Civil Law and UAE: Shifting Burden in Fraud and Negligence Cases

1. Introduction

The expression “shifting burden of proof” describes situations in which the initial responsibility to establish a claim lies with one party, but the evidential burden may move to the other party after sufficient evidence has been produced.

This issue is particularly important in fraud and negligence cases.

Fraud normally involves allegations of intentional deception, dishonest conduct, concealment, forgery, or fraudulent representation. Negligence generally involves a failure to exercise the required degree of care, resulting in legally recognized harm.

Under UAE civil litigation principles, the starting point is that the claimant must prove the facts necessary to establish the claim. Federal Decree-Law No. 35 of 2022 on Evidence states that the onus of proof rests on the claimant and that the defendant is entitled to disprove the claim. It also permits courts to evaluate conflicting evidence and draw appropriate inferences from established facts.

Therefore, “shifting burden” should not be understood as an automatic transfer of the legal burden merely because fraud or negligence has been alleged.

A useful distinction is:

Legal burden: the ultimate obligation to prove the claim.

Evidential burden: the practical obligation to produce evidence responding to evidence already produced.

Inference: a conclusion drawn by the court from established circumstances.

Presumption: a legal or evidential rule allowing a fact to be accepted unless rebutted.

The DIFC Courts have expressly emphasized this distinction in fraud and forgery litigation.

2. Meaning of Shifting Burden of Proof

The ordinary position is:

The party asserting a legally relevant fact must establish it.

For example:

Fraud claim

A claimant alleging fraud normally has to establish:

A representation, concealment, or other relevant conduct;

Falsity or unlawfulness;

Knowledge, dishonesty, or the required fraudulent state of mind;

Reliance where required;

Causation; and

Loss or another legally recognized consequence.

Negligence claim

The claimant generally has to establish:

Existence of a duty;

Breach of the required standard of care;

Causation; and

Damage.

Once the claimant produces evidence establishing a prima facie case, however, the defendant may have to produce evidence explaining or rebutting those circumstances.

That is the practical meaning of an evidential shift.

It does not necessarily mean that the ultimate legal burden has permanently transferred.

3. UAE Statutory Starting Point

A. UAE Evidence Law

Federal Decree-Law No. 35 of 2022 on Evidence provides the basic framework.

Article 1 recognizes the claimant's right to prove the claim and the defendant's right to disprove it.

Article 2 establishes the traditional principle that:

the burden of proof rests upon the claimant.

The law also recognizes different forms of evidence, including documentary evidence, testimony, expert evidence, admissions, circumstantial evidence and oaths.

This is particularly significant in fraud cases because fraud is rarely established through one direct piece of evidence.

A court may instead examine:

bank records;

emails;

transaction patterns;

inconsistent explanations;

electronic documents;

expert reports;

corporate records;

communications;

timing of transactions;

subsequent conduct; and

relationships between the parties.

4. Fraud and the Evidential Burden

Fraud requires particularly careful treatment because a fraud allegation is serious.

However, the civil standard does not automatically become a criminal standard.

The DIFC Court of Appeal in SBM Bank (Mauritius) Ltd v Renish Petrochem FZE & Others [2022] DIFC CA 011 confirmed that the civil standard remains the balance of probabilities. The court explained that the unusual or improbable nature of alleged conduct may affect the evaluation of evidence, but does not create a separate heightened standard of proof.

Thus:

Fraud does not automatically require proof beyond reasonable doubt.

Instead:

The court asks whether, considering all the evidence, the fraudulent explanation is more probable than the competing explanation.

5. Circumstantial Evidence and Fraud

Fraud is frequently proved by inference.

For example, suppose:

a director authorizes a payment;

the payment goes to an associated company;

supporting documents are created immediately afterward;

the transaction has no commercial explanation;

the director gives inconsistent explanations; and

company records contradict the explanation.

No single fact may prove fraud.

Taken together, however, the facts may establish an inference of dishonesty.

This is why the evidential burden can appear to “shift.”

The claimant establishes a series of primary facts. The defendant then needs to provide a credible explanation.

6. Negligence and Shifting Evidential Burdens

The same concept can arise in negligence.

Consider a professional service provider who controlled important information.

The claimant may prove:

the defendant had responsibility for the system;

something went seriously wrong;

relevant records were under the defendant's control;

the defendant failed to preserve or disclose important information; and

the claimant suffered foreseeable loss.

