UAE Trends and Developments Contributed by: Amr Bajamal, NHB Legal
A Conundrum Within the Insurance Law This article explores an important aspect of the appli- cation of the UAE’s primary insurance legislation, Federal Law No 48 of 2023 Regulating Insurance Activities (the “Insurance Law”). It is known to indus- try professionals that, pursuant to Article (101) of the Insurance Law, if an insured party wishes to pursue a claim against an insurer, then the following mecha- nism applies: • the insured party must file the claim before the Insurance Disputes Committee, which operates under the Banking & Insurance Disputes Unit of the UAE Central Bank (this committee is known by the short name Sanadak); • the committee issues a decision on the claim; and • a party who wishes to challenge the committee’s decision must do so within 30 days of its issuance by way of appeal to the court of appeal, failing which, the committee’s decision becomes enforce- able. Given that the Insurance Law does not define the term “court of appeal”, this means that the legislation intended for this should be determined in accordance with the general jurisdictional principles. These are, in turn, embodied within the UAE Civil Procedures Law, which primarily establishes jurisdiction based on: • the jurisdiction contractually selected by the par- ties; • the domicile of the defendant; or • the location where the incident giving rise to the claim took place. Therefore, when challenging decisions of the Insur- ance Disputes Committee, one would normally apply the same assessment as if the claim were being filed directly to the courts in the first instance. An interest- ing issue arises when you have an insurance policy that includes an arbitration clause. The Insurance Law permits the use of arbitration as a dispute resolution mechanism in insurance disputes; however, it requires such clauses to be included in a separate annexure or schedule to the insurance policy. As such, if an arbitration clause exists and an insured party files a claim before the Insurance Disputes Com-
mittee, the latter by default becomes the first body to engage in determining the validity of the arbitra- tion clause if an insurer asserts its right to the arbi- tration clause. If the committee rules that the arbi- tration clause is not valid, then an insurer would be able to challenge this decision and seek recognition of the arbitration clause before the competent court of appeal. Now assume the insurance policy in question involves: • an insured party that is a Dubai International Finan- cial Centre (DIFC) or Abu Dhabi Global Market (ADGM) entity; or • an arbitration clause that expressly states that the arbitration should be seated in the DIFC or ADGM. I s it possible for a party to challenge jurisdiction before the Insurance Disputes Committee due to the insurer being a DIFC or ADGM entity? To answer this question, the central issue to be resolved is whether the Insurance Law applies to insurers incorporated within the DIFC and ADGM. The short answer is no. This is because by way of their establishing laws, all civil and commercial federal and local emirate laws are disapplied within the DIFC and ADGM. Therefore, if any of the jurisdictional gateways to the DIFC or ADGM courts exist, including the fact that the insurer is an entity incorporated within one of the said freezones, the insurer may challenge the jurisdic- tion of the Insurance Committee on the grounds that the entirety of the Insurance Law does not apply to the insurer. As such, any claims against the insurer will have to be pursued in the usual way before the competent court. This special designation for DIFC entities was con- firmed by the Dubai Conflict of Jurisdiction Tribunal in Petition No 6 of 2025. This petition involved a claim against a reinsurance company in relation to cover- age liability for losses arising out of insured incidents that took place outside the DIFC. The claim was initi- ated by a Dubai-based insurance company against five reinsurers. One of the reinsurers happened to be a DIFC incorporated entity. The claimant insurance
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