When the Fire Is Proven but the Loss Is Not: Dubai Court of Cassation on Expert Evidence and Compensation Claims

By Dr. Abdultaiyab Bahrainwala, Head of Corporate.

A fire occurs. It spreads from one commercial premises to another. Stock is damaged. The affected business seeks compensation.

At first glance, the legal claim may appear straightforward: there was a fire, the claimant’s goods were affected, and financial loss followed.

But what happens when the business cannot reliably prove how much stock it actually held on the date of the fire or what that stock was worth?

That was the central difficulty considered by the Dubai Court of Cassation in Civil Appeal No. 1202 of 2026, decided on 13 August 2026. The decision provides an important lesson for businesses pursuing property-damage and inventory-loss claims: proving the incident is not the same as proving the loss.

The judgment is also significant for litigation practitioners because it reinforces the considerable discretion given to trial courts when assessing expert evidence and explains why a cassation appeal cannot simply become a second attempt to argue the facts.

A Fire, Damaged Stock and a Compensation Claim

The dispute arose after a fire broke out in a garage operated by the first respondent and spread to inventory belonging to the appellant company.

The company brought proceedings seeking compensation for the material and moral damage it claimed to have suffered as a consequence of the fire.

The claim was rejected at first instance, and that result was upheld on appeal. The case then reached the Dubai Court of Cassation.

The interesting point is that the Court’s decision did not ultimately turn on whether the fire happened. The real problem was much more practical: could the company prove, through reliable accounting evidence, what inventory it actually had when the fire occurred?

The answer reached by the expert — and accepted by the lower courts — was that the records did not permit that conclusion to be established reliably.

The Accounting Records Became the Decisive Issue

An appointed expert examined the company’s financial and accounting documentation. What the expert found proved fatal to the compensation claim.

The judgment records that the accounting documents submitted by the company did not correspond with each other. The inconsistency affected documents submitted before the Court, documents provided to the expert from the beginning of the assignment through the date of inspection, and documents subsequently provided after the inspection.

Because the records did not reconcile, the expert was unable to verify the company’s actual inventory balance at the time of the fire. The company had also failed to provide accounting documentation sufficiently supporting the remainder of its claims.

This transformed the dispute. The question was no longer simply whether stock had been exposed to the fire. It became whether the claimant could prove the quantity and financial value of the stock actually present when the incident occurred.

The Critical Difference Between Proving Damage and Proving Quantum

This distinction is easy to overlook in commercial damages claims.

Suppose CCTV footage, a police report and a technical report conclusively establish that a warehouse caught fire. Those documents may prove the event.

They do not necessarily prove that AED 2 million, AED 5 million or AED 10 million worth of stock was inside the warehouse. That requires separate evidence.

For a commercial inventory claim, the claimant may need a coherent documentary trail consisting of purchase invoices, inventory ledgers, sales records, stock movement records, audited accounts, warehouse records and other contemporaneous evidence capable of establishing what goods were actually present immediately before the loss.

In this case, the difficulty was not merely an absence of documents. The more serious problem was that the accounting documents did not match sufficiently for the expert to verify the actual stock balance.

That is an important distinction. A large volume of documents does not necessarily amount to strong evidence. In a financial claim, consistency can matter as much as quantity.

The Company Said: There Was Still Stock

The appellant did not accept the expert’s conclusions.

It argued that differences between the accounting figures should not have resulted in the complete rejection of its compensation claim.

Among other things, the company contended that the expert should have accepted documentation relating to goods of lower value and smaller volume, particularly where those documents had allegedly not been disputed by the opposing party. It also argued that it maintained two warehouses containing goods, even if the quantity was limited.

The appellant went further, referring to other tangible components of its business and its commercial reputation or goodwill. It also maintained that electronic documents had been submitted to the Court and that it was prepared to provide further details concerning those documents.

From a commercial perspective, the argument is understandable: even if the precise inventory figure was disputed, the company maintained that some compensable loss plainly existed.

