Civil Law and UAE Fraud in Financial Transactions and Restitution Claims

1. Introduction

Fraud in financial transactions in the UAE can give rise to several overlapping civil causes of action. Depending on the facts, a claimant may rely on:

• tortious liability for causing harm;
• fraud/deception;
• contractual liability;
• unjust enrichment;
• restitution of property or money;
• avoidance or unwinding of fraudulent transactions;
• sham-transaction principles;
• tracing and recovery of transferred assets; and
• in appropriate cases, the civil consequences of a criminal fraud or embezzlement conviction.

The principal UAE Civil Code provisions historically relevant to these claims include Articles 282–285 on civil liability and deception and Articles 318–319 on unjust enrichment/restitution. Recent UAE litigation also demonstrates the importance of Articles 391, 394 and 395 where a debtor attempts to move assets beyond the reach of creditors.

The exact remedy depends upon whether the claimant is seeking compensation for harm, return of property, or reversal of a transaction. These are related but legally distinct remedies.

2. Meaning of Fraud in Financial Transactions

Financial fraud may involve deliberately inducing another person to transfer money, securities, property or other economic value through deception.

Examples include:

• fraudulent bank transfers;
• forged payment instructions;
• identity fraud;
• unauthorized withdrawals;
• fraudulent investment arrangements;
• concealment of material financial information;
• sham transfers of assets;
• misappropriation of company funds;
• fraudulent securities transactions;
• obtaining money through false representations;
• transferring assets to relatives to defeat creditors; and
• inducing a person to make a payment without intending to perform the promised obligation.

Under Article 285 of the UAE Civil Code, a person who deceives another is liable to make good the harm resulting from that deception. Article 282 establishes the broader principle that a person causing harm to another is liable to make good that harm.

3. Fraud, Damages and Restitution Are Not the Same

This distinction is fundamental.

Fraud damages

The claimant says:

"Your fraudulent conduct caused me financial harm, so compensate me."

The primary remedy is compensation.

Restitution

The claimant says:

"You received my money or property without lawful justification, so return it."

The primary remedy is restoration of the property or its value.

Avoidance/unwinding

The claimant says:

"The transaction was structured or performed to defeat my legal rights, so the transaction should be set aside or unwound."

This may become particularly important in creditor-fraud cases.

Criminal proceedings

The same conduct may also constitute a criminal offence. However, the criminal case and civil claim have different functions. The criminal process addresses criminal liability, while the civil proceedings may determine compensation, restitution and recovery of property.

4. Article 282 — General Civil Liability

Article 282 establishes the fundamental UAE tort principle:

harm caused to another gives rise to liability to make good that harm.

Therefore, a financial fraud claimant generally needs to establish the relevant elements of liability, including:

1. wrongful conduct;
2. damage; and
3. causal connection between the conduct and damage.

Where the conduct is fraudulent, Article 285 provides a more specific basis concerning deception.

5. Article 285 — Liability for Deception

Article 285 is particularly important in financial-fraud disputes.

The provision essentially establishes liability where:

• one person deceives another; and
• harm results from that deception.

Thus, a claimant may need to prove not merely that money disappeared, but that the defendant's deceptive conduct caused the financial loss.

For example:

False representation → victim relies upon it → money transferred → defendant obtains benefit → victim suffers loss.

The fraudulent representation can potentially support a civil claim even where the claimant also has contractual remedies.

6. Unjust Enrichment and Article 318

Article 318 is central to restitutionary claims.

The basic principle is that a person's property should not pass to another without:

• agreement between the parties; or
• legal authority.

Where property has moved without a lawful basis, restitution may be required.

The Dubai Court of Cassation's Case No. 216/2009 is a particularly important authority. The Court explained that the claimant must establish that its property was transferred to another person and that the transfer occurred without lawful cause. It also emphasized that unjust enrichment generally does not replace the contractual framework where a contract governs the parties' relationship.

7. Article 319 — Returning Property

Article 319 complements Article 318.

