Jurisdictions involved
UK and United Arab Emirates (UAE).
The business and background
The client was an insurance broker in the United Arab Emirates (UAE) who faced a lawsuit from an insurance company for the commercial loss of profit relating to reinsurance agreements with underwriters in the UK. One specific issue was the absence of a critical condition in the treaty agreement between the parties relating to “premium income limit”.
What we did
We conducted an internal investigation surrounding the absence of the condition from the agreement and whether this was the result of professional negligence or fraud. This involved reconciling the premiums vs. claims to quantify the loss to the insurance company. Triggering the right to audit in the agreement allowed us to investigate the books and records of the insurance company to validate the claims it made in the lawsuit.
We prepared an overarching expert report based on the court’s instructions and thereafter rebuttal reports in response to the court-appointed expert who recommended conclusions that were not adequately substantiated.
The outcome
We produced several reports and managed to reduce the “loss of profit” and therefore the liability against our client from AED 60m to AED 7m.
The agreement between our client and the insurance company calls for arbitration in the DIFC in the event of a dispute. However, the onshore Court of First Instance accepted the lawsuit and dismissed our motion calling for arbitration based on right of jurisdiction/audience. Proceedings in onshore courts in the UAE are complex and at times unpredictable and evidence is not always considered. However, we managed these challenges by working closely with the court-appointed expert and discussions with the concerned parties to reach a settlement.
