 44.114 of the Rules of the DIFC Courts

AND UPON the Defendant’s evidence in answer to the Claimant’s Application Notice dated 2 January 2026

AND UPON the Claimant’s Cross Appeal dated 8 January 2026 seeking permission to appeal on an additional ground should the Defendant be granted permission to appeal (the “Claimant’s Supplementary Appeal Application”)

AND UPON the Defendant’s submissions in opposition to the Claimant’s Permission to Appeal Application dated 8 January 2026

AND UPON the Defendant’s Application for security of costs in respect of its costs of the appeal, made in paragraph 6.4 of the Defendant’s submissions in opposition dated 8 January 2026 (the “Defendant’s Application for Security for Costs”)

AND UPON the Claimant’s evidence in reply to the Claimant’s Application Notice dated 9 January 2026

IT IS HEREBY ORDERED THAT:

1. The Claimant’s Permission to Appeal Application is granted in respect of all grounds.

2. The Claimant’s Supplementary Appeal Application is granted.

3. The Defendant’s Permission to Appeal Application is granted in respect of:

4. The Defendant’s Permission to Appeal Application in respect of the aspect of ground 1 pertaining to non-disclosure and misrepresentation, the aspect of ground 3 relating to the time at which notice was given under the re-insurance contract, and ground 4 is dismissed.

5. The Defendant’s Application for Security for Costs is dismissed.

6. 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.

7. 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.

8. The costs of all Applications are reserved to the Court of Appeal.

Issued by:
Delvin Sumo
Assistant Registrar
Date of Issue: 4 March 2026
At: 2pm

SCHEDULE OF REASONS

Summary

1. There are five Applications before the Court of Appeal. They are:

2. The Applications for Permission to Appeal have been made to the Court of Appeal because the initial applications for permission to appeal by each of ABNIC and AWRIS were dismissed by the Judge at first instance (the “Judge”). The applications for the provision of security for costs and for leave to adduce additional evidence are properly made to the Court of Appeal.

3. For the reasons which follow, each of ABNIC and AWRIS should be granted permission to appeal in terms of the orders which precede these reasons, ABNIC should be granted permission to adduce additional evidence on the hearing of the appeal, subject to the right of AWRIS to adduce any additional evidence which is strictly responsive to that evidence and the application for security for costs in respect of the appeal is dismissed.

The factual and procedural context

4. The following factual and procedural context in which the various Applications must be considered is taken largely from the reasons given by the Judge. Obviously, none of the matters set out in the reasons which follow should be taken to represent a conclusive finding by the Court of Appeal. Rather, the matters set out below provide context to assist an appreciation of the respective positions of the parties in relation to the various applications before the Court.

5. ABNIC is an insurance company incorporated in Sharjah in the UAE. It has been in business for over 45 years. It has branches throughout the UAE. It writes both personal and commercial lines of business and amongst its commercial lines is Marine Hull Insurance.

6. AWRIS is a syndicate of over 194 insurers from the MENA region (including ABNIC) incorporated in the Kingdom of Bahrain. It has been in business for approximately 45 years and, as its name suggests, sees its purpose as protecting the interests of Arab insurance markets for marine war risks (amongst others). It offers re-insurance cover on both a treaty and facultative basis for marine war and related perils, including terrorism and piracy, which are normally excluded from standard Marine Hull and Machinery policies. AWRIS mitigates its risks by taking out higher level re-insurance.

7. In 2015, ABNIC entered into two policies of insurance with Horizon Energy LLC (“Horizon”) a company incorporated in Dubai, together with its subsidiaries and/or affiliated companies and/or other interests as named for their respective rights and interests. The policies were a Marine Hull and Machinery Policy and a Marine Hull War Policy. The parties named as Horizon’s affiliates included Al Buhaira international Shipping Inc, a company incorporated in Liberia. That company was the owner of a tanker, the m/t Beta (“the “Beta”).

8. Both policies were renewed annually, the last policy covering the period between 10 June 2018 and 9 June 2019. During that period the Beta was insured for USD 70m.

9. In 2015, AWRIS entered into a re-insurance contract with ABNIC on a facultative basis providing 100% re-insurance of the War Policy. The re-insurance contract was renewed annually and applied to the same periods as the underlying policies.

10. On 18 November 2020, Horizon notified ABNIC of a claim under the Hull Policy and in respect of events which were said to have occurred during the last period of cover – namely, 2018-2019. This notification was passed on by ABNIC to AWRIS on 6 January 2021.

11. On 25 October 2021, Horizon gave formal notice to ABNIC of a claim under both policies with respect to the loss of the Beta. This notice was sent to AWRIS by ABNIC on 3 November 2021.

