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Abu Dhabi court Image Credit: Gulf News

Abu Dhabi: The Federal Supreme Court in Abu Dhabi has cancelled a ruling that ordered an insurance company to pay Dh5 million to a commercial entity for fire-related losses.

The company had two insured warehouses, and had demanded a payout after a fire. The Dh5 million payout was ordered, but the Federal Supreme Court has now overturned the ruling and referred the case back to the Court of Appeals.

Following a fire, the plaintiff company had filed a commercial suit demanding that the insurance company pay Dh10.8 million, with 12 per cent annual interest until full payment.

The Court of First Instance appointed an arson investigator and an accountant to look into the claim, and following the submission of reports, it ordered the insurer to pay Dh5.3 million, at a rate of 59ve per cent annual interest until full payment.

The verdict was however appealed by both the defendant and plaintiff, and the defendant argued in court that the fire damage law had been incorrectly applied. The insurance company’s lawyers argued that the fire had been deliberately set by the plaintiff with the view of claiming a payout, especially as the keys to the warehouse were held by the plaintiff and there had been no signs of a break-in. In addition, the lawyers claimed that the plaintiff had changed their insurance contract three months prior to the incident, and was facing dire financial straits at the time.

During investigations, prosecutors then discovered that the roof-mounted fire protection system had not been working, and had not been maintained in some time.