Where a person acquires another person's property without a legally valid disposition entitling that person to it, the property may have to be returned.

Depending on the circumstances, restitution may therefore involve:

• return of the original asset;
• return of equivalent property; or
• payment of its value where the original property cannot be returned.

This makes Articles 318–319 particularly important in cases involving:

• mistaken payments;
• unauthorized transfers;
• money received without contractual basis;
• property transferred through invalid arrangements; and
• financial benefits obtained through fraud.

8. Case Law

Case 1 — Dubai Court of Cassation, Case No. 216/2009

Principle: Unjust enrichment requires absence of lawful cause

This is one of the most important UAE authorities concerning restitution.

The Dubai Court of Cassation explained that where property is transferred without agreement or legal authority, the owner can seek its return. The claimant bears the burden of establishing:

1. that its property was transferred to another person; and
2. that the transfer occurred without lawful cause.

The Court also distinguished unjust enrichment from contractual claims: where a contract governs the parties' relationship, the contractual framework generally supplies the legal basis for the transfer.

Significance

In a financial-fraud case, this means that a claimant should identify precisely why the recipient had no lawful entitlement to the money.

9. Case 2 — Dubai Court of Cassation, Case No. 234/2009

Principle: Contractual cause and unjust enrichment

This authority is discussed in subsequent UAE jurisprudence concerning Articles 318 and 319.

Its importance lies in the distinction between:

contractual obligation

and

unjust enrichment.

Where an enforceable contract provides the legal basis for a payment, a party normally cannot simply ignore the contract and characterize the same payment as unjust enrichment.

Financial-fraud significance

Suppose A pays B AED 1 million under a valid loan agreement.

B's failure to repay may ordinarily produce a contractual/debt claim, rather than automatically creating an unjust-enrichment claim.

By contrast, if B obtains AED 1 million through a fraudulent transfer for which no valid legal basis exists, restitution may be available.

10. Case 3 — Larmag Holding B.V. v First Abu Dhabi Bank PJSC & Others [2019] DIFC CFI 054

This is a particularly useful UAE authority because the DIFC Court directly considered claims under UAE law involving fraud, unjust enrichment and restitution.

Facts

The dispute involved financial instruments and alleged deceptive conduct concerning the transfer of bonds and payment of a substantial coupon.

The claimant relied upon UAE Civil Code provisions concerning:

• fraud;
• causing harm;
• unjust enrichment;
• unjustified acquisition; and
• restitution.

Court's reasoning

The Court considered Articles 318, 319 and 324 of the UAE Civil Code and examined whether the claimant had the necessary proprietary entitlement to bring the restitution claim. It concluded, in relation to the coupon payment, that the party asserting restitution had to establish the necessary title or immediate right to possession.

Principle

A restitution claim is not simply a substitute for proving ownership.

The claimant must establish the legal foundation of its entitlement to the property.

Importance

This is particularly relevant to:

• securities fraud;
• investment fraud;
• financial intermediaries;
• transferred securities;
• coupon payments; and
• multi-party financial transactions.

11. Case 4 — Emirates NBD Bank PJSC v Almakhawi & Others, DIFC CFI 039/2025

This is a significant modern authority involving alleged fraudulent asset transfers.

Facts

Emirates NBD sought recovery of approximately USD 90 million and alleged that assets had been transferred among family members to frustrate enforcement of judgments.

The Bank relied upon:

• Article 282 — harm;
• Article 283 — direct and consequential harm;
• Article 285 — deception;
• Article 391 — protection of creditors against fraudulent transactions; and
• Articles 394–395 — sham transactions. 

Legal significance

The case demonstrates that financial fraud is not limited to the original fraudulent acquisition of money.

Fraud can also arise through post-judgment asset movements designed to prevent creditors from reaching assets.

The judgment discusses the concept of an unwinding claim and records a Dubai Court of Cassation authority stating that a debtor's assets serve as a general security for creditors and that the law provides mechanisms for protecting that security against fraudulent actions.

