How to defend against a breach of trust case in the UAE

Quick answer (TL;DR)

The most effective defence to a breach of trust charge in the UAE is to challenge one or more of its essential elements: lawful entrustment of money or movable property, unauthorised embezzlement or use, financial harm and criminal intention.

A contractual default, unpaid debt, accounting disagreement or failed business venture does not automatically amount to a criminal breach of trust. The defence should reconstruct the transaction, trace every payment and demonstrate why the dispute is civil or commercial rather than criminal.

What is a breach of trust under UAE law?

Breach of trust is principally governed by Article 453 of Federal Decree-Law No. 31 of 2021 on Crimes and Penalties.

Article 453 applies where a person embezzles, uses or dissipates funds, written instruments or other movable property in a manner that harms the person entitled to that property, after it was delivered under a relationship of trust, lease, mortgage, loan for use or agency.

The provision also treats certain people as agents, including a partner dealing with jointly owned property and a person who receives property for a particular purpose benefiting its owner or another person.

The federal Crimes and Penalties Law is active, and the UAE legislation portal records its latest update as 1 October 2025.

What must the prosecution establish in a UAE breach of trust case?

A sound defence begins by breaking the allegation into its individual legal components. The prosecution must establish a coherent case concerning each of the following issues.

1. The complainant entrusted identifiable property to the accused

The prosecution must identify the specific money, written instrument or movable property allegedly entrusted to the accused.

It must also establish the legal basis on which it was delivered. Article 453 refers to trust, lease, mortgage, loan for use or agency, together with the relationships treated by law as agency.

This requirement is often decisive. Money transferred as an outright payment, sale price, investment contribution, loan creating a debtor-creditor relationship or contractual entitlement may have a different legal character from property delivered temporarily for a restricted purpose.

The defence should therefore ask:

• Who legally owned the property after delivery?
• Was the accused required to return the same property?
• Was the accused merely required to pay a debt?
• Did the contract permit the money to be mixed, invested, transferred or spent?
• Was the arrangement genuinely one of the relationships listed in Article 453?

2. The accused embezzled, used or dissipated the property

Possession alone does not establish breach of trust. The prosecution must connect the accused to an act of embezzlement, unauthorised use or dissipation.

A defence may arise where the property was:

• Used exactly as authorised;
• Transferred following written instructions;
• Paid to suppliers or employees for the agreed project;
• Returned to the complainant;
• Still held and available;
• Lost through an external event rather than deliberate conversion;
• Managed by another authorised person; or
• Recorded incorrectly because of an accounting or administrative mistake.

Banking and accounting records are usually more persuasive than unsupported allegations about what happened to the property.

3. The complainant or another entitled person suffered harm

Article 453 expressly requires the conduct to cause harm to the person entitled to the property.

The defence should test:

• Whether the complainant was legally entitled to the amount claimed;
• Whether the alleged loss has been calculated accurately;
• Whether payments, refunds, credits or offsets were omitted;
• Whether the loss resulted from commercial risk or third-party conduct;
• Whether the complainant has claimed the same amount in multiple proceedings; and
• Whether an expert accounting examination produces a different balance.

An inflated or unverified claim should not be accepted as proof of criminal harm.

4. The necessary criminal intention existed

Under Article 39 of the UAE Crimes and Penalties Law, the moral element of a crime consists of intention or error. Intention exists where the person wills the criminal act or omission and aims to produce, or expects, the prohibited result.

In a breach of trust prosecution, the defence should examine whether the evidence truly shows an intention to deal with the property dishonestly or as though the accused were its owner.

The following circumstances may undermine an allegation of criminal intention:

• Genuine ambiguity in the parties’ agreement;
• Written approval for the disputed payment;
• A reasonable belief that the accused was entitled to the funds;
• A genuine dispute over commission, reimbursement or profit entitlement;
• Transparent accounting entries rather than concealment;
• Continuous communication with the complainant;
• Partial performance or repayment;
• Reliance on professional or managerial instructions; or
• An honest factual mistake.

Article 40 recognises that a reasonable mistake of fact may affect criminal liability where the belief was based on reasonable grounds and a genuine effort to investigate the facts.

What are the strongest defences to a breach of trust charge?

The appropriate strategy depends on the documents and money trail. In practice, the following defences are among the most important.

Defence 1: There was no legally qualifying entrustment

This defence argues that the complainant voluntarily transferred ownership or control under a normal civil or commercial transaction rather than entrusting property for a restricted purpose.

For example, a failure to repay a contractual loan is ordinarily analysed differently from taking money that had to be held for the complainant and used only for a specified purpose.