12. In the Notice of Claim, Horizon asserted that it had employed a company to provide security services for three vessels, including the Beta. Towards the end of November 2018, Horizon had arranged for the Beta to be anchored at the borders of the outer port of Fujairah, UAE. Horizon asserted that to the best of its knowledge the Beta was anchored at a particular location in May 2019, which was its last known location.

13. Horizon further asserted that on 12 May 2019, the UAE Coastguard had written to the Federal Transport Authority Land and Maritime requesting its assistance in towing the Beta together with two other vessels to the nearest port “due to risks posed to vessels in that area”. Horizon asserted that in mid-November 2019, it had become aware that the security company it had engaged was unable to access the three vessels including the Beta. While Horizon was able to locate two of the vessels at anchorage at Khor Fakkan, no information had been provided as to the whereabouts of the Beta.

14. Horizon asserted in its notice of claim that the Beta appeared to have been located in Iran under the name m/v” Makran” since mid-May 2019 and had been converted into an auxiliary vessel in the service of the Iranian Navy. Horizon asserted that the conclusion properly drawn was that the Beta had been the subject of a “capture, seizure, arrest … by persons connected with the Iranian Government and/or Navy” with the result that the loss was covered by the underlying policy.

15. 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. The complaint was referred to an Insurance Dispute Resolution Committee (“IDRC”).

16. On 10 November 2021, ABNIC notified Horizon that it was avoiding both underlying policies and on the same day commenced proceedings in this Court against Horizon seeking declarations, among other things, that it was entitled to do so (the “Horizon DIFC proceedings”). ABNIC asserted it was entitled to avoid both policies on the following grounds:

17. Horizon challenged the jurisdiction of the DIFC Court in relation to the Horizon DIFC proceedings, but the challenge was dismissed by H.E. Roger Gyles on 28 April 2022. Horizon’s appeal against this decision was dismissed by the DIFC Court of Appeal on 19 April 2023.

18. In the meantime, on 13 June 2022, the IDRC dismissed Horizon’s complaint on the basis that it lacked jurisdiction.

19. On 7 July 2022, Horizon commenced proceedings against the Claimant in the Sharjah Court of First Instance (the “Horizon Sharjah proceedings”). Those proceedings were stayed by the Sharjah Court on 20 September 2023 in deference to the Horizon DIFC proceedings.

20. On 12 October 2023, the DIFC Court of Appeal dismissed an application by Horizon to refer the Horizon DIFC proceedings to the Union Supreme Court.

21. On 14 February 2024, ABNIC commenced these proceedings against AWRIS seeking, amongst other things, declaratory relief to the effect that in the event that it is found liable to Horizon under the War Policy, it is entitled to be indemnified by AWRIS in respect of its liability, and a further declaration that it is entitled to be indemnified against all costs and expenses incurred in proceedings brought by or against Horizon in respect of the War Policy.

22. In June 2024, AWRIS applied for orders, amongst others, staying the claim pending final determination of the Horizon DIFC proceedings and/or the Horizon Sharjah proceedings.

23. ABNIC opposed the application and after a hearing on 25 July 2024, on 6 August 2024, H.E. Justice Michael Black KC dismissed the application for a stay, noting that the Sharjah proceedings had been stayed and that it was not known what might happen with respect to those proceedings after the determination of the Horizon DIFC proceedings.

24. On 26 September 2024, H.E. Justice Robert French gave judgment in the Horizon DIFC proceedings upholding ABNIC’s claim that it was entitled to avoid both policies. He found that the Beta was not in class, but Horizon had represented to ABNIC that it was in class and that, had ABNIC known the vessel was not in class, cover would not have been provided. Accordingly, ABNIC was entitled to avoid both policies by reason of Horizon’s breach of the duty of fair presentation.

25. Horizon did not appear at the trial of the Horizon DIFC proceedings.

26. On 31 March 2025, Horizon applied to the Sharjah Court to lift the stay on the proceedings in that Court on the basis that the DIFC Courts had issued a final and binding judgment. On 7 April 2025, ABNIC cross-applied and requested that the Sharjah Court lift the stay and dismiss the claim.

27. The trial of these proceedings took place before the Judge over seven days between 7- 10 April 2025.

28. After a hearing on 28 May 2025, on 19 June 2025 the Sharjah Court of first instance dismissed the Horizon Sharjah proceedings on the ground that ABNIC’s right to avoid the policies had been finally determined by the DIC Courts in the Horizon DIFC proceedings and that this determination was binding on Horizon.