Importance

The case is particularly relevant to:

• asset shielding;
• fraudulent transfers;
• creditor protection;
• sham gifts;
• transfers to family members;
• judgment enforcement; and
• tracing of assets.

12. Case 5 — Dubai Court of Cassation, Case No. 510/2024

This authority is discussed in the 2026 Emirates NBD v Almakhawi proceedings.

Principle

The Dubai Court of Cassation explained the concept of the unwinding claim as a mechanism protecting creditors against diminution of the debtor's assets through fraudulent conduct or negligence.

The debtor's property constitutes the general security available to creditors, and the creditor may have legal mechanisms to challenge transactions that improperly diminish that security.

Importance

This is distinct from an ordinary claim for damages.

The creditor may be attempting to say:

"The debtor transferred the asset in a manner designed to defeat my rights; therefore the transaction itself should be challenged."

This is especially important in high-value financial fraud and enforcement litigation.

13. Case 6 — UAE/Dubai Banking Unauthorized-Transfer Case, Cassation Judgment No. 941/2020

A particularly important banking-fraud authority concerns unauthorized withdrawals and transfers from a corporate bank account.

The UAE judgment records that two unauthorized company partners made withdrawals and transfers from the company's account, while the bank allegedly failed to take the precautions required by banking practice. The employees were also criminally convicted for misappropriating company funds.

Court's reasoning

The judgment recognized different sources of liability:

• the bank's liability arose from its contractual banking relationship with the customer;
• the unauthorized persons' liability arose from tortious/legal obligations.

The Court also recognized that the bank could be responsible where it improperly permitted unauthorized persons to execute transactions without adequate verification.

Important principle

The case illustrates that the same financial loss can potentially produce liability based upon different legal sources.

For example:

Bank → contractual liability

Fraudster → tortious liability

The obligations may have the same economic subject—replacement of the money—but arise from different legal relationships.

14. Case 7 — Dubai SIM-Swap Banking Fraud Litigation

A Dubai banking case concerned a customer whose bank account was emptied after a fraudulent SIM-card replacement.

A bank employee allegedly provided personal and identification information that facilitated the fraudulent replacement of the customer's SIM card. The replacement SIM was then used to alter banking credentials and remove funds from the account.

The Dubai courts ultimately imposed liability on the bank and ordered substantial compensation; the final amount paid reportedly included the lost funds, interest and additional compensation.

Significance

The case demonstrates the potential interaction between:

• banking contracts;
• data confidentiality;
• identity verification;
• employee misconduct;
• fraud;
• negligence;
• tortious liability; and
• financial restitution.

It is particularly relevant to modern digital financial fraud.

15. Case 8 — Abu Dhabi Commercial Bank PJSC v Bavaguthu Raghuram Shetty & Others [2022] EWHC 529 (Comm)

Although decided by the English High Court, this case involved claims formulated under UAE law, making it relevant to UAE-law fraud analysis.

The claims relied upon Article 285 of the UAE Civil Code and alleged deception causing financial harm. The pleaded framework also relied upon Articles 282, 292 and 293 concerning compensation and damages.

Significance

The case illustrates the operation of UAE-law fraud claims in complex international financial litigation.

It is particularly relevant where:

• the transaction is cross-border;
• the parties are located in different jurisdictions;
• substantial financial institutions are involved;
• fraud allegations involve multiple defendants; and
• the claimant seeks compensation for consequential financial loss.

16. Case 9 — NMC Healthcare Ltd & Others v Shetty & Others [2025] ADGM CFI 0007

This is another important modern UAE financial-fraud litigation.

The proceedings involved extensive allegations of financial fraud and claims based on UAE law, including reliance upon:

• Article 282 — tortious liability;
• Article 283 — harm and causation;
• Article 285 — fraud/deception.

The proceedings also involved claims against financial institutions and allegations concerning contractual, tortious and fraud-related duties.