The defence must establish the transaction’s true legal nature through:

• Contracts and amendments;
• Invoices and purchase orders;
• Shareholder or partnership agreements;
• Loan documentation;
• Company resolutions;
• Correspondence describing the purpose of payment; and
• The parties’ previous course of dealing.

The name given to a document is not always conclusive. Its actual obligations and the parties’ conduct must be examined.

Defence 2: The accused acted within the authority granted

An employee, manager, broker, partner or agent may have been expressly or impliedly authorised to make the disputed payment.

Relevant evidence may include:

• Board or management approvals;
• Delegations of authority;
• Email or WhatsApp instructions;
• Approved budgets;
• Expense policies;
• Previous transactions accepted without objection;
• Access permissions; and
• Testimony from finance or operations personnel.

A complainant should not be permitted to characterise an authorised transaction as criminal merely because the commercial result later became unfavourable.

Defence 3: There was no dishonest conversion or appropriation

A complete transaction-by-transaction fund trace may demonstrate that the accused did not personally benefit and did not divert the property.

The defence should identify:

• The source of each payment;
• The account into which it was received;
• Every onward transfer;
• The person who approved the transfer;
• The ultimate beneficiary;
• The supporting invoice or obligation; and
• Any amount remaining or returned.

Where the case is document-heavy, an independent forensic accountant may be essential.

Defence 4: The allegation is a civil or commercial dispute

Many breach of trust complaints arise from:

• Failed investments;
• Unpaid contractual balances;
• Shareholder disputes;
• Partnership disagreements;
• Commission claims;
• Construction-project losses;
• Employment disputes;
• Agency-account reconciliations; or
• Business relationships that ended badly.

Calling a dispute “breach of trust” does not eliminate the need to establish Article 453.

A civil-dispute defence is strongest where the documents demonstrate contractual performance issues, uncertain balances or competing financial claims but do not demonstrate entrusted possession followed by deliberate misappropriation.

Defence 5: Criminal intention is absent

A poor business decision, inadequate bookkeeping or mistaken payment is not necessarily evidence of intentional criminal conduct.

The defence should present a consistent explanation supported by contemporaneous records. Evidence created before the dispute arose is generally more persuasive than explanations prepared after a complaint was filed.

Particularly useful records include:

• Requests for clarification;
• Internal warnings;
• Efforts to recover money from third parties;
• Reconciliation proposals;
• Audited accounts;
• Evidence that the accused reported the transaction openly; and
• Proof that the accused did not attempt to conceal or destroy records.

Defence 6: The complainant’s calculation is incorrect

In financial cases, the alleged loss may be based on an incomplete ledger or a one-sided accounting report.

The defence should reconcile:

• Opening balances;
• All receipts;
• Approved expenditure;
• Refunds;
• Returns of property;
• Commissions;
• Taxes;
• Project costs;
• Credit notes; and
• Amounts paid directly to the complainant or third parties.

A credible forensic report can change the character of a case by demonstrating that the dispute concerns an unsettled account rather than criminal misappropriation.

Defence 7: The evidence is unreliable or incomplete

The defence should test the authenticity, completeness and context of every important document.

Common evidential issues include:

• Screenshots without the complete conversation;
• Translations that alter the meaning;
• Unsigned agreements;
• Spreadsheets that can be edited;
• Statements based on hearsay;
• Missing bank records;
• Transactions made by multiple account users;
• Incorrect attribution of a phone number or email account; and
• Expert reports based only on documents supplied by the complainant.

Original electronic records, complete chat exports and certified translations should be obtained wherever possible.

Defence 8: A procedural condition has not been satisfied

Procedural objections must be considered early rather than after the case has progressed.

Where the victim is the accused’s spouse, parent, grandparent, child or other qualifying ascendant or descendant, Article 11 of the Criminal Procedures Law treats theft, fraud and breach of trust as complaint-based offences, subject to the conditions stated in that article. In those circumstances, the complaint is generally not admitted more than three months after the victim became aware of the offence and the alleged offender.

This three-month rule should not be presented as a general deadline for every breach of trust complaint. Its application to breach of trust under Article 11 depends on the specified family relationship and statutory conditions.

Breach of trust under Article 453 is included among the misdemeanours eligible for criminal conciliation. The general limitation period for misdemeanours is five years from the occurrence of the offence, although investigation, accusation, trial, conciliation and certain evidence-gathering procedures can interrupt that period.

Can a UAE breach of trust case be settled?

Yes. Criminal conciliation can be one of the most important strategic options in an Article 453 case.