But that argument encountered a procedural obstacle. The trial court had already considered the evidence and accepted the appointed expert’s conclusions.

How Much Weight Can a Court Give an Expert Report?

This brought the Dubai Court of Cassation to one of the principal legal issues in the case: the discretion of the trial court when dealing with expert evidence.

The Court reaffirmed that the trial court has authority to ascertain and understand the facts of the case and to evaluate the evidence, documents and expert report. Where the case file contains sufficient material for the court to form its judicial conviction, the assessment of that material falls within the trial court’s discretion.

This is particularly important in UAE litigation because court-appointed experts frequently play a substantial role in disputes involving accounting, construction, real estate, banking and technical questions.

The expert does not replace the judge. The court remains responsible for deciding the dispute. However, once the court finds an expert report convincing and supported by the evidence, it may adopt that report and rely upon it in reaching its judgment.

The unsuccessful party cannot necessarily overturn the result merely by demonstrating that another interpretation of the evidence was possible.

“Send It Back to the Expert” Is Not an Automatic Remedy

The appellant also wanted the expert assignment reopened. It complained that it had submitted observations on the expert report and that there were documents which the appointed expert had allegedly refused to examine. It further argued that the lower court had failed adequately to investigate those materials.

The Court of Cassation rejected the proposition that the lower court was required to return the matter to the expert.

The principle confirmed by the Court is important: a trial court is not obliged to order a supplementary expert report or return the assignment to the expert simply because one of the parties requests it.

If the court considers the existing evidence sufficient and gives sustainable reasons for accepting the expert’s conclusions, it may decide the case without reopening the expert process.

That has practical consequences for litigation strategy. A party should not assume that weaknesses in its evidentiary case can always be repaired after an unfavourable expert report. The strongest opportunity to establish the claim is generally during the original expert process itself.

The Case Then Became About Something Bigger Than a Fire

By the time the matter reached the Court of Cassation, the case raised a broader procedural question: when does criticism of an expert report amount to a genuine cassation ground, and when is it simply disagreement with the facts?

The Court found that much of the appellant’s challenge fell into the second category. The appellant was effectively asking for a different assessment of the accounting documents, inventory evidence and expert findings.

But the Court of Cassation is not ordinarily a court that retries the factual dispute.

The Court concluded that the appellant’s arguments revolved around matters falling within the trial court’s discretionary assessment of the evidence and therefore amounted to factual argument that could not properly be raised before the Court of Cassation.

That is one of the most important aspects of the decision. Cassation is not simply “another appeal.”

Why Saying “The Court Ignored Our Documents” Was Not Enough

The appellant also argued that certain documents had not been properly considered.

That argument might appear significant. If genuinely decisive evidence was overlooked, it could potentially affect the fairness or legal correctness of a judgment.

But there was a problem with how the ground had been formulated. The Court of Cassation noted that the appellant had not specifically identified the documents allegedly ignored. Instead, the complaint was presented in broad and general terms.

The Court reiterated that a cassation ground must disclose its meaning sufficiently clearly to remove uncertainty. It must identify the alleged defect in the judgment, where that defect occurred and how it affected the result.

The appellant’s general assertion that documents had been overlooked did not meet that standard. The Court described the ground as insufficiently particularised and therefore inadmissible.

This is a valuable drafting lesson. There is a considerable difference between saying “the Court failed to consider important documents” and establishing precisely which document, what it proved, where it appeared in the record, how the judgment failed to address it, and why consideration of that evidence could have changed the result.

The first is an allegation. The second may amount to a properly articulated legal ground.

Cassation Is About Legal Error, Not a Better Version of the Facts

The judgment therefore draws a clear line between two types of complaint.

A party may legitimately challenge a judgment for an error falling within the statutory grounds for cassation. But a party cannot ordinarily use cassation to ask the Court to reassess the same evidence and simply reach a different factual conclusion.

Here, the lower court had accepted the expert’s finding that the accounting records were inconsistent and that the actual inventory at the date of the fire could not reliably be verified.

