Civil Law and UAE Marine Insurance Disputes

1. Introduction

Marine insurance disputes in the UAE arise when an insurer, shipowner, cargo owner, mortgagee, charterer, reinsurer, or another insured party disagrees about whether a maritime loss is covered and, if so, how much must be paid.

Typical disputes concern:

loss or damage to a vessel;

cargo damage or loss;

collision and grounding;

fire and explosion;

piracy and terrorism;

war risks;

seaworthiness and classification;

non-disclosure or misrepresentation;

breach of warranties;

delay and notice of loss;

valuation of the vessel;

insurable interest;

multiple insurance;

reinsurance;

exclusions;

jurisdiction and governing law.

The UAE's current maritime framework is Federal Decree-Law No. 43 of 2023 Concerning the Maritime Law. Its marine-insurance provisions begin at Article 280. Article 280 defines marine insurance as a contract under which the insurer compensates the insured for marine losses resulting from marine risks, while Article 281 requires the marine-insurance contract or amendment to be in writing. (UAE Legislation)

A particularly important feature of UAE marine-insurance litigation is that sophisticated policies frequently contain English-law clauses and London-market/Institute Clauses. Consequently, some UAE-related disputes are decided in the DIFC Courts by applying English marine-insurance law rather than the UAE Civil Transactions Law. The recent Al Buhaira v Arab War Risks Insurance Syndicate litigation illustrates this point. (DIFC Courts)

2. Meaning of Marine Insurance

Under Article 280 of the 2023 Maritime Law, marine insurance is essentially an agreement under which the insurer compensates the insured for losses arising from marine risks. The legislation also recognizes insurance for a specified or unspecified person and permits an insurance broker to conclude insurance for the benefit of the insured. (UAE Legislation)

Marine insurance can cover:

A. Hull insurance

Protects the physical vessel.

Examples:

collision;

grounding;

fire;

sinking;

storm damage;

machinery damage.

B. Machinery insurance

Covers specified machinery and equipment risks.

C. Cargo insurance

Protects goods transported by sea against covered risks.

D. Marine war-risk insurance

May cover risks such as:

war;

capture;

seizure;

terrorism;

mines;

certain hostile acts.

These risks are often dealt with separately from ordinary hull insurance.

E. Protection and Indemnity insurance

May cover liabilities to third parties, crew, cargo interests and other maritime liabilities.

F. Reinsurance

An insurer transfers some of its own insurance risk to another insurer/reinsurer.

3. Current UAE Legal Framework

Marine insurance disputes can involve several layers of law.

The 2023 Maritime Law replaced the earlier maritime framework, while preserving certain earlier implementing decisions temporarily to the extent they do not conflict with the new legislation. (UAE Legislation)

4. Written Form of Marine Insurance

Article 281 provides that the marine-insurance contract, and amendments to it, must be made in writing. A temporary insurance contract issued by the insurer serves as evidence for both parties until the final contract is issued. The legislation also contemplates policies issued in the name, to the order of, or to the bearer of the insured. (UAE Legislation)

Therefore, documentation becomes extremely important.

A marine-insurance dispute may require examination of:

policy;

schedule;

proposal form;

cover note;

endorsements;

warranties;

Institute Clauses;

survey reports;

classification documents;

registration documents;

correspondence;

claim notification;

broker communications.

5. Insurable Interest

Article 280 also provides that a party cannot benefit from marine insurance unless there is a legitimate interest in the absence of the insured risk. (UAE Legislation)

This means the court may ask:

What legitimate economic or legal interest did the claimant have in the vessel, cargo or insured subject matter?

Possible interests include:

ownership;

mortgage interest;

chartering interest;

cargo interest;

financial interest;

contractual liability;

another legally recognized maritime interest.

This prevents marine insurance from becoming a pure wagering arrangement.

6. Multiple Insurers

Article 282 deals with situations where a risk is insured under a single contract by several insurers.

Each insurer is generally liable for its proportionate share of the insured amount, rather than automatically becoming jointly liable for the entire amount. (UAE Legislation)

This can become complicated where:

several policies cover the same vessel;

primary insurance and reinsurance overlap;

war-risk insurance exists separately;

mortgagee insurance exists;

different insurers cover different risks.

