Insurer Loses Bid to Recover $340M Payout for Dubai Hotel Fire

An insurance company that was ordered to pay more than a billion Dirhams in damages for a 2015 New Year’s Eve fire in Dubai has lost a civil lawsuit that it filed to try and recover the money.

Two years after the massive fire rocked the Address Downtown hotel, Orient Insurance was ordered to pay Dubai’s state-backed developer Emaar 1.25 billion Dirhams (more than $340 million) in a settlement. Emaar is behind projects like the world’s tallest skyscraper, the Burj Khalifa.

Orient then filed a civil lawsuit in 2018 against the contractors who worked on the design, construction and maintenance of the hotel. It said they failed to implement fire safety requirements, contributing to the spread of the blaze.

Orient Insurance asked the contractors to pay back the insurance claim it paid to Emaar. The case involved leading contractors including Belhasa JV, Arabtec, Mirage, and ALEC Engineering and Construction.

Court papers show that a seven-member expert committee concluded that the fire was caused by an electrical short-circuit on a spotlight. It also stated that there was no conclusive evidence to show there were technical errors or violations by the defendants, and that the building cladding might have contributed to the spread of the fire but was not the cause of it.

“The report confirmed our client’s position that it had properly constructed the work that it was mandated to construct,” said Mohamed ElGhatit, a lawyer representing government-owned ALEC Engineering and Construction.

Dramatic fires have hit skyscrapers in Dubai and other cities in the United Arab Emirates in recent years. Building and safety experts have cited a popular type of cladding covering the buildings that can be highly flammable. Authorities say they’ve changed fire safety rules in the emirate to address the danger.

The court’s ruling against Orient came last week.