Dubai court acquits two in Dh13.5 million cheque breach of trust case

Dubai: The Dubai Court of Appeal has acquitted a businessman and a lawyer in a Dh13.5 million breach of trust case after finding that witness testimony and authenticated documents supported their account that the disputed cheque had been voluntarily returned as part of a commercial settlement.

The court overturned a lower court ruling that had sentenced both defendants to one year in prison and ordered them to jointly pay a Dh13.5 million fine.

The case involved a Dh13.5 million cheque deposited with a law firm as a guarantee during a commercial dispute. The prosecution accused the lawyer of misappropriating the cheque after it had been entrusted to her firm, while the businessman was accused of agreeing with her to commit the alleged offence.

The appeals court found that the evidence did not establish criminal liability, accepting the defence argument that the dispute arose from a commercial transaction rather than a criminal offence.

Cheque deposited as guarantee

The dispute stemmed from a $6 million fuel and gas transaction between two companies. When a Dh13.5 million balance remained outstanding, the businessman and the other party approached a law firm, where the businessman deposited a Dh13.5 million cheque as security for the debt.

Under the arrangement, the law firm was authorised to take legal action if the outstanding amount was not settled within four months.

When the four month deadline expired without payment, the cheque was presented to the bank but was returned unpaid because of insufficient funds and a signature discrepancy.

The complainant subsequently returned the cheque to the law firm so that a police report could be filed alleging that it had been issued in bad faith.

Settlement changed the course of the dispute

The cheque was later presented to the bank but was returned unpaid due to insufficient funds and a discrepancy in the signature. The complainant then returned the cheque to the law firm so it could file a police report alleging that it had been issued in bad faith.

The parties subsequently reached an amicable settlement and returned to the law firm together. According to evidence presented before the appeals court, the complainant voluntarily handed the original Dh13.5 million cheque back to the businessman in the presence of law firm employees. The businessman signed a receipt confirming that he had received the cheque.

The settlement was later formalised in writing, recording the parties’ agreement to return the cheque and end all related legal proceedings.

The lawyer also formally contacted the police station to request the withdrawal or closure of the earlier cheque complaint.

The defence presented the settlement agreement, official records and authenticated documents to the court, arguing that the evidence clearly showed the commercial dispute had been resolved and that the cheque had been returned voluntarily.

Despite the settlement and the documented handover, the complainant later claimed that the cheque had not been returned and accused the lawyer of breach of trust.

The businessman was also accused of aiding the alleged offence by agreeing with the lawyer to misappropriate the cheque.

A lower court convicted both defendants, sentencing each to one year in prison and ordering them to jointly pay a Dh13.5 million fine.

The defendants appealed, arguing that the prosecution’s case was contradicted by the settlement documents and witness testimony, which showed that the cheque had been voluntarily handed back as part of an agreement to resolve the commercial dispute.

The appeals court accepted the defence evidence and overturned the convictions, acquitting both defendants.

The court stressed that criminal liability cannot be inferred from a disputed commercial transaction alone and must instead be established through clear and convincing evidence. It also reaffirmed the principle that an accused is presumed innocent unless guilt is proved to the required legal standard.

The judges found that witness testimony, together with authenticated and government-attested documents, supported the defence account that the complainant had voluntarily handed the cheque back as part of the settlement.

The evidence, the court concluded, failed to establish the alleged criminal offence, leading to the full acquittal of both defendants.

Lawyer and legal adviser Abdullah Bin Hatem, who represented the defendants and secured their acquittal on appeal, said the ruling reaffirmed the principle that criminal liability must be established through clear and convincing evidence.

He said documented settlements and objective records can play a crucial role in resolving complex commercial disputes and in distinguishing contractual disagreements from criminal offences.

The ruling ultimately drew a clear line between a commercial dispute and criminal conduct, finding that the evidence presented did not establish criminal liability beyond the required legal threshold.