7. Major Issues in UAE Marine Insurance Disputes

A. Was the loss an insured peril?

The claimant normally needs to establish that the event falls within the coverage.

Examples:

storm;

collision;

fire;

explosion;

sinking;

piracy;

war risk.

The insurer may respond that the loss falls within an exclusion.

B. Was there non-disclosure or misrepresentation?

This is one of the most significant issues.

A marine insurer may argue that material facts were not disclosed when the policy was placed.

Examples:

vessel was not actually trading;

vessel had been laid up;

classification had been withdrawn;

registration had expired;

intended voyage differed from declared voyage;

vessel was operating in a high-risk area;

condition of the vessel was materially worse than represented.

The recent BETA litigation is an important UAE example.

8. Case Law

Case 1: Al Buhaira National Insurance Company v Horizon Energy LLC & Al Buhaira International Shipping Inc — [2021] DIFC CFI 098

This is one of the most important modern UAE-related marine-insurance decisions.

The dispute concerned the tanker BETA, insured under:

a Marine Hull and Machinery Policy; and

a Marine Hull War Policy.

The vessel had an insured value of approximately US$70 million.

The insurer sought declarations that it could avoid the policies. The policies were governed by English law. (DIFC Courts)

The court ultimately found serious problems concerning the vessel's classification and representations made to the insurer. The court found that the vessel was not in class when the policies were entered into and concluded that the insurer was entitled to avoid both policies for deliberate or reckless breach of the duty of fair presentation. (DIFC Courts)

Principle

Material information concerning:

classification;

condition;

trading status;

registration;

can be critical to marine underwriting.

Importance

The case demonstrates that misrepresentation and non-disclosure can go to the foundation of the insurance contract.

9. Case 2: Horizon Energy LLC v Al Buhaira National Insurance Company [2022] DIFC CA 015

The dispute reached the DIFC Court of Appeal.

One issue was whether Article 110 of the former UAE Insurance Law prevented the DIFC Courts from hearing an insurer's claim for declaratory relief concerning a marine policy.

The Court of Appeal held that the statutory dispute-resolution mechanism did not deprive the DIFC Courts of jurisdiction over the insurer's claim, including a negative declaration that the policy had been avoided. (DIFC Courts)

Principle

Marine-insurance disputes can raise two separate questions:

Does the insurer owe indemnity?

Which court has jurisdiction to determine that question?

Importance

Jurisdiction must be analysed separately from the substantive insurance claim.

10. Case 3: Al Buhaira National Insurance Company v Horizon Energy — [2022] DIFC CFI 098

In the earlier procedural stage of the same broader BETA litigation, the DIFC Court considered the interaction between the UAE insurance-dispute mechanism and DIFC jurisdiction.

The court rejected an application seeking to prevent the DIFC proceedings and awarded costs against the applicant. The underlying dispute concerned the same Marine Hull and Marine War policies covering BETA. (DIFC Courts)

Principle

A statutory insurance complaint procedure does not necessarily eliminate the jurisdiction of a court otherwise competent to determine an insurance dispute.

Importance

This case is particularly useful for exam questions concerning:

insurance jurisdiction;

declaratory relief;

DIFC Courts;

UAE Insurance Law;

marine insurance.

11. Case 4: Al Buhaira National Insurance Company v Arab War Risks Insurance Syndicate — [2024] DIFC CFI 013 / judgment 2025

This case concerns marine war-risk reinsurance arising out of the BETA policies.

ABNIC had insured BETA and obtained reinsurance from the Arab War Risks Insurance Syndicate.

The DIFC Court considered:

marine war-risk insurance;

reinsurance;

implied contractual terms;

costs of defending underlying proceedings;

governing law;

Institute War Clauses;

incorporation of underlying policy terms. (DIFC Courts)

The court held that an implied term existed requiring the reinsurer to indemnify ABNIC for properly incurred costs and expenses connected with defending claims arising from the underlying Marine Hull War Policy. (DIFC Courts)

Principle

A reinsurance contract is legally distinct from the underlying insurance contract.

The terms of an underlying policy cannot automatically be assumed to be incorporated into the reinsurance contract.