Importance

The case illustrates how modern UAE fraud litigation can involve a combination of:

• corporate fraud;
• banking relationships;
• contractual duties;
• tortious duties;
• fraud;
• gross negligence;
• tracing;
• restitution; and
• insolvency-related claims.

17. Civil Consequences of Criminal Fraud

A financial fraud may generate both criminal and civil proceedings.

For example:

Criminal case

→ establishes criminal responsibility for fraud, embezzlement or related offences.

Civil case

→ seeks recovery of money, compensation, restitution or other civil remedies.

A final criminal judgment can have important evidentiary/res judicata consequences in subsequent civil proceedings concerning facts necessarily determined by the criminal judgment.

This is particularly relevant where employees or directors are convicted of:

• embezzlement;
• breach of trust;
• fraudulent transfers;
• forgery;
• unauthorized withdrawals; or
• financial misappropriation.

The 2026 Dubai Court of Cassation proceedings concerning alleged misappropriation of institutional funds illustrate the continuing importance of the relationship between criminal findings and subsequent civil claims for restitution and compensation.

18. Fraudulent Bank Transfers

A fraudulent bank transfer can involve several potential defendants:

1. Fraudster

Potential liability for:

• deception;
• unlawful acquisition;
• tortious harm;
• restitution; and
• potentially criminal fraud.

2. Bank employee

Potential liability where the employee:

• knowingly assists the fraud;
• improperly discloses customer information;
• ignores mandatory procedures; or
• facilitates unauthorized transactions.

3. Bank

Potential contractual liability may arise where the bank fails to perform its obligations under the banking relationship or applicable banking standards.

4. Recipient bank/account holder

Depending upon the circumstances, the recipient may face restitutionary claims if money was received without lawful cause.

19. Unjust Enrichment in Fraudulent Transactions

A typical restitutionary structure is:

Claimant's property

↓

Transferred to defendant

↓

No valid legal basis

↓

Defendant enriched

↓

Claimant deprived

↓

Restitution

The claimant must establish the relevant legal elements rather than simply proving that another person became richer.

The Dubai Court of Cassation's reasoning in Case No. 216/2009 is particularly important because it places emphasis upon transfer of property and absence of lawful cause.

20. When Restitution May Not Be Available

Restitution is not automatically available merely because one party considers the transaction unfair.

It may be unavailable or inappropriate where:

• a valid contract provides the legal basis for the payment;
• the recipient had a lawful entitlement;
• the claimant cannot establish ownership or immediate entitlement;
• the claim is actually contractual;
• the claimant cannot prove the relevant transfer;
• another legal remedy exclusively governs the relationship; or
• the claimed amount represents consequential loss rather than the property unjustly acquired.

This is why the distinction made in Larmag between ownership/entitlement and a general claim of enrichment is significant.

21. Fraudulent Transfers to Defeat Creditors

A sophisticated financial-fraud situation occurs when a debtor does not directly steal money but instead transfers assets to prevent creditors from recovering them.

For example:

Debtor owes Bank AED 100 million

↓

Judgment obtained

↓

Debtor transfers property to relative

↓

Transfer described as gift

↓

Debtor retains effective control

↓

Creditor cannot easily enforce

This can potentially raise:

• fraudulent-transfer issues;
• sham transaction issues;
• creditor-protection claims;
• tortious liability;
• unwinding;
• tracing; and
• restitution.

The Emirates NBD v Almakhawi proceedings provide a contemporary example of these issues.

22. Sham Transactions

A sham transaction is particularly important in financial fraud.

The apparent transaction may say:

"Property has been gifted."

But the actual arrangement may allegedly be:

"The debtor remains the beneficial/effective owner and continues controlling the property."

In such circumstances, the court may have to examine:

• actual intention;
• surrounding circumstances;
• consideration;
• possession;
• control;
• financial records;
• communications;
• relationship between parties; and
• subsequent conduct.

The UAE Civil Code provisions concerning sham arrangements are expressly relied upon in the modern Emirates NBD v Almakhawi litigation.