29. The Judge’s decision in these proceedings was published on 9 September 2025.

30. In the meantime, Horizon had appealed against the decision of the Sharjah Court of First Instance and on 22 September 2025, that appeal was upheld by the Sharjah Court of Appeal. Of course, that ruling was not known to the Judge at the time he published his decision in these proceedings.

31. ABNIC has now appealed to the Sharjah Court of Cassation from the decision of the Sharjah Court of Appeal. On the basis of the evidence before this Court, that appeal has not yet been determined.

The decision at first instance

32. At this stage, it is sufficient to provide a general overview of the decision at first instance, on the basis that the detailed findings and reasons of the Judge with respect to issues which are contested by the applications for permission to appeal will be considered in the context of the relevant proposed grounds of appeal.

33. In his reasons, the Judge explained why, in his view, there were eight issues which required resolution. He characterised those issues as:

34. I will address each of these issues in turn.

Governing law of the re-insurance contract

35. The re-insurance contract contains no express provision identifying the governing law of the contract. ABNIC contended that the Court should conclude that the re-insurance was most closely related to the UAE and should be governed by UAE Law, whereas AWRIS contended that the re-insurance contract was more closely connected with England, and that the Court should conclude the governing law was English Law. The Judge concluded that the governing law of the re-insurance contact was English Law and provided detailed reasons for that conclusion.

Insurable interest

36. AWRIS contended that because the policies were a species of property insurance, rather than liability insurance, and because this Court had found that both policies were validly avoided, ABNIC had no insurable interest in any of the vessels covered by the policies, sufficient to sustain the re-insurance contract. ABNIC contended that it had an insurable interest in respect of its claim for indemnity in relation to legal costs incurred in proceedings relating to Horizon’s claim and because of the possibility of a finding by the Sharjah Court that ABNIC is liable to Horizon. Accordingly, the Judge concluded that the answer to this issue was to be found in the other issues which he was to consider, namely the question of whether ABNIC was entitled to indemnity in respect of legal costs incurred in relation to proceedings with Horizon and whether ABNIC was entitled to declaratory relief because of the possibility that it might be found liable to Horizon in the Horizon Sharjah proceedings.

Contingent liability

37. ABNIC contended that its entitlement to declaratory relief was resolved by the express terms of the reinsurance contract which included a “follow the settlements clause” included in the Placement Document which formed part of the relevant re-insurance contract (for the period 2018-19). That document was provided by ABNIC to AWRIS as part of the re-insurance contract renewal process and relevantly provided:

“With reference to our prior agreement, we confirm the following Facultative Reinsurance Placement with you… Warranted all terms and conditions as per original Policy and facultative reinsurers to follow all decisions agreed between the ceding company and the insured in regard to all terms, conditions, exceptions, limitations, warranties [sic], return and additional premium. The facultative reinsurers shall also follow in every respect all settlements agreed between the ceding company and the insured. Kindly return a copy hereof duly stamped and signed in token of your acceptance for our records.”

38. The Judge noted that there was no evidence to the effect that AWRIS had stamped, signed and returned the Placement Document and concluded that it did not form part of the re-insurance contract. In his view:

“In each year the Re-Insurance 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.”

39. Accordingly, the Judge rejected ABNIC’s reliance upon the asserted “follow the settlements clause”.

40. In relation to the possibility that the Sharjah Court might find ABNIC liable to Horizon in the proceedings in that Court, the Judge considered that the declaratory relief sought invited him to speculate that the decision of the Sharjah Court of first instance might be set aside on appeal. In his view, there was no real or present dispute between the parties before this Court, with the result that he should exercise his discretion to decline to grant declaratory relief.

Defence costs

41. ABNIC contended that it was an implied term of the re-insurance contract that AWRIS would pay all reasonable costs of ABNIC incurred in defending claims brought against it by Horizon and/or taking such action as is reasonably necessary to limit or avert its potential liability to its insured, it being the custom or practice in the UAE that such costs are payable by a re-insurer, particularly in circumstances where the re-insurer has agreed to re-insure 100% of the risk.

42. After reviewing English authorities relating to the implication of terms and the evidence with respect to practice in what the Judge described as the re-insurance market in the UAE and the Middle East, the Judge accepted that there was a uniformly accepted market custom to the effect asserted by ABNIC.

43. The Judge rejected AWRIS’ contention that an implied term to the effect alleged would be inconsistent with clause 5.1 of the Institute War and Strikes Clauses Hull Time which provides:

“This insurance excludes loss damage liability or expense the operation of ordinary judicial process, failure to provide security or to pay any fine or penalty or any financial cause.”

44. Although the Judge did not specifically return to the issue of insurable interest, it is implicit in his reasons as a whole that he considered that his conclusion that ABNIC was entitled to indemnity in respect of its legal costs resolved the argument advanced by AWRIS with respect to the lack of an insurable interest in the re-insurance contract.