Importance

This distinction is fundamental:

Insurance contract ≠ reinsurance contract.

12. Case 5: Al Buhaira National Insurance Company v Arab War Risks Insurance Syndicate — [2026] DIFC CA 003

The matter subsequently reached the DIFC Court of Appeal.

The litigation concerned the same BETA marine war-risk reinsurance arrangement and issues including:

applicable law;

Institute Clauses;

London-market wording;

reinsurance;

marine war risks;

the relationship between UAE and English legal principles. (DIFC Courts)

A significant issue was whether the reinsurance contract had an express or implied choice of English law.

The judgment discusses the significance of internationally used marine-insurance wordings and the circumstances in which English marine-insurance law may be relevant. (DIFC Courts)

Principle

A marine policy's standard London-market language can be important evidence concerning the intended legal framework, but the governing law of the underlying insurance does not automatically become the governing law of the reinsurance contract.

Importance

This is highly relevant to UAE marine reinsurance disputes.

13. Case 6: Ahmed Mohamed Eid Al Yahad Al Zaabi v Al Buhaira National Insurance Company — [2024] DIFC TCD 002

This is a particularly useful modern yacht-insurance case.

The claimant sought approximately AED 1.365 million following a fire and explosion involving the yacht Dazaz.

The policy provided for DIFC jurisdiction and English governing law. Consequently, the court considered the Marine Insurance Act 1906, the Insurance Act 2015 and related English insurance principles. (DIFC Courts)

The insurer relied upon matters including:

misrepresentation;

non-disclosure;

fair presentation;

breach of warranties;

vessel condition;

intended use;

survey requirements.

The court concluded that the claimant had breached relevant warranties concerning the vessel's intended use and other requirements and dismissed the claim. It declared that the insurer was entitled to avoid, repudiate or cancel the insurance contract. (DIFC Courts)

Principle

The classification of the vessel's intended use can be extremely important.

A vessel insured as a private pleasure craft may present a materially different risk if it is actually intended to be used primarily for commercial purposes.

14. Case 7: Union Insurance PJSC v International Precious Metals Refiners LLC — [2022] DIFC CFI 064

This case involved insurance issues connected with the BETA/Horizon litigation and demonstrates the interaction between insurance disputes, jurisdiction and the consequences of earlier marine-insurance proceedings.

The court considered the effect of the Horizon Energy decision and the contractual wording providing that the policy was governed by English law while disputes were submitted to the courts of the UAE. (DIFC Courts)

Principle

The wording:

“governed by English law”

and

“exclusive jurisdiction of the Courts of the United Arab Emirates”

can create two distinct questions:

What substantive law governs?

Which court has jurisdiction?

These should not be conflated.

15. Case 8: Nessim v Nader — [2024] DIFC CFI 013

This case concerned a US$70 million marine insurance claim and proceedings involving the UAE Insurance Authority and an Insurance Dispute Resolution Committee.

The insurer alleged, among other things:

non-disclosure;

cold-stacking of the vessel;

classification problems;

registration issues;

breach of warranties;

questions concerning the period of insurance;

whether the vessel's loss was caused by an insured peril. (DIFC Courts)

Principle

Marine insurance disputes often require the court to analyse the entire factual history of the vessel rather than simply the immediate event causing the loss.

Importance

The case illustrates the connection between:

underwriting → vessel status → warranties → causation → coverage.

16. Marine Warranties

A marine-insurance warranty is a particularly important contractual mechanism.

It may concern:

trading area;

vessel classification;

vessel condition;

navigation;

use;

crew;

mooring;

safety arrangements;

inspection;

maintenance.

In the Dazaz case, the court considered warranties relating to intended use, condition survey and leaving the vessel unattended. The judgment applied English marine-insurance legislation because the policy selected English law. (DIFC Courts)

Important point

The legal effect of a warranty depends on the governing law.

Therefore, one must not automatically transfer an English-law warranty doctrine into a mainland UAE-law dispute.

17. Seaworthiness and Classification

A marine insurer is particularly concerned with whether a vessel is:

properly registered;

properly classified;

seaworthy;

appropriately maintained;

operated in accordance with declared conditions.

