Dubai floods dispute produces early ruling on jurisdiction in a multi-party reinsurance dispute

Clyde & Co’s UAE insurance team, led by Alfred Thornton, successfully resisted a jurisdiction challenge on behalf of local and international reinsurers before the Dubai Conflict of Jurisdiction Tribunal, securing an early ruling in favour of the Dubai International Financial Centre courts.

Introduction

The unprecedented April 2024 floods in Dubai continue to raise significant legal issues before the local courts. In the latest of these an important early ruling by the Dubai Conflict of Jurisdiction Tribunal (CJT) has clarified which Dubai court has jurisdiction to hear a reinsurance dispute concerning claims arising from the 2024 floods.

The CJT was established as a joint initiative between the ‘onshore’ Dubai civil courts and the Dubai International Financial Centre (DIFC) Courts to make rulings on the proliferation of disputes concerning which of these courts has jurisdiction over specific cases issued in the Emirate. CJT members comprise judges from both the Dubai Courts and the DIFC Courts.

The CJT decision in Application No. 6/2025 is significant for the UAE insurance market (and more generally) in that it confirms that jurisdiction in multi-party disputes is determined on the basis of Dubai Law No. 2 of 2025 (the DIFC Courts Law), and that the CJT is prepared to intervene proactively where one of the jurisdictional gateways in the DIFC Courts Law is satisfied. 

Both the DIFC Courts¹ and the ‘onshore’ Dubai Courts² have previously reached the same conclusion. However, this is the first occasion that the CJT has intervened proactively at an early stage in proceedings to make a decisive ruling on jurisdiction, thereby preventing the need for lengthy (and costly) parallel proceedings.

Background

The proceedings concerned a reinsurance dispute between a group of local and international reinsurers, one of which was established in the DIFC (Reinsurers), and a local Dubai insurance company (Insurer). The Insurer had reached a settlement of a high value property insurance claim arising from the 2024 Floods. Reinsurers contended that they were not liable for the claims under the reinsurance agreements, which contained a dispute resolution provision conferring exclusive jurisdiction on the ‘competent’ UAE Courts.

The Reinsurers commenced proceedings in the DIFC Courts seeking various declarations in relation to the reinsurance agreements. Before those proceedings were served, the Insurer commenced proceedings before the Dubai Courts. Following service of the DIFC proceedings, the Insurer challenged the jurisdiction of the DIFC Courts and, shortly thereafter, applied to the CJT seeking a determination that jurisdiction lay with the Dubai Courts. 

On 26 January 2026, the CJT held that the DIFC Courts had jurisdiction on the basis that one of the Reinsurers was a DIFC Establishment. 

Legal reasoning

In reaching its judgment, the CJT had regard to Dubai law governing the issue, specifically the DIFC Courts Law, rather than by reference to federal civil and commercial procedural rules, which do not apply within financial freezones such as the DIFC. The CJT’s approach reflects an important constitutional point: the DIFC Courts and the Dubai Courts are both courts of the Emirate of Dubai, and the allocation of jurisdiction as between them in the geographic area of the Emirate of Dubai is governed by Dubai law. 

Article 14(a) of the DIFC Courts Law provides that the DIFC Courts have exclusive jurisdiction over civil and commercial claims brought by or against DIFC Establishments, or in proceedings to which such entities are parties. Article 2 of the DIFC Courts Law defines DIFC Establishments broadly to include establishments licensed, registered, or permitted to operate in or through the DIFC. The CJT was satisfied that the DIFC Courts had exclusive jurisdiction over the entire dispute on the basis that one of the Reinsurers was a licensed entity registered and conducting business solely within the DIFC.  The CJT disagreed with the Insurer’s arguments that the underlying insurance policy had no substantive link to the DIFC, nor were the insured losses sustained in the DIFC.

The CJT emphasized that the jurisdiction conferred on the DIFC Courts under the DIFC Court Law derives from a specific statutory provision. As such, it prevails over the general jurisdiction provisions of the Dubai Courts whenever any of the jurisdictional thresholds set out in Article 14 are met. 

The practical significance of the CJT’s conclusion is considerable in any multi-party dispute setting. It confirms that the presence of a single DIFC Establishment is sufficient to give the DIFC Courts exclusive jurisdiction, notwithstanding that other parties are based onshore or outside the UAE, or that the underlying insured losses or aspects of the performance of the contract took place outside the DIFC. 

Proactive and early intervention

The principle that the involvement of a DIFC Establishment is sufficient to confer DIFC jurisdiction has long been reflected in the jurisprudence of both the DIFC Courts³ and the Dubai Courts⁴ with respect to commercial disputes. Notwithstanding that, jurisdictional contests have remained a recurrent feature of reinsurance litigation before the DIFC Courts, with parties seeking to commence or maintain parallel onshore proceedings and to raise preliminary jurisdictional challenges in circumstances where the governing law is Dubai or UAE law, and by reference to Federal procedural rules on jurisdiction. 

Parallel proceedings have hitherto been possible because a conflict of jurisdiction usually requires the existence of an actual and established dispute between two judicial bodies as to jurisdiction over the same matter, rather than the mere existence of parallel proceedings or the filing of a pending jurisdictional challenge before one court. The invariable effect has been that parties commence tactical parallel proceedings, which inevitably cause delay, create duplication and result in irrecoverable costs being incurred.

The significance of the CJT’s decision in this instance is that it was prepared to intervene at an early stage and determined jurisdiction to prevent the continuation of parallel proceedings.

Significance for the reinsurance market

The judgment is significant for the reinsurance context, which frequently involves layered reinsurance arrangements, multiple parties and interrelated liability issues. Once one of the parties to the dispute qualifies as a DIFC Establishment, Dubai law directs that the court with exclusive jurisdiction is the DIFC Court, irrespective of where the insurer is based, where the underlying claims arose or were handled, or where performance of the reinsurance contract occurred. 

A significant advantage of the DIFC Courts, unlike the ‘onshore’ courts, is that they will order declaratory relief, which is of great practical use to reinsurers looking to avoid prolonged and costly proceedings. The approach adopted by the CJT confirms the DIFC’s standing as a regional financial services and reinsurance hub from which international reinsurers can conduct business in a manner more closely aligned with international reinsurance practice. The certainty provided by the decision reduces the scope for unnecessary and costly preliminary jurisdiction litigation, and helps preserve the utility of the DIFC Courts as a forum in which declaratory relief may be obtained efficiently in complex commercial disputes.

The Clyde & Co team who represented the successful reinsurers were; Alfred Thornton, Moamen Elwan, Robert James and Masa Abu-Issa. 

¹Nest Investment Holding Lebanon S.A.L. & Ors v Deloitte & Touche (M.E.) (CA-011-2018)
²Dubai Court of Cassation Challenge No. 940 of 2025 dated 3 September 2025
³See Corinth Pipeworks SA v. Barclays Bank plc [2011] DIFC CA 002 (22 January 2012)
⁴Dubai Court of Cassation Challenge No. 334 of 2025 dated 28 May 2025