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Breach of Trust in the UAE

Knowingly misappropriating movable property belonging to another is a punishable criminal offence according to Article 404 of the UAE Federal Penal Code No. 3 of 1987. The elements of this crime, its consequential penalties, and your rights as the victim will be examined in this article.

The Elements of Breach of Trust
UAE Federal Penal Code No. 3 of 1987 defines and codifies fraud and breach of trust. Whilst fraud is a conduct crime, i.e., the conduct of the perpetrator is, in itself, incriminating without proof of damage suffered by the victim, contrastingly, breach of trust, is a result crime, wherein the victim must suffer damages in the form of movable property misappropriated by the perpetrator.
The elements of the crime are stipulated in Article 404, wherein it is stated that, “Shall be subject to a jail sentence or to a fine, whoever embezzles, uses or dilapidates amounts, bills or any other movable property to the prejudice of those entitled whenever the said movable property are delivered to him on bases of deposit, lease, pledge, loan for consumption or proxy.” This Article elucidates that there exists a contract by virtue of trust between the offender and the victim, i.e., by means of deposit, lease, pledge, loan, or proxy – the breach of which is a criminal offence.
Additionally, Article 404 also states, “In the application of this provision shall be considered as a proxy, the partner in a joint property, the officious on the property of the interested owner and whoever received something to be used in a specific matter for the benefit of its owner or of others.” This is commonly seen in cases where employees may misuse the powers granted to them by their employers to wrongfully and knowingly embezzle money or misappropriate other forms of movable property.
As evident from the elements of the crime, as defined in Article 404, it is evident that Breach of Trust is an increasingly common crime, both in the business world and in ordinary aspects of life where a contract of trust exists. In a business partnership, such a breach may commonly occur where one partner may knowingly and willingly act in a way which leaves the other partner in a detrimental position – such as embezzling company funds. Ordinarily, such a breach may also be committed by employees or independent contractors against their employers.

The Penalty for Breach of Trust
As per Article 29 of Federal Penal Code No. 3 of 1987, breach of trust is a misdemeanor. Article 404 stipulates that the offender “shall be subject to a jail sentence or to a fine”. Courts have the discretion to apply either of the two, as per Article 99 (b) which states, “if the misdemeanor is punishable by detention and fine together, the court shall apply either one of the two penalties”. Furthermore, Article 71 of the same penal code states that the maximum fine for such an offense is AED 30,000, and maximum sentence not exceeding three years. The application of these penalties is left to the discretion of the Courts, and presumably, larger fines or maximum sentences are more likely applied if the breach of trust is more severe in nature, and if a larger sum of property has been misappropriated in order to set a stringent precedent against the committance of crimes.

What can you do as the victim?
Generally, in criminal proceedings, the prosecution and action against the perpetrator is initiated by Public Prosecution, as per Article 7 of Federal Law No. 35 of 1992. Article 10 of the same law stipulates that in certain cases, a written or verbal complaint from the victim or their legal representative is necessary for filing a criminal action. It further stipulates that if the victim in a breach of trust case is a spouse of the perpetrator or one of the perpetrator’s ascendants or descendants, and if the proceeds are not seized judicially or administratively or encumbered by a lien in favor of another person, then there is a time-bar of three months to file a complaint from when the victim was aware of the committance of the crime. If the victim is not a spouse or ascendent or descendant of the perpetrator, then no such time-bar of three months applies.

Written by Huda Iqbal

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