UNITED ARAB EMIRATES Law and Practice Contributed by: Stuart Paterson, Janine Mallis and Tania Forichon, Herbert Smith Freehills
tionally be made good, and if it is consequential, there must be a wrongful or deliberate element, and the act must have led to the damage, which will typically be the case in fraud matters. In all cases, the compensation will be assessed based on the amount of harm suffered by the victim. This may include loss of profit, provided that the harmful act caused it. Misappropriation Articles 304 to 312 of the Civil Code include pro - visions which give rise to liability due to misap - propriation of property. Whoever misappropri - ates property belonging to another must restore it and/or repay any losses. The wrongdoer must also hand over any ben - efits or increase they have obtained from such property. 1.2 Causes of Action After Receipt of a Bribe Criminal Claims A complaint/police report can be made against the briber and/or the bribee who has committed any of the bribery offences set out in 1.1 General Characteristics of Fraud Claims . Any federal government employee requesting or receiving a bribe will also be referred to the judicial authori - ties. Onshore UAE – Civil Claims Several civil claims can be brought against per - sons involved in bribery. Under Federal Decree Law No 32 of 2021 on Commercial Companies (the “CCL” ), each manager of a limited liability company is liable to the company, shareholders and third parties for any fraudulent acts (the terms “managers” and “directors” are used interchangeably under
UAE law). Further, managers will be required to compensate the company for any losses or expenses incurred due to abuse of power or vio - lation of the provisions of any law in force, the company’s memorandum of association or their contract of appointment, or due to gross error by the manager. Similarly, under the CCL, the directors and executive management are responsible for the company, the shareholders, and the third parties for all acts of fraud, misuse of power, and viola - tion of the CCL’s provisions and the company’s articles of association. A director who has breached the CCL may be subject to financial penalties and/or criminal sanctions. DIFC and ADGM – Civil Claims In the DIFC and ADGM, a director of a com - pany cannot accept a benefit from a third party where the benefit is conferred on them due to their position as a director of the company for them doing (or not doing) anything as a director, unless the acceptance of such benefit cannot reasonably be regarded as likely to give rise to a conflict of interest. Any breach of these duties may result in dis - qualification, personal civil liability, and damages payable to the company with respect to loss - es suffered, in addition to the criminal liability already discussed in 1.1 General Characteris- tics of Fraud Claims . In onshore UAE and the DIFC/ADGM, it would likely be possible to establish that an act of brib - ery gives rise to a cause of action under general tort/harmful act principles.
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