Court Jurisdictional Challenges in Multi-Party Insurance Disputes
Transport & Insurance Focus
Since 2007, the UAE has established a specialized system for resolving insurance disputes through Insurance Dispute Resolution Committees (“IDRCs”), significantly altering the landscape of insurance claim litigation.
Law Update: Issue 376 – Transport & Insurance
Sakher AlaqailehSenior Counsel, Transport & Insurance
Nazly SadikParalegal, Transport & Insurance
Since 2007, the UAE has established a specialized system for resolving insurance disputes through Insurance Dispute Resolution Committees (“IDRCs”), significantly altering the landscape of insurance claim litigation. These committees were introduced under Article 110 of Federal Law No. 6 of 2007 on the Organization of Insurance Operations, as amended (“Federal Law No. 6 of 2007”). They were designed to handle disputes between insured parties and insurance companies, ensuring specialized forums address the complexities of insurance claims before resorting to general court litigation.
The enactment of Federal Law No. 48 of 2023 Regulating Insurance Activities (“Federal Law No. 48 of 2023”) repealing Federal Law No. 6 of 2007, further reinforced this framework by establishing the “Sanadak” Ombudsman Unit (“Sanadak”), an independent entity providing an alternative dispute resolution mechanism for insurance and financial services. Sanadak operates under the authority of the Central Bank, as established by Federal Law No. 14 of 2018 regarding the Central Bank & Organization of Financial Institutions and Activities (“Federal Law No. 14 of 2018”).
This law, alongside Decision No. 1659/2023 on the Establishment of an Ombudsman Unit for the United Arab Emirates ("Ombudsman Unit Regulation"), delegates the Central Bank’s authority over insurance disputes to Sanadak. Federal Law No. 48 of 2023 further mandates the establishment of one or more committees under the Banking and Insurance Disputes Resolution Unit to resolve disputes arising from insurance contracts, business, and services.
This article explores the jurisdictional boundaries of the IDRC, now operating under the umbrella of Sanadak and their primacy over direct court litigation in light of recent legal developments and judicial interpretations. For clarity and consistency, both the former Insurance IDRCs and the newly established Sanadak will be collectively referred to as ("Committees") throughout this article
The mere inclusion of additional parties does not strip the Insurance Dispute Resolution Committee of jurisdiction, so long as the claim against the insurer is properly filed, divisible, and falls within the scope of insurance coverage.
The establishment of the Committees was driven by the objective of creating a specialized forum for resolving insurance-related disputes efficiently and effectively. This principle was further reinforced by the Board Resolution No. 33 of 2019 Concerning the Regulation of Committees for the Settlement and Resolution of Insurance Disputes (“Resolution No. 33 of 2019”) In addition, the Central Bank of the UAE(“CBUAE”) has issued Decision No. 10/1/2024 A (“Decision No. 10/1/2024 “) which is consider a replacement to Resolution No. 33 of 2019.
Under Article 4 of Resolution No. 33 of 2019 and the Decision No. 10/1/2024 (“Article 4”), the committees hold exclusive jurisdiction over all insurance disputes, regardless of the claim's value, as long as the claim is filed by the insured, beneficiaries, or affected parties against the insurance company ONLY. This exclusivity extends to all branches and types of insurance disputes arising from insurance contracts, activities, or services. The law explicitly bars claimants from bypassing the Committees and filing insurance disputes directly before the courts, ensuring that the committees remain the primary avenue for insurance-related litigation.
Article 4 has generally been interpreted to mean that if a claim is brought solely against the insurance company, the Committee holds exclusive jurisdiction, and courts cannot entertain such a claim unless it has first been heard by the committee. However, the situation becomes more complex when the dispute includes additional parties, such as the tort-feasor or other jointly liable defendants in the proceedings.
Despite the law’s apparent clarity, a growing body of case law has revealed a significant judicial contradiction—particularly when insurance claims involve multiple parties. While the law affirms the Committees exclusive jurisdiction when the claim is directed solely against the insurer, the joinder of additional parties has resulted in inconsistent judicial interpretations as committees usually reject to hear the claim if there is addition parties in the claim other than the insurance company so as per the several judgments issued by the committees, the presence of other defendants shifts jurisdiction to the general courts, while other case law judgments maintain that the Committee retains authority if the core claim is divisible and primarily concerns the insurer.
The importance of adhering to the prescribed dispute resolution pathway has been firmly established in UAE jurisprudence, notably by referring to the general principal issued in cassation case judgment (Case No. 5 of 2022). this principal offer critical judicial interpretation of Article 4, especially in cases involving multiple defendants, where the claims are potentially divisible. They clarify the conditions under which the jurisdiction of the Committees remains intact, even when other non-insurable parties are joined in the proceedings.
In Dubai Court of Cassation Case No. 625/2023 Civil, the court relied on the principle laid down in Case No. 5 of 2022. In this case, the second defendant (the insurance company) raised a defence of inadmissibility on the grounds that the claim had been filed directly before the court, bypassing the prescribed route through the Committee. The court upheld this defence, emphasizing that the dispute arose under an insurance contract/policy—placing it within the Committee’s jurisdiction as outlined in Article 110 of Federal Law No. 6 of 2007 (as amended), which mandates that all insurance contract disputes be resolved first through the specialized committees.