23. Tracing and Recovery

Tracing becomes important when fraudulently obtained money is transferred through multiple accounts.

For example:

AED 10 million fraudulently obtained

↓

Account A

↓

Account B

↓

Investment account

↓

Real estate purchase

↓

Transfer to family member

A claimant may seek to establish the connection between the original property and the later asset.

This can involve:

• bank statements;
• payment records;
• transaction histories;
• corporate records;
• property documents;
• electronic communications;
• expert accounting evidence; and
• forensic financial analysis.

24. Compensation Versus Restitution

25. Evidence in UAE Financial Fraud Litigation

Evidence is often decisive.

Important evidence may include:

Banking evidence

• account statements;
• SWIFT messages;
• payment instructions;
• transfer confirmations;
• beneficiary information;
• transaction logs.

Electronic evidence

• emails;
• WhatsApp messages;
• SMS messages;
• electronic signatures;
• login records;
• IP information;
• digital authentication records.

Corporate evidence

• board resolutions;
• powers of attorney;
• shareholder records;
• internal authorizations;
• accounting records.

Fraud evidence

• false representations;
• forged documents;
• inconsistent statements;
• concealed relationships;
• unusual transfers;
• unexplained payments.

Expert evidence

For major financial disputes, forensic accounting evidence can be particularly important in establishing:

• amount transferred;
• source of funds;
• destination of funds;
• financial loss;
• benefit received; and
• connection between transactions.

26. Causation

Fraud alone does not necessarily establish the entire amount of damages.

The claimant generally needs to connect:

fraudulent conduct → financial transaction → loss.

Article 283 distinguishes direct and consequential harm, while Article 292 addresses assessment of compensation according to the harm suffered and loss of profit where it is a natural consequence of the harmful act.

Therefore, a claimant should separate:

1. money directly taken;
2. consequential financial losses;
3. lost profits;
4. interest/financing losses; and
5. other claimed damages.

27. Limitation Issues

Limitation can become particularly important in fraud cases because the victim may not discover the fraud immediately.

The modern Emirates NBD v Almakhawi judgment discusses Article 298 of the UAE Civil Code, including the three-year period for damages arising from an unlawful act from the date on which the victim knows of the injury and the responsible person, subject to the statutory long-stop period. The judgment also refers to a Dubai Court of Cassation decision concerning these limitation principles.

Consequently, a claimant should establish:

• when the fraud occurred;
• when it was discovered;
• when the victim identified the wrongdoer;
• whether concealment delayed discovery; and
• which limitation provision governs the particular remedy.

28. Remedies Available

Depending upon the circumstances, a successful claimant may seek:

A. Restitution

Return of:

• money;
• securities;
• property;
• equivalent assets; or
• their legally recoverable value.

B. Damages

For:

• direct loss;
• consequential loss;
• lost profit where legally recoverable;
• and potentially moral damage in appropriate circumstances.

C. Unwinding

Challenge to fraudulent asset transfers.

D. Declaration

A court may determine that a transaction is:

• ineffective;
• sham;
• unauthorized; or
• otherwise incapable of defeating the claimant's rights.

E. Interim measures

Depending on the applicable court and procedural regime:

• asset preservation;
• attachment;
• injunction-type relief;
• disclosure;
• preservation of evidence.

29. Important Legal Distinction: Fraudulent Contract vs Fraudulent Transfer

Fraudulent contract

The fraud occurs when the victim is induced to enter into the transaction.

Example:

A falsely represents that an investment is guaranteed and induces B to transfer AED 2 million.

Potential remedies:

• rescission/avoidance where available;
• restitution;
• damages;
• fraud claim.

Fraudulent transfer

The transaction itself may initially appear legitimate, but the debtor later transfers assets to defeat creditors.

Example:

A owes B AED 20 million and transfers his property to a relative to prevent enforcement.

