Dubai Court of Cassation (General Assembly), Appeal No. 1 of 2024, judgment of 13 March 2024
Under the unified motor insurance policy (Insurance Authority Board Decision No. 25 of 2016), compulsory cover obliges the insurer to pay injured third parties whatever the insured or driver is legally liable for, and policy limits cannot be invoked against them. But the policy excludes accidents to the insured, the driver and the insured's employees injured at work unless extra cover is added by endorsement. Such an endorsement is personal accident insurance, not liability insurance: the insurer pays the agreed sum, no more. The insured, driver or employee, or their heirs, cannot claim beyond the endorsement limit on the ground that the injuries are worth more, or that diya (blood money) paid falls outside the insured sum. The Assembly departed from Appeal No. 86 of 2003.
The heirs of a motorcyclist killed in a traffic accident complained to the Central Bank's insurance dispute committee, claiming AED 500,000 from the insurer of the motorcycle, whose policy covered the driver. The committee rejected the claim because the insurer had already paid the deceased's diya by cheque into the estate file. The heirs challenged the decision before the Court of First Instance, which dismissed the challenge; the Court of Appeal set aside the committee's decision and ordered the insurer to pay AED 200,000 with 5 per cent interest, reasoning that diya and compensation are different and may be combined. The Attorney General appealed in cassation in the interest of the law.
The First Civil Chamber referred the appeal to the General Assembly under Article 20(a)(2) of Dubai Law No. 13 of 2016 to reconsider Appeal No. 86 of 2003, which had held, under Ministerial Decision No. 54 of 1987 on unified motor policies, that compensation agreed under an endorsement covering the insured, his family and the driver is unrelated to the diya the insured must pay.
The Assembly explained that insurance under Articles 1026(1) and 1027 of the Civil Transactions Law may cover persons, property or liability. Under Decision No. 25 of 2016 liability cover is compulsory and protects third-party victims directly by law, subject only to a cap of AED 200,000 per death for the insured's spouse, parents and children. The exclusions clause, however, leaves the insured, the driver and employees injured at work uncovered unless additional cover is obtained. That additional cover insures those persons against bodily injury from a sudden external cause; when the risk occurs the insurer owes exactly the agreed sum. By the majority required under Article 20(b), the Assembly departed from the 2003 principle.
Applying it, the Assembly held that the Court of Appeal erred in awarding AED 200,000 on top of the diya, quashed its judgment and, deciding the appeal itself, upheld the first-instance judgment dismissing the heirs' claim.
Fleet operators, employers and motorists who buy driver or personal accident extensions to motor policies can expect claims under the extension to be limited to the stated sum, with any diya paid by the insurer counting towards it. The ruling does not affect third-party victims, whose compensation under compulsory cover is not limited by the policy.
| Articles 1026(1) and 1027 of Federal Law No. 5 of 1985 (Civil Transactions Law) — text of articles 1026, 1027 Decided under this law; it has been replaced by Civil Transactions Law 2025. |
| Insurance Authority Board Decision No. 25 of 2016 issuing the Unified Motor Insurance Policies (exclusions, chapter four, clause four) |
| Ministerial Decision No. 54 of 1987 on the unification of motor insurance policies (basis of the abandoned principle) |
| Article 20 of Dubai Law No. 13 of 2016 on the Judicial Authority in the Emirate of Dubai (referral to and majority of the General Assembly) |
“مطالبة شركة التأمين المؤمنة على تلك المركبة بتعويض يتجاوز حدود المبلغ المحدد في ملحق وثيقة التأمين”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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