Doubts over insurance payouts if Qatar, Russia lose World Cup

Insurance companies are unlikely to pay up if policy holders were aware of alleged corruption in voting process, experts say

PHOTO: Qatar has already spent billions in preparing for the 2022 World Cup. Credit: Shutterstock

Insurance companies are unlikely to pay out on contracts if the Qatar or Russia FIFA World Cup tournaments are cancelled in cases where policy holders were aware of alleged corruption, it was reported.

But proving alleged bribery in the voting on where the 2018 and 2022 events would be held could prove extremely difficult, a legal expert told

Any entity linked to the World Cup that took out cancellation insurance is highly unlikely to receive a payout if it was proven they knew about alleged wrongdoing, Reuters reported.

Such entities could include governments, hospitality providers, sponsors or organising bodies, it was reported.

Richard Leedham, insurance partner at law firm Mishcon de Reya, said state-owned companies would face difficulties in claiming compensation if insurers thought they were aware of any fraudulent behaviour but kept it quiet, Reuters reported.

But a UAE-based legal expert with extensive experience of construction and contract law told that it was highly unlikely that such matters could be proven in the courts.

Dr Habib Al Mulla, chairman of Baker & McKenzie Habib Al Mulla, said that if the 2018 and 2022 World Cup tournaments were taken away from the host nations, it could lead to one of the most expensive litigations in history.

“I agree that insurance companies won’t pay if fraud is proven. But the point is, how do you prove fraud or corruption?,” he said.

“The problem that FIFA or any other authority will face is that in order to reach a stage where the World Cup will be withdrawn from either of the two states, they will need to prove – beyond any reasonable doubt – that there was fraud,” he added.

“You can only prove that – not based on allegations, but through formal court processes. Realistically, to prove that is almost impossible… Even if they manage to have some sort of evidence, or prima facie case, I think that the two parties will take it to war in the courts.

“By the time it’s decided, it will take years, so it’s not going to be an easy process. If it does happen though, it will be one of the most expensive legal cases in history.”

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