Misrepresentation/non-disclosure

45. Having decided that the re-insurance contract was governed by English Law, the Judge addressed issues of misrepresentation/non-disclosure by reference to the provisions of the Insurance Act 2015. AWRIS contended that ABNIC had made a false misrepresentation of fact to the effect that the Beta was classified with Bureau Veritas when ABNIC had no proper basis upon which to make that representation. AWRIS relied upon the failure of ABNIC to disclose that one of its officers had been advised that the vessels to be insured were in the process of classification renewal, and upon the fact that a director of ABNIC, a Mr Al Sari, was also an officer of Horizon.

46. The Judge found as a fact that ABNIC was not aware that any of the vessels were out of class and noted the evidence given in the proceedings before H.E. Justice Robert French to the effect that ABNIC would not have provided cover to any vessels that were not in class. The Judge considered that the argument with respect to Mr Al Sari was entirely speculative and that there was no evidence to the effect that, in his role as a director of ABNIC, he played any part in the decision to provide cover to Horizon or obtain re- insurance in respect of that risk. Accordingly, the Judge concluded that AWRIS was not entitled to deny cover under the re-insurance contract by reason of non-disclosure or misrepresentation.

Time bar/late notification

47. AWRIS contended that the letter of 18 November 2020 was not a notification under the War Policy but rather was notification under the Hull Policy, and that it was provided more than 12 months after the expiry of the 2019 policy and more than 12 months after the alleged date of the last sighting of the vessel in May 2019.

48. The Judge found that ABNIC had no knowledge of any potential claim until Horizon gave notice on 18 November 2020 and noted that he did not understand AWRIS to suggest that it did. The Judge further considered that there was enough information in the notice to put AWRIS on notice of a potential claim under both Policies, having regard to the assertion that the vessel had “disappeared”. Accordingly, the Judge considered that by providing AWRIS with a copy of the notice it had received on 6 January 20201, ABNIC had provided timely notice of a potential claim under both policies to AWRIS.

49. The Judge further noted that when the formal claim under both Policies was received by ABNIC on 25 October 2021, it was promptly provided to AWRIS on 3 November 2021. 50. Accordingly, the Judge concluded that AWRIS was not entitled to deny liability on the basis of late notice.

Proof of loss

51. AWRIS submitted that ABNIC had made no attempt to prove that even if the underlying Policies had not been validly avoided, the loss of the Beta was caused by an eligible and covered war risk within the relevant policy period. The Judge considered that it was unnecessary for him to determine that issue because it was only relevant to the declaratory relief sought by ABNIC, which would not be granted.

Relief

52. For the reasons already given, the Judge confirmed that he would not grant the relief sought by ABNIC with respect to declarations concerning its entitlement to indemnity from AWRIS if found liable to Horizon under the underlying policies, but would grant the declaratory relief sought in relation to costs and expenses incurred by ABNIC in proceedings brought by or against the insured in respect of the underlying policies

Costs

53. The Judge considered that ABNIC was the successful party, and that the fact that it had failed on certain issues did not justify any reduction in its costs, which were awarded to ABNIC in full. The Judge then undertook an immediate assessment of ABNIC’s costs and awarded AED 4,563,051.74 in that regard.

Permission to appeal – legal principles

54. Rule 44.117 of the Rules of the DIFC Courts (“RDC”) provides:

55. RDC 44.5 requires that an appellant obtain permission to appeal to the Court of Appeal except where the appeal is against a committal order.

56. RDC 44.19 provides:

57. RDC 44.19 provides that permission to appeal may only be given where the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.

58. In the context of an assessment of the prospects of success “real” means realistic rather than fanciful and involves the same test as is applied in applications for immediate judgment.¹

59. A real prospect of success does not mean a probability of success, but more than mere arguability.²

60. “Some other compelling reason why the appeal should be heard” may include the public interest in clarifying the meaning and scope of relevant practice and provisions of DIFC and wider UAE law.³

61. 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.⁴

62. It is also established that a real prospect of success does not mean a probability of success, but more than mere arguability.⁵

63. Accordingly, in order to obtain the grant of permission a prospective appellant needs to establish more than the proposition that the proposed appeal is reasonably arguable – rather, it must be established that there is a real prospect of success.⁶

64. Particular principles apply to applications for permission to appeal against case management decisions and multi factorial assessments undertaken by a Judge at first instance, given the hurdles which must be overcome to obtain appellant intervention in such cases.⁷ However, as this case does not involve either an application to appeal against a procedural or case management decision, or against a multi factorial assessment by the trial Judge, it is unnecessary to essay the relevant principles in these reasons.