Potential remedies:

• unwinding;
• creditor-protection remedies;
• sham-transaction challenge;
• damages;
• tracing.

The two situations should not be conflated.

30. Role of Banks in Financial Fraud

UAE banking litigation shows that banks can face contractual liability where they fail to comply with their obligations toward customers.

The 2020-era UAE cassation authority involving unauthorized corporate withdrawals is particularly important because the Court treated the bank's responsibility as arising from the banking-services contract, while the fraudsters' responsibility arose from tortious/legal obligations.

Therefore, the question is not simply:

"Was there fraud?"

It may also be:

"Did the bank comply with its contractual and banking obligations when executing the disputed transaction?"

31. Multiple Defendants

Large financial-fraud litigation frequently involves several defendants.

For example:

• fraudster;
• director;
• employee;
• bank;
• intermediary;
• recipient;
• related company;
• nominee;
• family member.

Each defendant's liability must be analyzed separately.

The legal basis may differ:

32. Relationship Between Criminal and Civil Proceedings

A criminal conviction for fraud or embezzlement can be extremely important in subsequent civil proceedings.

For example:

Employee convicted of stealing AED 5 million

↓

Civil claimant proves resulting loss

↓

Civil court considers consequences of established criminal facts

↓

Claim for restitution/compensation

The civil court nevertheless has to determine the civil consequences and amount recoverable under the applicable law.

This distinction is reflected in modern UAE litigation involving alleged misappropriation and the subsequent civil claims for restitution and compensation.

33. Practical Structure of a UAE Fraud and Restitution Claim

A well-structured claim can be organized as follows:

Step 1 — Identify the property

What was taken?

• cash;
• securities;
• real estate;
• shares;
• cryptocurrency;
• receivables;
• other property.

Step 2 — Identify the transfer

When and how did it move?

Step 3 — Establish deception or lack of lawful cause

Was the transfer induced by:

• false representation;
• concealment;
• unauthorized instruction;
• forgery;
• mistake;
• sham transaction?

Step 4 — Identify the recipient

Who ultimately obtained the benefit?

Step 5 — Establish causation

How did the conduct cause the claimant's loss?

Step 6 — Select the remedy

• damages;
• restitution;
• unwinding;
• declaration;
• tracing;
• combination of remedies where legally permissible.

Step 7 — Preserve evidence

Immediately preserve:

• bank records;
• electronic communications;
• contracts;
• accounting documents;
• transaction histories;
• corporate records.

34. Consolidated Case-Law Table

35. Conclusion

UAE civil law provides several interconnected mechanisms for dealing with fraud in financial transactions.

The principal framework can be summarized as:

Fraudulent conduct
↓
Deception / wrongful act
↓
Financial transfer or acquisition
↓
Loss to claimant / benefit to defendant
↓
Causation and proof
↓
Civil liability under Articles 282–285
↓
Restitution where property was obtained without lawful cause under Articles 318–319
↓
Unwinding/sham-transaction remedies where fraudulent asset transfers defeat creditors
↓
Damages, restitution and other appropriate remedies

The case law shows three particularly important principles.

First, fraud can create civil liability independently of the criminal consequences of the same conduct. Second, restitution is conceptually different from compensation: restitution focuses on restoring property or an unjust benefit, while damages focus on compensating legally recoverable harm. Third, a valid contractual or other lawful basis for a payment can defeat a bare unjust-enrichment claim, as demonstrated by the Dubai Court of Cassation's jurisprudence beginning with Case No. 216/2009.

In modern UAE financial litigation, these principles increasingly intersect with banking fraud, electronic transactions, asset tracing, fraudulent transfers, sham transactions, creditor protection and cross-border enforcement. The Emirates NBD proceedings and the unauthorized-bank-transfer jurisprudence demonstrate how traditional Civil Code principles are being applied to increasingly sophisticated financial disputes.

The case names and principles above are provided for legal research and academic purposes; older UAE authorities should be checked against the legislation and judicial framework applicable to the date and forum of the particular dispute.