Insurance Company's Claim for Compensation Dismissed by Ras Al Khaimah Court

RAS AL KHAIMAH: The Ras Al Khaimah Court of First Instance has dismissed a lawsuit filed by an insurance company against a company and its owner, seeking the return of compensation paid following a vehicle accident. The Court of Appeal upheld the lower court's decision.

The accident occurred in Ras Al Khaimah on August 30, 2021, and resulted in the death of the vehicle's driver and a passenger. The vehicle belonged to a Fujairah-registered company. As per a court order, the insurance company paid approximately 3.87 lakh dirhams (around 92,000 Indian Rupees) in compensation to the families of the deceased.

The insurance company subsequently filed a lawsuit to reclaim this amount, arguing that the driver was not an employee of the company and that this constituted a violation of the insurance policy's terms and conditions.

However, the Ras Al Khaimah Court of First Instance rejected the insurance company's arguments. The court ruled that the payment of the insurance amount was in accordance with the policy's terms. The court also observed that the fact that the driver was not an employee of the company did not fall under the circumstances that would allow the insurance company to demand the return of the compensation. The court dismissed the case and ordered the insurance company to bear all court costs. The insurance company appealed this decision, but the Court of Appeal upheld the primary court's verdict.

The favorable verdict for the company owner was largely due to the intervention of members of Yab Legal Services. A key factor in securing the win was the successful demonstration to the court of two legal points: that a case on the same matter cannot be filed against another person after a final verdict has been rendered, and that the deceased driver was an employee of another establishment owned by the vehicle owner.

Salam Pappinisseri, CEO of Yab Legal Services, reminded employers that when insuring a vehicle, the employees should either be on a visa sponsored by the same company or the insurance policy should include a group of companies.