March 06, 2024 COURT OF FIRST INSTANCE - ORDERS
Claim No. CFI 073/2022
IN THE DUBAI INTERNATIONAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
LALS HOLDINGS LIMITED
Claimant
and
(1) EMIRATES INSURANCE COMPANY (PSC)
(2) SIACI INSURANCE BROKERS LLC
Defendants
ORDER WITH REASONS OF CHIEF JUSTICE ZAKI AZMI
UPON the Judgment of Justice Sir Peter Gross dated 1 November 2023 (the “Judgment”)
AND UPON the Order with Reasons of Justice Sir Peter Gross dated 10 January 2024 refusing the First Defendant’s Appeal Notice dated 22 November 2023 (the “First Permission Application”)
AND UPON the First Defendant’s renewed Appeal Notice dated 30 January 2024 seeking permission to appeal the Judgment (the “Second Permission Application”)
AND UPON reviewing all relevant material added on to the Court file
AND UPON reviewing the Rules of the DIFC Courts (the “RDC”)
IT IS HEREBY ORDERED THAT:
1. The Second Permission Application is granted.
2. Costs shall be costs in the case.
Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 6 March 2024
At: 10am
SCHEDULE OF REASONS
1. This is an application for renewed permission to appeal (the “Second Permission Application”) against the decision of Justice Sir Peter Gross dated 1 November 2023 (the “Judgment”).
2. Eight preliminary issues were referred to the learned Judge to decide. The Appellant is only seeking permission to appeal against the decision on one of the eight preliminary issues. This is preliminary issue 1.3.1.
3. This preliminary issue is:
“Whether it provides cover limited only to a specific local incident where the police or a statutory authority seal or close up a particular premises, or whether it responds to a national or regional governmental response to a global pandemic”.
4. The Judge held as follows:
“The Loss of Attraction Clause is not limited to a specific local incident where the police or statutory authority seals or close up a particular premises. It is capable of responding to a national or regional governmental response to a global pandemic”.
5. The impugned clause was reproduced by the Judge in his Judgement at paragraph 14. I will quote only the relevant parts of that impugned clause.
“Loss of Attraction
The insurance by this policy extends to include consequential laws as insured by this policy but resulting from interruption or interference with business in consequence of:
…
(d) closure or sealing off of the Insured Location (s) or any right of way by the police or other statutory authority;
…
which
(i) prevents or hinders the use of the Insured Location(s) or access thereto or where the Insured Location(s) form(s) part of a larger, development or shopping centre prevents or hinders the use of the entire complex, development or shopping centre or access thereto;
(ii) causes a reduction in the number of people using the Insured Location(s) or where the Insured Location(s) form(s) part of a larger complex, development or shopping centre causes a reduction in the number of people using the same but excluding loss resulting from cause (e) above.”
6. In his grounds of Judgment from paragraph 75 onwards, the learned Judge had considered a few conflicting authorities in interpreting that clause that I cited earlier on. The authorities were of course cited by the opposite parties which favour their arguments. One was the case of Brushfield Limited v AXA [2021] IEHC 203. In that case it was decided that the clause was not intended to extend to pandemic which had nationwide effects. Against that case was the case of China Taiping Insurance Co Ltd., Arbitration Award, at [18] (described in Corbin & King v Axa [2022] EWHC 409 (Comm); [2023] 1 All ER Comm 429, by Cockerill J, at [179[, as “the Mance Variation”). referred to at paragraph 81 of his grounds. The third authority that the Judge discussed was an Australian Federal Court decision in LCA Marrickville Pty Limited v Swiss Re International SE [2022] FCAFC 17 found at paragraph 84 of his Judgment. These authorities are good for the facts and terms of the agreements relevant those cases. The wording of the impugned clause in the preliminary issue is different. It is particularly so with the words “closure or sealing off...by the police or statutory authority”. But then how strict are those words to be read?
7. I am not ready to hold that the ruling by the learned Judge on this particular preliminary issue is correct. To be fair to the Judge, he has taken great pains to consider all the authorities cited as well as weighed the arguments and arrived at the conclusion he did. He had also earlier in his Judgement considered how insurance policies are to be interpreted. However, reading through it and the arguments put in by the Appellant, the Appellant may also be right.
8. At this stage, all I need to determine is whether there is a real prospect of success at appeal. Real prospect of success has been interpreted in a number of cases. In Tanfern v Cameron-MacDonald (Practice Note) [2001] 1 WLR 1311 CA at [21], which follows Swain v Hillman [2001] 1 AER 91 CA, all that is required is that there must be a realistic, as opposed to fanciful, prospect of success. There is no requirement that success should be probable, or more likely than not.
9. Applying those authorities, I conclude that in this Second Permission Application, there is a real prospect of success at appeal if permission to appeal is granted and with that I allow this Second Permission Application. As to costs, I have to order costs to follow the decision at the appeal. Costs shall be costs in the case.
