The Dubai Civil Court has dismissed a lawsuit filed by a trading company seeking AED 1 million in compensation from two of its former employees, whom it accused of disclosing company secrets and diverting clients to a competing business.

According to case details, the company noticed a drop in sales and later discovered that its former Sales Manager and Accountant (employed from 2017 to 2023) had established a rival company, allegedly with the assistance of an administrative employee who worked there until January 2024.

The company claimed that the former employee used internal data and client information for personal gain, causing substantial financial losses. It relied on a criminal judgment issued by Sharjah Primary Court, which convicted the same employee and fined him AED 20,000 for leaking company information - a verdict later upheld by the Court of Appeal, becoming final.

During the civil proceedings, the court assigned a forensic expert to review the case. His report concluded that no direct link existed between the original company and the competing business and that no contractual clause prevented the employees from engaging in competition after leaving their jobs.

The expert further confirmed that the company’s sales did not decline after the rival firm was established in 2021; on the contrary, they increased significantly in 2022 and 2023. The report also noted that transactions between the new company and two former clients occurred after the employment relationship had ended.

Citing Articles (282–292) of the UAE Civil Transactions Law, the court ruled that civil liability requires proof of fault, damage, and a causal relationship.

Although the criminal case established fault on the employee’s part, the civil court found that no tangible damage was proven, invalidating one of the core elements of liability. Furthermore, it held that the administrative employee had no access to sensitive company information and did not commit any wrongdoing.

Consequently, the Dubai Civil Court rejected the case in its entirety, ordering the plaintiff company to pay half of the legal fees and court expenses, emphasizing that the absence of proven damage renders the compensation claim legally baseless.