65. When a renewed application made to the Court of Appeal is refused, it is appropriate for the Court to provide reasons which adequately explain the reasons why permission has been refused. The adequacy and extent of those reasons will be informed by the fact that the refusal of permission is final and conclusive and determines the issues the subject of the appeal.

66. On the other hand, when a renewed application for permission to appeal is granted, the reasons for the grant can and should be expressed more briefly, and any views expressed should be expressed and read as provisional, on the basis that a different view might well be formed following the consideration of the fuller argument which will be presented at the hearing of the appeal. Any views expressed in these reasons should be read and construed on that basis. Further, the reasons for granting permission in respect of grounds of appeal will be expressed economically, not only because the determination of the issue raised by the ground must await the hearing of the appeal but also to limit the prospect that a party might consider that a member of the Court of Appeal does not retain an open mind in relation to any of the issues in the appeal.

67. It is now appropriate to apply these considerations to the circumstances of this case.

(1) ABNIC’s application for permission to appeal

68. ABNIC applies for permission to appeal in respect of three grounds, and a further (fourth) ground if, and only if, AWRIS is granted permission to appeal. That ground will be considered below.

Grounds 1 and 2

69. Grounds 1 and 2 are both concerned with the Judge’s decision to decline to grant the declaratory relief sought by ABNIC in relation to its entitlement to an indemnity in respect of any monies it is found liable to pay Horizon under the underlying policies. They are conveniently considered together.

70. ABNIC relies on authority for the following propositions:

71. ABNIC submits that the Judge’s reliance on the lack of any dispute between the parties with respect to the correctness of the judgment of H.E. Justice Robert French in the Horizon DIFC proceedings is not to the point. The question posed by the present proceedings is not concerned with the rights which were determined in the DIFC Court proceedings as between ABNIC and Horizon, but rather, with the rights as between ABNIC and AWRIS in the event that ABNIC is ultimately found liable to Horizon under the underlying policies. AWRIS maintains, and continues to maintain that it has no liability to indemnify ABNIC in that event so that, consistently with the principles established by authority, there is real utility in determining the respective rights and obligations of ABNIC and AWRIS in the event that the contingency upon which the claim is based materialises.

72. 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. There is also a real and present dispute as to whether AWRIS is liable to indemnify AWRIS under the reinsurance policy in the event that ABNIC is found liable to Horizon. According to AWRIS, the Judge was wrong to conclude that there was no real or present dispute or that the issue was hypothetical.

73. By ground 2, AWRIS asserts that the Judge failed to exercise his discretion by reference to the factors identified by Neuberger J (as he then was) in Financial Services Authority v John Edward Rourke¹⁴. ">¹⁴ namely:

74. AWRIS contends that if the Judge had undertaken the necessary consideration of these factors he would have concluded that:

75. In opposition to these grounds AWRIS relies upon ABNIC’s objection to its application for a stay of these proceedings in mid-2024, until the Horizon Sharjah proceedings were resolved. It contends that the consequent uncertainty with the outcome of those proceedings is the consequence of the position adopted by ABNIC.

76. AWRIS also relies upon the discretionary nature of the power exercised by the Judge, pointing to the well-established principles of appellate restraint with respect to the exercise of such powers.

77. AWRIS also relies upon observations made by the Judge at the time of rejecting the initial application for permission to appeal to the effect that the Horizon judgment in the DIFC Court constitutes a binding res judicata vindicating ABNIC’s denial of cover to the insured.

Analysis

78. The contentions advanced by AWRIS with respect to its earlier application for a stay and the Judge’s observations with respect to res judicata do not carry substantial weight. If ABNIC’s primary submission, to the effect that there is a real and present dispute which is appropriately resolved by declaratory relief is upheld on appeal, it will follow that the stay was rightly refused.

79. In relation to the Judge’s observations with respect to the effect of the judgment in the Horizon DIFC proceedings, there is force in ABNIC’s contention to the effect that this is not to the point, because the res judicata only applies to ABNIC and Horizon and the issues determined in these proceedings concern ABNIC’s rights against AWRIS.

80. AWRIS is of course correct to rely upon the principles pertaining to appellate restraint with respect to the exercise of discretion. However, the arguments advanced by ABNIC rely upon alleged errors of principle which could lead the appellate court to conclude that the Judge had gone outside the range of discretionary decisions reasonably open to him.

81. These grounds of appeal have a real prospect of success.

Ground 3

82. Grounds 3 contests the trial Judge’s conclusion that the Placement Document containing the “follow the settlements clause” was not part of the Re-insurance Contract. ABNIC submits that the Judge failed to take into account the fact that the unchallenged evidence established that a Placement Document containing a “follow the settlements clause” was sent by ABNIC to AWRIS at the time the cover was originally placed in 2015, and in the three succeeding years the cover was renewed.