The BETA litigation demonstrates the importance of classification.

The court found that BETA was not in the stated classification when the policies were entered into and treated the representations concerning classification as highly material to underwriting. (DIFC Courts)

Practical consequence

A false statement such as:

“The vessel is currently classed with an approved classification society”

can become extremely important if the vessel is actually unclassed.

18. War-Risk Insurance

War-risk insurance is different from ordinary marine hull insurance.

Ordinary hull insurance may cover conventional maritime perils, while war-risk policies can separately address:

war;

hostile acts;

capture;

seizure;

mines;

terrorism;

piracy and related risks.

The BETA dispute involved separate Hull and Machinery and Marine Hull War policies. The war policy insured BETA against specified hull-war and related risks. (DIFC Courts)

This creates difficult causation questions where a vessel disappears.

For example:

Was the vessel lost because of an ordinary marine peril or because of a war peril?

The answer may determine which insurer bears the loss.

19. Reinsurance Disputes

Reinsurance creates a second contractual relationship.

First contract

Insurer ↔ Shipowner/insured

Second contract

Insurer ↔ Reinsurer

The reinsurer's obligations depend upon the reinsurance contract itself.

The 2025 ABNIC v AWRIS judgment is especially useful because the court considered whether terms from the underlying policy were incorporated into the reinsurance contract and whether the reinsurer had an implied obligation to meet certain defence costs. (DIFC Courts)

20. Governing Law

This is one of the most important issues in UAE marine insurance.

A policy may state:

“This policy shall be governed by English law.”

A separate clause may state:

“The parties submit to the jurisdiction of the courts of the UAE.”

These are not contradictory.

The first concerns substantive law.

The second concerns forum/jurisdiction.

The BETA litigation demonstrates how sophisticated marine policies can combine UAE jurisdictional language with English governing law and London-market insurance terminology. (DIFC Courts)

21. UAE Mainland Courts vs DIFC Courts

This distinction is essential.

Mainland UAE dispute

The court will generally begin with:

UAE Maritime Law;

UAE insurance legislation;

UAE Civil Transactions Law;

UAE procedural law;

applicable Emirate legislation.

DIFC dispute

The court may instead apply:

DIFC legislation;

DIFC Court Rules;

the governing law selected by the parties;

English law where validly selected.

The Dazaz case is an excellent illustration: the policy selected English law, so the court applied English marine-insurance legislation to relevant issues. (DIFC Courts)

22. Common Defences by Marine Insurers

An insurer may argue:

1. No insured peril

The event is outside the coverage.

2. Exclusion

The loss falls within an express exclusion.

3. Misrepresentation

The insured made an inaccurate statement when obtaining insurance.

4. Non-disclosure

The insured failed to disclose material information.

5. Breach of warranty

A contractual warranty was violated.

6. Lack of insurable interest

The claimant lacked a legitimate interest in the insured subject matter.

7. Late notification

The policy's claims-notification requirements were not complied with.

8. Unseaworthiness

The vessel's condition or operation violated applicable requirements.

9. Improper use

The vessel was used differently from the declared purpose.

10. War-risk exclusion

The loss falls within war risks excluded from ordinary marine cover.

23. Common Claims by the Insured

The insured may argue:

the loss clearly falls within the insured peril;

the insurer wrongly characterized a condition as a warranty;

the alleged non-disclosure was immaterial;

the insurer waived the breach;

the insurer accepted premiums with knowledge of the relevant facts;

the exclusion does not cover the particular loss;

the loss occurred within the policy period;

the insurer failed to establish an applicable exclusion;

the insurer incorrectly interpreted the policy;

the insurer failed to comply with the agreed claims procedure.

24. Causation

Causation is central.

Suppose a ship sinks after an explosion.

The court may need to determine whether the proximate cause was:

Mechanical failure → explosion → sinking

or

War-related attack → explosion → sinking

or

Unseaworthiness → explosion → sinking.

Different causes can lead to different insurance consequences.

The BETA litigation demonstrates the complexity of determining whether a missing vessel was subject to ordinary marine risks or war risks. The proceedings involved separate hull and war policies and extensive analysis of the relevant risk allocation. (DIFC Courts)

25. Marine Insurance and Evidence

Marine disputes are heavily evidence-based.