Crucially, the court reaffirmed that Article 4 of Decision No. 33 of 2019 grants the Committees exclusive jurisdiction over insurance disputes “against the company only,” regardless of the claim’s value. The General Assembly of the Dubai Court of Cassation(“General Assembly”) interpreted this provision to mean that when a claimant files a dispute with the Committee seeking entitlements from the insurer, the dispute must be limited solely to the insurance company. The presence of other parties—such as tortfeasors or co-defendants—does not alter this requirement, nor does it justify bypassing the Committee and filing directly before the general courts.
Importantly, the Court clarified that where the subject matter of the dispute is divisible, and the claims against the other parties are not related to the insurer’s liability under the insurance contract, the Committee retains jurisdiction. Thus, the mere inclusion of other defendants does not disqualify the Committee’s competence, provided the claim against the insurance company is filed correctly and satisfies admissibility requirements. In such cases, any defect related to the inadmissibility of claims against non-insurable parties does not affect the validity of the proceedings against the insurer.
“If a divisible insurance dispute is presented to the Committees and includes other parties in addition to the insurance company—against whom the claims are unrelated to the insurance coverage—the committee’s jurisdiction is not negated, provided the claim against the insurer is properly filed and meets admissibility conditions, even if the claims against the other parties are inadmissible before the committee.”
This reasoning reflects a functional interpretation of Article 4 of Decision No. 33 of 2019, favouring procedural efficiency and substantive justice over strict formalism. In practical terms, the Court endorsed a severability doctrine, allowing the proceedings before the committee to continue insofar as they pertain to the insurer, even if other claims must be addressed elsewhere:
“...this does not affect the committee’s jurisdiction so long as the claim against the insurance company was properly filed and satisfies the requirements for admissibility, even if the claim is inadmissible against those not eligible to be sued before the committee.”
Thus, the Cassation Case (No. 5 of 2022) promotes a pragmatic approach that avoids frustrating valid insurance claims due to the procedural misjoinder of unrelated parties. It also reflects a shift away from the previously held view (e.g., in Cassation Case No. 147/2021) that any joinder automatically strips the committee of jurisdiction. The following excerpt from Cassation Case No. 147/2021 captures that earlier principle:
“if a dispute submitted to the committees includes other parties who are not adversaries to the insurance company, and no claims are made against the insurer, and the claim does not concern the insured risk for which the company provides coverage, then the entire dispute falls within the jurisdiction of the general courts, even if part of it falls within the committees’ jurisdiction.
So long as those additional parties are real adversaries in the dispute and were not added solely to circumvent the committees’ jurisdiction, the dispute lies with the general courts. The real adversary in a lawsuit is the party against whom relief is sought and who contests the claimant’s requests”
The practical implications of this interpretation are significant for both claimants and legal practitioners. By allowing the committee to retain jurisdiction over the insurance component of a divisible dispute, while permitting unrelated claims to proceed separately before the courts, the ruling introduces a dual-track litigation structure.
The interpretation adopted by the Court of Cassation in Case No. 625/2023 introduces a more nuanced understanding of Article 4, permitting insurance disputes to proceed before the Committee even where other non-insurable parties are involved—so long as the claim against the insurer is divisible and properly constituted. While this promotes access to the Committee’s specialized jurisdiction, it also creates procedural and practical challenges, particularly in cases involving multiple defendants.
The most significant implication is the division of proceedings: one claim should proceed before the Committee against the insurer, while separate claims against other liable parties (such as tortfeasors or contractors) must be litigated before the courts. This division of the dispute not only leads to duplication of effort and increased legal costs, but also risks conflicting outcomes—especially where both claims are based on overlapping facts or damages. In addition, given the type of such claims which might involve other defendant such as tortfeasor this can be against the compensation rules prohibiting double recovery, which does not allow claimant to claim compensation twice for the same harm this principle ensures that while the injured party is fully compensated, they are not unjustly enriched by receiving compensation from multiple sources for the same damage.
Further, the execution of judgments becomes legally and logistically complicated. A claimant who secures a favourable decision against the insurer from the Committee may still be required to initiate or await parallel litigation before the courts to resolve claims against the other parties. This creates a disconnect between liability findings and recovery efforts, particularly where contributions or apportionment of damages are contested across forums.
In short, while the judgment supports procedural flexibility and salvages otherwise valid insurance claims, it also introduces uncertainty and division that can hinder the efficient resolution and enforcement of multi-party insurance disputes.
The Court of Cassation’s approach in Case No. 5/2022 Civil reflects a measured judicial effort to uphold access to the Committee, even in cases involving multiple defendants. By affirming the divisibility of claims under Article 4, the judgment allows insured parties to pursue their rights to access the Committee’s specialized forum, provided the claim is properly formulated.
This interpretation promotes procedural accessibility and preserves the exclusive role of the Committee in handling insurance-specific matters. However, it also necessitates careful case management, as claimants and practitioners must now contend with parallel litigation tracks, coordination between forums, and the allocation of liability across different proceedings.
Rather than undermining the adjudicative structure, this development clarifies an important procedural route available under UAE’s Jurisprudence—albeit one that carries practical challenges. Success in such cases will depend on strategic planning, timely filings, and an understanding of how to navigate the interface between specialized and general jurisdiction, without compromising the consistency and enforceability of outcomes.
For further information,please contact Sakher Alaqaileh and Nazly Sadik.
Published in April 2025
