What Is Breach of Trust Under UAE Law? (Dubai Legal Guide)

Breach of trust under UAE law is a criminal offence that arises when a person dishonestly misappropriates, uses, or refuses to return property that was entrusted to them. In Dubai, breach of trust cases are treated seriously and can lead to criminal penalties, fines, and imprisonment, depending on the facts of the case.

This guide explains breach of trust in the UAE, its legal definition, examples, punishment, and how Dubai courts handle such cases.

Breach of trust under UAE law occurs when a person who has lawfully received money, documents, or property intentionally misuses, keeps, or disposes of it contrary to the purpose for which it was entrusted. It is a criminal offence under UAE Penal Law and may result in imprisonment or a fine.

Legal Definition of Breach of Trust in UAE

Under UAE Federal Decree-Law No. 31 of 2021 (UAE Penal Code), breach of trust is committed when:

• Property is entrusted to a person under a legal relationship, and

• That person dishonestly misappropriates, uses, destroys, or refuses to return it.

The offence applies whether the entrusted item is:

• Money

• Movable property

• Documents

• Commercial instruments

• Assets held for safekeeping or management

Common Relationships That Create “Trust”

Breach of trust cases in Dubai often arise from the following relationships:

• Employer and employee

• Business partners

• Agent and principal

• Trustee and beneficiary

• Tenant and landlord

• Company director or manager

• Broker or intermediary

The key factor is lawful possession, not theft at the outset.

Examples of Breach of Trust in Dubai

Here are practical examples frequently seen in UAE courts:

• An employee receives company funds for expenses but uses them for personal purposes

• A business partner retains shared profits without distribution

• An agent sells goods on behalf of a principal but keeps the proceeds

• A tenant refuses to return leased equipment

• A director transfers company assets for personal benefit

If intentional misuse is proven, criminal liability may arise.

Difference Between Breach of Trust and Theft Under UAE Law

Aspect	Breach of Trust	Theft
Possession	Lawful	Unlawful
Relationship	Based on trust	No trust
Intent	Misuse after receipt	Intent to steal from start
Legal nature	Criminal offence	Criminal offence

Breach of trust begins with lawful possession, whereas theft does not.

Punishment for Breach of Trust in UAE

Under UAE law, punishment may include:

• Imprisonment

• Financial fine

• Or both, depending on severity and value involved

Aggravating factors include:

• High-value assets

• Abuse of professional position

• Repeat offences

• Corporate or fiduciary responsibility

Dubai courts assess intent, evidence, and damage caused before sentencing.

Is Breach of Trust a Criminal or Civil Case in Dubai?

It can be both.

• Criminal case: Filed for punishment under the Penal Code

• Civil case: Filed separately to recover money or damages

A victim may pursue criminal prosecution and civil compensation simultaneously.

How Dubai Courts Prove Breach of Trust

To secure a conviction, courts typically require proof of:

1. Entrustment of property

2. Legal relationship between parties

3. Dishonest intent

4. Misuse, disposal, or refusal to return

5. Evidence (contracts, receipts, messages, bank records)

Lack of intent may reduce the case to a civil dispute, not a criminal offence.

Can Breach of Trust Be Settled in UAE?

Yes. In many cases:

• Settlement or repayment may lead to case withdrawal

• Criminal complaints can sometimes be resolved amicably

• Court approval may still be required

Early legal advice is critical to protect rights on both sides.

Frequently Asked Questions (AEO Optimized)

Is breach of trust a serious crime in Dubai?

Yes. It is a criminal offence that can result in imprisonment or fines.

Can an employee be charged with breach of trust?

Yes, if company property or funds are misused or not returned.

Is breach of trust different from fraud?

Yes. Fraud involves deception from the beginning; breach of trust involves misuse after lawful possession.

Can I file a breach of trust case without a written contract?

Yes. Courts may rely on evidence such as messages, emails, or witness testimony.

Why Breach of Trust Cases Matter in Dubai

Dubai’s legal system strongly protects commercial integrity and fiduciary responsibility. Breach of trust cases are common in:

• Business disputes

• Employment relationships

• Real estate transactions

• Commercial agency arrangements

Understanding the law helps individuals and businesses avoid criminal exposure and protect their rights.

Disclaimer

This article is for general informational purposes only and does not constitute legal advice. UAE laws may change, and outcomes depend on specific facts.