83. ABNIC further submits that the Judge erred by concluding, in effect, that the return of a signed and stamped copy of the Placement Document was a condition of its acceptance. ABNIC contends that the document did not provide that such a course was the only way in which the document could be accepted – rather the terms of the document suggest that its return was an administrative formality rather than a contractual necessity.

84. Perhaps put another way, ABNIC contends that the terms of the Placement Document did not exclude other means by which AWRIS could accept the renewal of cover on the terms set out in the document, including in particular, by conduct, in the form of receiving payment of the premium for the cover without demur either in 2018 or in any previous year.

85. AWRIS contends that the Judge made a finding of fact which was open to him on the evidence and submissions before him at trial which should not be displaced on appeal.

86. The question of whether this Court should continue to follow English authorities with respect to appellate restraint in relation to findings of fact at first instance in cases which the appellate court is in as good a position as the Judge at first instance to make such a finding is a live issue which will likely be determined by the Court of Appeal in a case which is pending before the Court. Arguably this case raises the same issue, at least insofar as the construction and effect of the Placement Document is concerned.

87. Irrespective of the outcome of that issue, this ground of appeal has a real prospect of success.

88. Because each ground of appeal proposed by ABNIC has a real prospect of success, permission to appeal must be granted.

(2) ABNIC’s application for permission to adduce additional evidence

89. ABNIC applies to adduce additional evidence in the form of copies of documents in both Arabic and English relating to events which have occurred in the Horizon Sharjah proceedings since the conclusion of the trial in these proceedings. The particular documents which ABNIC wishes to adduce in evidence are identified specifically in the sixth witness statement of Mr Soudagar and are all of the character described above. ABNIC also seeks permission to adduce documents of the same character which do not presently exist as and when they become available, in order to obviate the need to apply for permission every time a new document is issued by or submitted to the Sharjah Courts.

90. ABNIC submits that the documents are clearly relevant to the issues in the appeal, and in particular those relating to the Judge’s refusal of declaratory relief, and that the criteria for admission of additional evidence set out in Ladd v Marshall¹⁵ have all been met in that:

91. AWRIS opposes the application on the ground that it would have been unnecessary if ABNIC had not opposed its application for a stay. With respect, that proposition suffers the same flaw as the similar proposition referred to above, in that it presupposes that ABNIC was wrong to pursue these proceedings prior to the determination of the Sharjah proceedings – a question which is inextricably tied up with the issues relating to the grant of declaratory relief which will be considered by the Court of Appeal. AWRIS also submits that the evidence is irrelevant and is not credible, probative or conclusive because the timing, status and future progress of the Sharjah litigation is itself “an irrelevant matter of pure speculation”.

92. ABNIC’s grounds of appeal squarely raise the question of whether or not the Sharjah proceedings are relevant to the proper exercise of the discretion with respect to the grant of declaratory relief. AWRIS’ submissions appear to presume the outcome of that issue in its favour.

93. It is appropriate for the Court of Appeal to have available for its consideration documents indicating the course of the Horizon Sharjah proceedings and their status at the time the appeal is considered. The application to adduce additional evidence should be allowed, on the terms sought, which extends to documents which come into existence in the future of the same character.

(3) AWRIS’ application for security for costs

94. AWRIS contends that the grant of permission to appeal to ABNIC should be conditioned upon the provision of security for its costs of the appeal. The precise basis for that contention is not immediately clear from the written materials. Presumably it is based upon the arguments with respect to the financial position of ABNIC which were presented to the Judge at the time of AWRIS’ initial application for permission to appeal in support of an application that the Judge stay the order which he had made for the payment of costs. However, after reviewing the evidentiary materials which had been provided by AWRIS in support of that application, the Judge concluded that he was not satisfied that the financial position of ABNIC justified any stay of his order.

95. AWRIS has not made any attempt to contest that conclusion by evidence or argument. Given that AWRIS has not established that there are grounds to believe that ABNIC would not be in a position to satisfy an order for costs made against it in the event that its appeal fails, and given that the Court has found that the appeal has a real prospect of success, there is no basis for an order that ABNIC provide security for AWRIS’ costs of appeal.

(4) AWRIS’ application for permission to appeal

96. AWRIS advances four grounds of appeal.

Ground 1

97. Proposed ground 1 contains two separate and distinct grounds. The first of those grounds propounds that the Judge should have held that because the underlying policies were liable to be avoided, and were in fact avoided, ABNIC had no insurable interest in the subject matter of the re-insurance contract.

