Notable cases

Al Buhaira National Insurance Company v (1) Horizon Energy LLC

(2) Al Buhaira International Shipping Inc (2021) CFI 098

The Claimant sought an anti-suit injunction restraining the Defendants from continuing proceedings before the Sharjah Court of First Instance and/or for an order that they discontinue those claims.

The application came before H.E. Deputy Chief Justice Ali Al Madhani at a hearing on 20 September 2022, who dismissed the application and handed down a judgment dated 9 November 2022. The case contains valuable consideration of the role of comity where the DIFC Courts is called upon to address conflicts of jurisdiction between the different courts of the UAE.

The Claimant is an insurer under a Hull and Machinery Policy and a War Risks Policy pursuant to which the Claimant insured the First Defendant and/or subsidiary and/or affiliated companies and/ or other interests. Several vessels were insured under the policies, one of which was the motor vessel “BETA” (the “Vessel”) which had an insured value of USD 70 million.

The Second Defendant is a subsidiary of the First Defendant and the owner of the Vessel. In or around December 2019, the Vessel was discovered to be missing. The Claimant notified the First Defendant of its decision to avoid the policies and on the same day issued proceedings in the DIFC Courts seeking declarations that the policies were avoided ab initio and that the Claimant was not liable under the policies by reason of their avoidance or alternatively that the First Defendant’s claim did not come within the scope of the policies.

The First Defendant challenged the jurisdiction of the DIFC Courts which was dismissed by Justice Roger Giles on 27 April 2022, who held that the DIFC Courts had jurisdiction by virtue of the Law and the jurisdiction clause in the policies. This decision was appealed and a permission to appeal application was refused by Chief Justice Zaki Azmi on 5 August 2022.

On 13 June 2022, the Insurance Authority Committee dismissed the complaints made by both Defendants and found that it had no jurisdiction over the dispute because the parties had chosen English law as the applicable law in case of a dispute and that the DIFC Courts, which was already dealing with the claim, had valid jurisdiction over the dispute. On 7 July 2022, both Defendants commenced proceedings before the Sharjah Court seeking an order that the Insurance Authority Committee’s decision be set aside and the matter be referred to the Insurance Authority, or in the alternative, an indemnity under the policies in respect of the loss of the Vessel.

In determining the anti-suit injunction application, the Claimant’s case was that the Defendants’ conduct in bringing and continuing the proceedings before the Sharjah Court was oppressive and vexatious and that an injunction was required to prevent the Defendants from continuing to pursue those proceedings. The Claimant’s application was made on three grounds.

Firstly, the Claimant asserted that the First Defendant was taking steps in these proceedings which were intended to delay the proceedings in the DIFC Courts. Deputy Chief Justice Madhani found that the Sharjah proceedings were not oppressive or vexatious. The question for the Courts was whether the Claimant should be protected from unconscionable conduct elsewhere and not whether such conduct justified restraining the Defendants elsewhere. As such, the Deputy Chief Justice Madhani held that an anti-suit injunction constraining the Defendants from continuing the Sharjah proceeding would not be justified under such a ground.

Secondly, the Claimant submitted that the Defendant were seeking to relitigate two issues in the Sharjah proceedings: (1) whether the DIFC Courts have jurisdiction and, (2) whether an Insurance Authority Committee is a judicial tribunal. The sequence in which proceedings were issued was considered and Deputy Chief Justice Madhani found that this in and of itself was of little significance.

In determining the issues common to the DIFC proceedings and the Sharjah proceedings, Deputy Chief Justice Madhani held that overlap between the issues is to be expected where there are parallel proceedings it is for each court to decide how to deal with it.

Further, it was held that there was no basis for the DIFC Courts to interfere with the process of the Sharjah Court and that although there may be issues common to both proceedings this was not in and of itself sufficient to find vexatious and oppressive conduct which justifies granting an anti-suit injunction. Deputy

Chief Justice Madhani found that the Defendants were contractually entitled to pursue a claim in the Sharjah Court and that they maintained their objection to the jurisdiction of the DIFC Courts and that the Courts should be cautious about interfering with the process of another Courts and injuncting the Defendants on the basis of judicial advantage and comity.

Thirdly, the Claimant claimed that in the Sharjah proceedings the Defendants sought to have the same issues determined as were to be considered in the proceedings before the DIFC Courts. Deputy Chief Justice Madhani found that the DIFC Courts should be particularly slow to interfere with the process of another UAE Court to prevent the risk of conflicting judgments from occurring in the first place. The Claimant’s ground was therefore dismissed. As such, the Claimant’s application for an anti-suit injunction was dismissed in its entirety.