Investment partnerships fail for ordinary reasons: markets turn, costs overrun, partners fall out. When money is lost, the instinct of the aggrieved party is often to file a criminal complaint for breach of trust or embezzlement. Recent rulings from Dubai’s courts — in matters where Vishal Tinani acted as legal advisor — show that the courts look carefully at what kind of relationship actually existed before treating a loss as a crime.
Three cases, one principle
In September 2025, a Dubai criminal court acquitted two men accused of misappropriating more than Dh10.8 million in a restaurant investment. The funds had been paid under a 2019 memorandum of understanding for a 50% stake. The court found that the money formed part of a commercial deal, not a deposit, lease, agency or similar trust-type arrangement.
In May 2026, a man accused of misappropriating Dh1.6 million was acquitted. The court characterised the payment as an investment rather than custody of funds, noted that profits had earlier been paid out, and found no proof of criminal intent.
In August 2026, the Court of Appeal upheld the acquittal of a businessman in a failed car-parts venture. A court-appointed expert found unreconciled accounts but no evidence of dishonest diversion, and the matter was treated as a civil commercial accounting dispute.
A conviction for breach of trust requires proof of entrustment, dishonest conversion and criminal intent — not simply that money was lost or not returned.
What this means for investors
- Know which bucket you are in. Equity investment, a loan, a deposit and an agency relationship carry very different remedies.
- Write it down. A clear written agreement that records the purpose of funds, reporting duties and return mechanics is your strongest protection.
- Build in fiduciary duties. If you want to keep criminal remedies open, the documents need to create a recognised entrustment — with defined duties and safeguard clauses.
- Keep the civil route in view. An acquittal does not end the matter; complainants can still pursue civil and commercial claims for recovery.
What this means for founders and partners
If you have received investment and the venture has struggled, keep complete accounts, share regular statements and document every distribution. In each of these cases, the paper trail — or the absence of evidence of dishonest diversion — shaped the outcome.
This article is general information, not legal advice. Every matter depends on its facts — contact us for advice on your situation.