98. In support of this ground, AWRIS contends that the effect of the decision in the Horizon DIFC proceedings was that the underlying policies were void ab initio, with the consequence that the re-insurance contract must also be void ab initio, as ABNIC had no liability for AWRIS to re-insure. AWRIS contends that the Judge’s conclusion that the implied indemnity in respect of legal costs provided an insurable interest is flawed on the basis that if the re-insurance contract is void ab initio, as it contends, there is no basis for the implication of a term.

99. ABNIC contends that re-insurance contracts are independent bargains and the relevant insurable interest is not the interest of the insured in the underlying policy, but rather, the prospective liability of the insurer by reason of the underlying policy – see Wasa International Insurance Co Ltd v Lexington Insurance Co.¹⁶ Accordingly, it doesn’t follow that merely because the primary policy is void the re-insurance is likewise void. ABNIC points to its continuing potential exposure under the underlying policy which is the subject of the Horizon Sharjah proceedings.

100. This ground of appeal will have little prospect of success if ABNIC’s appeal with respect to the ground of declaratory relief succeeds, as it would follow that the Court of Appeal has concluded that ABNIC’s potential liability is sufficient to justify the grant of declaratory relief and therefore to provide an insurable interest for the purposes of the re-insurance contract. However, if ABNIC’s appeal fails, this ground of appeal has at least some prospect of success and permission to appeal should be granted on that basis.

101. The second aspect of the first ground of appeal asserts that the Judge failed to conclude that the re-insurance contract was liable to be avoided for misrepresentation and/or non- disclosure. In support of this ground, AWRIS relies heavily on the role of Mr Al Sari, who was a member of ABNIC’s Board of Directors and Chairman of its Audit Committee and contends that the Judge should have found that he knew or ought to have known of the matters which were not disclosed to AWRIS.

102. ABNIC submits that there was no evidence whatever to the effect that Mr Al Sari had any knowledge of any of the matters which AWRIS contends should have been disclosed, or that he was involved in any way in any decisions with respect to either the provision of the underlying cover or the re-insurance.

103. This aspect of the first ground of appeal has no prospect of success. AWRIS has not been able to point to any evidence to the effect that Mr Al Sari had any relevant knowledge or was in any way involved in either the decision to provide the underlying cover or the decision to acquire re-insurance from AWRIS. The submissions made at trial were pure conjecture based on what the Judge described as a “conspiracy theory” and would not be viewed any differently by the Court of Appeal.

104. Permission to appeal must be refused in respect of this aspect of ground 1.

Ground 2

105. By ground 2, AWRIS contends that the Judge wrongly concluded that the re-insurance contract was not subject to London market practice, and also wrongly concluded that the re-insurance contract included an implied term based on “Middle East market practice” and should have held that the asserted implied term was inconsistent with express terms of the re-insurance contract. AWRIS further contends that the Judge failed to apply English authorities with respect to the high evidential threshold which must be met to establish that there is a “certain, notorious and reasonable custom in the relevant market”.

106. ABNIC contests each of these assertions and contends that the Judge clearly applied the principles established by relevant authority to the evidence which he heard in relation to re-insurance custom and practice in the Middle East. ABNIC disputes the assertion that there is any conflict between the Judge’s conclusion that the re-insurance contract was most closely connected to England, for the purposes of deciding that it was governed by English law, and his reliance upon custom and practice in the Middle East market, rather than the English market. Further, ABNIC contests the assertion that the implied term is inconsistent with the express terms of the re-insurance contract.

107. The weakness of this ground of appeal lies in its reliance upon a challenge to the Judge’s finding with respect to the expert evidence which he heard, and in respect of which he has a considerable advantage over any appellate court. However, there are aspects of the ground which do not suffer that disadvantage, including the issues with respect to the identification of the relevant market and inconsistency with the express terms of the re- insurance contract. Those aspects of the ground have sufficient prospect of success to justify the grant of permission to appeal in respect of the ground generally.

Ground 3

108. Ground 3 is another ground which has two quite separate components. The first component contends that the Judge erred by failing to conclude that because ABNIC had failed to establish that the claims made under the re-insurance contract related to a war risk peril which occurred during the period of cover it had failed to discharge its burden of proving its entitlement to indemnity. ABNIC contends that it has always asserted that Horizon has failed to establish that the vessel was lost by reason of a risk covered by the Policy during the period of cover and continues to maintain that position in the Horizon Sharjah proceedings. However, the contingency against which these proceedings are brought is the proposition that such a contention is rejected by the Sharjah Courts and ABNIC is found liable to indemnify Horizon. ABNIC contends that in these circumstances it could not be expected to establish, in these proceedings, a proposition which it is contesting in the proceedings commenced by Horizon, on behalf of itself and AWRIS.