Article 349 of the Criminal Procedures Law expressly includes Article 453 among the offences eligible for criminal conciliation. The Public Prosecution or court may initiate conciliation procedures based on an agreement between the victim and the defendant.

Conciliation may be established at any stage of the proceedings, including after a judgment or criminal order has become final.

A valid conciliation can result in:

• Termination of the criminal action; or
• A stay of execution where judgment has already been issued.

Where conciliation occurs after a final judgment or criminal order, the Public Prosecution may order a stay of execution. Civil rights are not automatically extinguished unless they are waived or addressed in the settlement agreement.

Repayment alone should not be assumed to close the case automatically. Any settlement should be documented through the legally recognised conciliation process and should clearly address the criminal complaint, the civil claim, costs, releases and implementation obligations.

What should you do immediately after learning about a complaint?

Preserve all evidence

Do not delete, alter or replace messages, account records, invoices or electronic files. Preserve complete devices and original records where appropriate.

Create secure copies of:

• Contracts;
• Bank statements;
• Accounting data;
• Emails;
• WhatsApp conversations;
• Recorded approvals;
• Receipts;
• Delivery records; and
• Proof of repayment or return.

Prepare a privileged chronology

Prepare a private timeline for your lawyer showing:

• When the relationship began;
• Why the property was delivered;
• What authority was granted;
• How the property was used;
• When disagreements arose;
• What amounts were returned; and
• What communications followed.

Do not circulate an unreviewed chronology to witnesses or the complainant.

Avoid an improvised statement

An accused person may be asked detailed questions about dates, transactions and documents. An inaccurate answer given from memory can damage an otherwise defensible case.

The Criminal Procedures Law requires an arrested accused to be informed of the charge and the right to remain silent. It also provides that the accused is to be sent to the competent Public Prosecution within 48 hours in the circumstances covered by Article 48, with questioning by the Public Prosecution within the following 24 hours.

Obtain legal advice before providing a detailed factual account.

Do not pressure the complainant or witnesses

Settlement discussions should be conducted professionally, preferably through lawyers. Threatening, pressuring or repeatedly contacting a complainant can create additional legal and evidential problems.

Obtain an independent financial review

Do not rely entirely on the complainant’s figures or the company’s internal report. An independent reconciliation may identify missing credits, authorised costs or third-party responsibility.

Can an accused person be arrested for breach of trust?

The Criminal Procedures Law specifically includes breach of trust among the misdemeanours in which a judicial police officer may order the arrest of an accused who is present at the scene where the statutory circumstances are satisfied.

The actual risk of arrest, detention or release depends on the allegations, available evidence, procedural stage, flight concerns and decisions of the police and Public Prosecution.

A person who becomes aware of an active complaint should not ignore police calls or attempt to leave matters unresolved. A lawyer can assess the complaint status, prepare the evidence and arrange an orderly appearance before the relevant authority.

What is the punishment for breach of trust in the UAE?

Article 453 provides for incarceration or a fine.

Under the general provisions of the Crimes and Penalties Law:

• Incarceration ordinarily ranges from one month to three years unless another provision states otherwise.
• A fine for a misdemeanour may range from AED 1,000 to AED 5 million unless a different statutory amount applies.

The court determines the sentence according to the evidence, circumstances of the offence, harm, conduct of the accused and any legally relevant mitigating or aggravating factors.

The financial amount involved does not by itself determine whether the accused is guilty. However, the amount, repayment position and consequences to the complainant may influence case strategy and sentencing.

Can a foreign national be deported after conviction?

Where a foreign national receives a freedom-restricting sentence for a misdemeanour, the court may order deportation or may impose deportation instead of the freedom-restricting sentence, unless another legal provision applies.

The law contains an exception concerning a foreign national who, at the time of the offence, was the spouse or first-degree relative of a UAE citizen, except in crimes against state security.

Because immigration consequences can be more serious than the immediate sentence, defence submissions should address nationality, family circumstances, residence history, employment, prior record, repayment and proportionality from the earliest appropriate stage.

Documents needed to defend a breach of trust case

A properly prepared defence file should normally include:

1. The complete agreement governing the transaction;
2. All amendments and side agreements;
3. Bank statements for every relevant account;
4. A chronological transaction schedule;
5. General ledger and accounting entries;
6. Payment approvals and authority matrices;
7. Invoices, receipts and delivery confirmations;
8. Complete electronic conversations;
9. Proof of return, repayment or reconciliation;
10. Corporate resolutions and internal policies;
11. Details of all people who controlled the money or property;
12. Evidence supporting the accused’s entitlement or good-faith belief;
13. An independent forensic accounting report where necessary; and
14. Certified Arabic translations required for submission.

Frequently asked questions