Important evidence may include:

The BETA cases demonstrate the importance of evidence about classification, trading status, registration and the circumstances surrounding the vessel's disappearance. (DIFC Courts)

26. Practical Example

Assume a UAE company insures a tanker for US$50 million.

The policy states:

vessel must remain classed;

vessel may trade only within specified waters;

war risks are separately insured;

English law governs the policy;

UAE courts have jurisdiction.

The tanker disappears.

The insured claims:

“The vessel was lost during the policy period, so the insurer must pay.”

The insurer responds:

“The vessel had lost classification before the policy was issued, and that fact was not disclosed.”

The court would need to examine:

What law governs?

Which court has jurisdiction?

Was the classification representation accurate?

Was the information material?

Was there a contractual warranty?

Was the vessel seaworthy?

Did the loss occur during the insured period?

Was the cause an insured marine peril?

Was it instead a war risk?

What is the legal consequence of any breach?

This illustrates why marine insurance disputes can become technically complex.

27. Relationship Between Marine Law and General Civil Law

Marine insurance is primarily governed by the special maritime regime where applicable.

The general civil-law principles remain important for issues such as:

contract formation;

interpretation;

good faith;

damages;

causation;

contractual obligations;

invalidity;

compensation.

However, the special maritime legislation may take priority where it specifically regulates the issue.

This follows the general legal principle:

Special maritime rules govern maritime matters to the extent they specifically address the issue; general civil rules supplement them where appropriate.

28. Key Legal Issues for UAE Marine Insurance Litigation

Issue 1 — Coverage

Is the loss covered?

Issue 2 — Insurable interest

Did the claimant possess a legitimate interest?

Issue 3 — Policy interpretation

What does the policy actually mean?

Issue 4 — Governing law

Is UAE law or another legal system applicable?

Issue 5 — Warranty

Was a marine warranty breached?

Issue 6 — Disclosure

Was a material fact omitted?

Issue 7 — Causation

What caused the loss?

Issue 8 — Exclusions

Does an exclusion remove the loss from coverage?

Issue 9 — Jurisdiction

Which court or tribunal can determine the dispute?

Issue 10 — Reinsurance

Does the reinsurer owe the insurer indemnity?

29. Important Case-Law Principles — Quick Table

30. Examination / Revision Notes

Definition

Marine insurance is insurance against losses arising from marine risks.

Current principal legislation

Federal Decree-Law No. 43 of 2023 Concerning the Maritime Law.

Important provisions

Article 280 — marine insurance contract and legitimate interest.

Article 281 — written form.

Article 282 — multiple insurers and proportionate liability.

(UAE Legislation)

Major dispute areas

Coverage + disclosure + warranty + seaworthiness + causation + exclusions + jurisdiction + governing law + reinsurance.

Six particularly important cases

Al Buhaira v Horizon Energy

Horizon Energy v Al Buhaira

Al Buhaira v AWRIS

Al Buhaira v AWRIS (Court of Appeal)

Ahmed Al Zaabi v Al Buhaira

Nessim v Nader

31. Conclusion

UAE marine-insurance disputes are governed by a combination of special maritime legislation, insurance law, general contract principles and, in sophisticated international policies, the chosen foreign governing law.

The current Maritime Law expressly regulates marine insurance, including the definition of marine insurance, legitimate interest, written policies and multiple insurance. (UAE Legislation)

The recent UAE-related case law shows that the most difficult disputes frequently concern classification, seaworthiness, warranties, non-disclosure, fair presentation, causation, war risks, jurisdiction and reinsurance. The BETA litigation is especially significant because it demonstrates how a UAE marine-insurance dispute can involve UAE insurers, UAE courts, DIFC proceedings, foreign governing law, international Institute Clauses and reinsurance simultaneously. (DIFC Courts)

Core principle:

A UAE marine-insurance dispute cannot be resolved merely by asking whether a vessel was lost. The court must determine the applicable legal regime, the scope of the policy, the insured risk, the cause of the loss, compliance with warranties and disclosure obligations, applicable exclusions, and the contractual allocation of jurisdiction and governing law.