109. There is considerable force in ABNIC’s response to this ground. However, it is possible that the ground does raise an interesting question as to whether ABNIC can obtain a declaration that it is entitled to indemnity under the re-insurance contract without establishing that all the preconditions for indemnity are satisfied and instead rely upon a contingent adverse finding which might (or might not) be made in the Horizon Sharjah proceedings. It is appropriate to grant permission to appeal in respect of this aspect of ground 3 in order to enable that issue to be addressed, although it may lose much of its interest if ABNIC succeeds in establishing that the reinsurance contract contained a “follow the settlements” clause.

110. The second aspect of ground 3 contends that the Judge erred in failing to find that ABNIC had failed to comply with its obligation of providing prompt notice of a claim. AWRIS contends that the Judge erred by concluding that ABNIC’s obligation to give notice did not arise until it was aware of the loss or damage, leading to the inconsistent conclusion that late notice by Horizon to ABNIC discharged ABNIC’s obligations, but AWRIS’ obligation to ABNIC remains on foot. AWRIS relies upon clause 4 of the Institute Clauses in support of this proposition.

111. ABNIC contends that the Judge was entirely correct to find that ABNIC’s obligation to give notice did not arise unless and until it was aware of the loss or damage, which did not occur until it received notice from Horizon. ABNIC further contends that the Judge was correct to conclude that notice was given timeously to AWRIS after ABNIC received notice from Horizon.

112. This aspect of ground 3 has no prospect of success. The contention that ABNIC was obliged to give notice of matters of which it was unaware is illogical and unsustained by any clause in the re-insurance contract. The Judge’s finding that ABNIC gave notice in a timely fashion after receiving notice from Horizon cannot be impeached.

Ground 4

113. Ground 4 contests the Judge’s conclusion that ABNIC was the successful party for the purpose of exercising his discretion with respect to costs, and contends that he should have concluded that AWRIS was the successful party, or alternatively adjusted his order for costs by reference to issues on which ABNIC had failed.

114. ABNIC contends that the exercise of the Judge’s discretion with respect to costs was well within the range of discretionary decisions reasonably open to him, and that he has a significant advantage over any court of appeal in that regard having conducted the trial which provided the ability to assess the relative costs likely to have been incurred in respect of different issues.

115. The exercise of the discretion with respect to costs is pre-eminently one of those matters in which a trial Judge has a distinct and significant advantage over an appellate court. It is therefore an area in which appellate courts in most common law jurisdictions exercise considerable restraint before interfering. In this case, AWRIS has not attempted to demonstrate that the Judge applied a wrong principle or erred in law but, in essence, contends that he should have arrived at a different decision.

116. This ground has no real prospect of success. However, at the conclusion of the appeal, the Court of Appeal will of course be in a position to reconsider cost orders made by the Judge if there is a material change in the disposition of the case.

117. Accordingly, for these reasons, AWRIS should be granted permission to appeal in respect of ground 1 (limited to the issue with respect to insurable interest), ground 2 and ground 3 (limited to the issue relating to the alleged failure to establish that the loss occurred as a result of a risk covered by the re-insurance contract during the period of insurance cover). Permission is refused in respect of that aspect of ground 1 which relates to alleged non-disclosure/misrepresentation, that aspect of ground 3 which relates to the time at which notice of the claim was given to AWRIS, and ground 4.

(5) ABNIC’s application for permission to appeal on an additional ground

118. ABNIC submits that if AWRIS is granted permission to appeal, it should be granted permission to appeal on the ground that the Judge erred in deciding that the governing law of the re-insurance contract was English law. ABNIC contends that the Judge failed to correctly apply Article 8(2) of the Law on the Application of Civil and Commercial Laws in the DIFC¹⁷ and further contends that the Judge should have held that the jurisdiction with which the re-insurance contract had the closest connection was the UAE.

119. ABNIC contends that if this ground of appeal is upheld, all of the grounds of appeal pursued by AWRIS would necessarily fail, as all have been advanced by reference to English Law, without reference to UAE Law.

120. AWRIS doesn’t appear to have responded to this application.

121. Although the implications of the success of this ground are not pellucidly clear and have not been elaborated upon, the ground has sufficient prospect of success for the grant of permission.

Costs

122. The costs of the various applications considered in these reasons are reserved to the Court of Appeal.

Respondent’s notices

123. In the skeleton arguments served in respect of these matters reference is made to the prospect of Respondent’s notices being served pursuant to RDC 44.75. As permission to serve such a notice is not required, it is unnecessary to refer to those matters in these reasons.