Insurance company fails to reclaim Dh1.24bn payout after Dubai’s Address hotel fire

Orient Insurance paid Emaar after the fire in 2015 but has since said contractors were at fault

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An insurance company that paid out Dh1.24 billion ($380 million) to Emaar Properties for losses resulting from the fire at the Address Downtown hotel has lost the civil case it filed to recover the money.

The blaze broke out on New Year’s Eve in 2015 and was reported around the world.

Two years after the fire in the 63-storey hotel, Orient Insurance — part of UAE’s Al Futtaim Group — paid Emaar more than a billion dirhams as part of a settlement for the accident.

However, after making the payment, Orient lodged a civil case at Dubai Courts requesting that contractors who worked on the design, construction, and maintenance of the hotel pay back the insurance claim it had paid to Emaar.

It accused them of being liable for the incident and contributing to the spread of the blaze by failing to implement fire safety requirements.

The insurance company asked for the Dh1.24 billion to be repaid to them, plus 9 per cent interest from the date the case was lodged on November 30, 2016.

A ruling in favour of the contractors was upheld by the Dubai Court of Appeal on Wednesday last week.

The case involved leading contractors including Belhasa JV, Arabtec, Atkins, ALEC Engineering and Construction, Mirage and GAJ.

“Our client’s position was properly articulated from day one, and three years later, the honourable Dubai Courts confirmed it as right,” said Sherif Hikal, founding partner at OGH Legal, acting on behalf of ALEC Engineering and Construction.

“It was a very complex case with very complicated technical issues.”

The judgment cited reports by a seven-member expert committee that concluded the fire was caused by an electrical short-circuit housed within a spotlight.

The committee was appointed by the court after reports from a previous committee were excluded because experts failed to present reports based on technical and realistic grounds.

“The technical findings of the seven-member committee concluded that there were no errors in the manner in which the building was constructed,” said Mohamed ElGhatit from OGH Legal.

Mr ElGhatit said complex cases similar to this one used to be referred to other platforms such as foreign courts or arbitration.

“But recently such cases are being considered and determined by UAE courts, which reflects a confidence in the country’s legal system,” he said.

Last week’s ruling remains subject to appeal within 60 days.

No comment was immediately available from Orient Insurance or its legal representatives.

Updated: September 20, 2022, 12:16 PM