A Dubai criminal court has acquitted a man accused of misappropriating Dh1.6 million in an investment-related dispute, reinforcing the principle that failed business deals do not automatically amount to criminal offences, reported Khaleej Times.
According to court records cited by the publication, the complainant had transferred money to the accused as part of a business investment arrangement linked to a company whose operator later reportedly left the country.
The investment reportedly promised monthly returns, and while some profits were initially paid, a significant amount remained unpaid after the business stopped operating.
Prosecutors accused the defendant of breach of trust and misappropriation, arguing that the funds had been entrusted for a specific purpose and were unlawfully retained.
However, the court ruled that the prosecution failed to provide sufficient evidence to prove criminal intent or dishonest appropriation of funds.
In its judgment, the court said the money was provided as part of an investment arrangement rather than a custodial trust, where funds are temporarily held on behalf of another party. The court also noted that profits had previously been paid, indicating that the parties were involved in an active commercial relationship.
The court further stated that the evidence did not establish fraud, deliberate misuse of funds or intentional conversion of money for personal gain. It concluded that the dispute was, at most, a failed or disputed investment that could give rise to civil or commercial liability rather than criminal liability.
The judgment stressed that criminal guilt must be established with certainty and cannot be based on suspicion or incomplete evidence.
Legal experts said the ruling is significant for investors, business partners and expatriates involved in informal investment arrangements in the UAE.
Commenting on the case, Vishal Tinani, legal advisor on the matter, said the decision makes clear that criminal courts should not be used as a tool for commercial recovery.
“For conviction in breach of trust or misappropriation cases, there must be proof of entrustment, dishonest conversion, and criminal intent beyond a reasonable doubt,” he told the publication.
He added that where funds are invested voluntarily and profits are shared, disputes are generally treated as civil matters linked to investment risks rather than criminal appropriation.
Tinani also advised investors and businesses to formalise transactions through written agreements and proper documentation, including banking records and clearly defined risk structures.
The case highlighted several common issues in private investment arrangements, including the absence of written agreements, informal promises of fixed monthly returns, poor documentation of transactions and reliance on personal trust instead of regulated financial structures.
The defendant was acquitted due to insufficient evidence of criminal wrongdoing. However, the complainant still has the option to pursue civil remedies through the courts.
Legal experts said the ruling reinforces a growing trend in UAE courts to distinguish genuine criminal fraud from failed commercial transactions, particularly in informal investment arrangements lacking proper contracts and documentation.