The Court of Cassation considered that conclusion to be based on sustainable reasons grounded in the record.

Once that was established, the appellant’s attempt to persuade the Cassation Court that certain goods, warehouses, electronic documents or other assets should nevertheless have produced a different result largely became a dispute over evidentiary assessment. That was not sufficient.

The Civil Procedure Law and the Result

The Court expressly relied upon Federal Decree-Law No. 42 of 2022 promulgating the UAE Civil Procedure Law.

It concluded that the appeal had not been brought on the grounds contemplated by Article 175(1) and (2) of the legislation. Accordingly, pursuant to Article 185(1), the Court ordered that the appeal be not admitted.

The appellant was ordered to bear the costs of the proceedings and AED 1,000 in advocates’ fees, and the security deposit was forfeited. The rejection of the compensation claim therefore remained undisturbed.

The AED 10 Million Warehouse With an AED 1 Million Paper Trail Problem

The broader commercial lesson can be illustrated simply.

Imagine a company says that AED 10 million worth of goods were destroyed in a warehouse fire. The warehouse is visibly destroyed. Nobody seriously disputes that the fire occurred.

But the company’s inventory ledger shows one figure, its purchase records indicate another, its financial statements suggest something different, and documents produced after the incident cannot be reconciled with the records existing beforehand.

The company’s real litigation problem may no longer be proving the fire. It is proving the AED 10 million.

That is essentially why this judgment matters beyond its particular facts. A compensation claim is ultimately an evidentiary exercise. The larger the claim, the more important the underlying documentary architecture becomes.

What Businesses Should Have Ready Before a Loss Occurs

The decision carries a practical warning for companies holding significant physical inventory.

Businesses should maintain records capable of reconstructing their inventory position at any particular date. Depending on the business, that may include inventory ledgers, purchase invoices, delivery records, warehouse receipts, sales invoices, stock-transfer records, audited financial statements and periodic physical stock counts.

These records become particularly important after an unexpected event such as fire, flooding, theft or warehouse damage.

Trying to reconstruct the stock position only after the incident can create evidentiary difficulties — especially where different sources produce inconsistent figures.

The case demonstrates that the court-appointed expert may ask a deceptively simple question: “How much stock was actually there on the date of the incident?”

If the company’s own records cannot produce a reliable answer, the compensation claim can become difficult regardless of how obvious the physical damage appears.

Three Principles That Make This Decision Worth Remembering

The judgment can ultimately be reduced to three practical propositions.

First, an incident and a loss are not the same thing. Proving that a fire occurred does not prove the monetary value of the stock destroyed.

Second, an expert report can become decisive where the claimant’s own financial records are inconsistent. If the trial court accepts that report for sustainable reasons, the Court of Cassation will not ordinarily reopen the factual assessment simply because the claimant disagrees.

Third, cassation grounds require precision. A party alleging that evidence was ignored must identify the evidence and explain the defect and its effect. General complaints are vulnerable to being treated as vague and inadmissible.

Conclusion

The Dubai Court of Cassation’s decision of 13 August 2026 in Civil Appeal No. 1202 of 2026 began with a fire but ultimately became a case about something much broader: how commercial loss must be proved and where factual litigation ends and cassation review begins.

The claimant maintained that its stock had been affected by a fire originating from another premises. Yet the appointed expert could not reliably establish the actual inventory balance because the accounting records presented at different stages did not correspond. The trial court accepted that expert assessment, and the Court of Cassation found no proper basis to interfere with it.

The decision leaves businesses with a simple but important lesson: after a fire, photographs may prove what was destroyed. Accounting records must prove what it was worth.

Related reading from KH Legal: on how Dubai Courts is now structuring technical expertise into the judicial process itself, see Dubai’s new expert-assisted judicial circuits under Decision No. 9 of 2026 · our litigation practice · insurance and reinsurance disputes · commercial litigation · contact us for an assessment of a compensation claim.