Dubai battery firm to pay insurers Dh299,000 for warehouse fire

Dubai: A battery company in Dubai has been ordered to pay Dh299,000 in compensation to an insurance firm, after finding it liable for a fire that broke out at its warehouse due to unsafe storage practices.

In a judgment delivered in open court, the Dubai Civil Court ruled that the battery company must pay the amount, along with legal interest at a rate of 5 per cent per year from the date the ruling becomes final until full settlement, in addition to court costs.

According to Al Khaleej newspaper, the case stemmed from a comprehensive property insurance policy issued by the claimant, an insurance company, in favour of one of its clients. 

The policy covered goods stored in a warehouse operated by the defendant battery company. 

During the policy period, a fire erupted at the warehouse, continuing into the following day and resulting in the complete destruction of the insured goods.

Investigations conducted by the competent authorities included a report from Dubai Police, incorporating the findings of a fire expert. 

The report concluded that the blaze was caused by batteries stored alongside highly flammable materials and exposed to direct sunlight in the warehouse yard. 

This exposure triggered a sustained thermal reaction, leading to a rise in internal conductor temperatures and eventual ignition. The report confirmed that the goods were under the custody of the battery company at the time of the incident.

Following the fire, the insurance company appointed a specialised technical firm to assess the damage. The total loss was calculated at Dh270,926, in addition to the cost of the damage assessment. 

The insurer paid the full compensation amount to the insured party, obtained a discharge and subrogation acknowledgment, and subsequently filed a recourse claim against the party responsible for the damage.

During proceedings, the battery company challenged the court’s jurisdiction and argued that the case should be dismissed for lack of standing, while also disputing its liability. 

The court rejected these arguments, affirming the insurer’s legal right to seek recovery under the provisions of the UAE Civil Transactions Law.

Relying on police reports and expert findings, which it found to be sound and well-founded, the court determined that the battery company had been negligent in its storage practices. It held the company fully liable for the losses incurred, ruling that unsafe custody of goods gives rise to a legal obligation to compensate for resulting damage.