The Dubai Court of Appeal has upheld the acquittal of a businessman accused of criminal breach of trust, ruling that a failed business partnership and unresolved financial accounts do not automatically amount to a criminal offence.
The case stemmed from a joint investment in a used-car spare-parts business. After the relationship between the two partners broke down, one investor accused the other of unlawfully retaining money that had allegedly been entrusted to him under a power of attorney. The complaint led to criminal proceedings on allegations of breach of trust.
During the appeal, the court examined witness testimony, contractual agreements, company documents and an independent expert report to determine whether there was evidence of criminal wrongdoing.
The findings showed a business partnership with shared investments, management responsibilities and financial dealings rather than a straightforward case of theft or fraud. According to the court-appointed expert, the available financial records did not indicate any dishonest misappropriation or unlawful conversion of funds.
Instead, the expert found that the partners’ finances had become closely intertwined over the course of the business. Contributions, withdrawals, expenses, profits and mutual obligations had accumulated without a final reconciliation of accounts to establish the financial position of either party.
The report noted that, without a complete accounting exercise, it was impossible to determine whether the disputed funds represented personal misuse, unpaid business entitlements, unresolved expenses or ordinary profit-sharing between the partners.
The court ruled that prosecutors had failed to establish the legal elements required to prove criminal breach of trust. Under UAE law, such an offence requires clear evidence that property was entrusted to an individual under a recognised legal arrangement and was intentionally and dishonestly converted for personal use.
Judges concluded that the dispute was commercial in nature and should be resolved through civil proceedings, where financial records can be fully reviewed and outstanding claims assessed.
Legal adviser Vishal Tinani, who represented the acquitted businessman, said the judgment highlights the distinction between commercial disagreements and criminal conduct.
“The evidence must show the property was specifically entrusted to the accused under a recognised arrangement, that it was dishonestly misused, and that criminal intent existed at the time,” Tinani said.
He added that where business partners share investments, profits and management responsibilities, allegations of fraud cannot be presumed simply because a venture fails or financial accounts remain unsettled.
The decision serves as a reminder for entrepreneurs and investors that failed partnerships and accounting disputes should generally be addressed through the civil courts rather than the criminal justice system. The ruling also reinforces the principle that criminal proceedings cannot be used as an alternative to resolving unresolved commercial and financial disagreements.
