Dubai Court Of Cassation Ruling Nullifies Arbitration Clauses Within UAE Insurance Policies

In a recent judgment (Case No. 440 of 2024, Civil Arbitration), the Dubai Court of Cassation has confirmed the position on the enforceability of arbitration clauses embedded in general terms of insurance policies. This ruling highlights critical considerations for insurers, policyholders, and legal practitioners dealing with arbitration clauses in the UAE.

Factual Background

The dispute arose when the insured, who operated a business affected by COVID-19 restrictions in Bahrain, sought compensation from their insurance provider under a multi-risk insurance policy covering a specified period from January 1, 2020, to December 31, 2020. Following the pandemic-induced business closures, the appellants suffered substantial financial losses and sought compensation with 12% annual interest.