The claimant still has to establish the legal elements of negligence.

However, once a sufficiently strong evidential foundation exists, the defendant may need to explain:

what procedures were followed;

what precautions were taken;

who was responsible;

whether the system complied with professional standards;

what caused the failure; and

whether another event caused the loss.

This is an evidential response, rather than an automatic reversal of the legal burden.

7. Difference Between Legal Burden and Evidential Burden

This distinction is central to understanding UAE fraud litigation.

8. Case Law

Case 1: SBM Bank (Mauritius) Ltd v Renish Petrochem FZE & Hiteshkumar Chinubhai Mehta [2018] DIFC CFI 054

Facts

The dispute concerned banking transactions and allegations involving fraudulent or dishonest conduct.

The Court examined how fraud could be established where direct evidence of a person's state of mind was unavailable.

Principle

The Court held that fraud may be established through inferences drawn from primary facts.

Importantly, it stated that the civil standard remains the balance of probabilities.

Fraud does not require a special criminal standard of proof.

The court must consider the evidence as a whole rather than artificially isolating every individual fact.

Importance

This case demonstrates how the evidential burden may practically move.

Once multiple circumstances point toward dishonesty, the defendant may need to provide an innocent explanation.

However, the claimant still carries the ultimate burden of establishing the allegation.

9. Case 2: SBM Bank (Mauritius) Ltd v Renish Petrochem FZE & Others [2022] DIFC CA 011

This was the appellate stage of the SBM Bank litigation.

Principle

The DIFC Court of Appeal confirmed that:

the civil standard is balance of probabilities;

fraud does not have a separate heightened standard;

unusual or improbable facts may be relevant when assessing probabilities;

the court must examine all the evidence together; and

the seriousness of an allegation does not transform the civil standard into a criminal standard.

The Court emphasized that the question is whether the evidence establishes the alleged dishonesty on the balance of probabilities.

Importance

This is one of the most important authorities for understanding the relationship between:

fraud + evidential burden + standard of proof.

10. Case 3: ICICI Bank Ltd v Bavaguthu Raghuram Shetty [2022] DIFC CFI 034

Facts

The case involved guarantees and an allegation concerning the authenticity of signatures.

The bank argued that the defendant should bear the burden of proving forgery.

Court's approach

The Court rejected an automatic rule that the person alleging forgery must always carry the legal burden.

Instead, the Court emphasized the ordinary rule:

The legal burden lies on the party who needs to prove the particular fact in order to succeed.

In the case, the bank had to establish that the defendant had executed the guarantees or was otherwise bound by them. The defendant did not acquire the legal burden simply because he alleged forgery.

Importance

This case is extremely important for the concept of shifting burden.

It distinguishes:

legal burden
from
evidential burden.

The Court expressly recognized that the evidential burden can shift as evidence develops, while the legal burden does not necessarily change.

11. Case 4: Graciela Limited v Giacobbe [2014] DIFC CFI 027

Facts

The case involved allegations concerning interference with the claimant's IT system and associated wrongdoing.

The Court considered the standard applicable to allegations of serious misconduct.

Principle

The Court stated that the burden of proof was on the claimant and that the civil standard was the balance of probabilities.

It discussed the relationship between the seriousness of an allegation and the strength of evidence required to persuade the court.

The court did not treat serious allegations as automatically requiring a different legal standard.

Importance

This case is useful in modern fraud and cyber-fraud disputes because it shows how a claimant can rely upon:

electronic evidence;

technical evidence;

circumstantial evidence;

conduct; and

surrounding circumstances.

The greater the improbability of the alleged event, the more persuasive the evidence may need to be before the court is satisfied on the balance of probabilities.

12. Case 5: BAM Higgs & Hill LLC v Affan Innovative Structures LLC & Amer Affan [2021] DIFC CFI 106

Facts

The litigation included allegations of fraud concerning commercial/project transactions.

The Court examined how allegations of fraud should be pleaded and proved.

Principle

The Court emphasized that fraud should be clearly and unequivocally pleaded.

The party alleging fraud must identify the factual matters from which the inference of fraud is sought.

The Court also referred to the principle that fraud should not simply be inferred where the conduct is equally consistent with an innocent explanation.

Importance

This case demonstrates that shifting evidential burdens do not eliminate the claimant's responsibility to identify the factual foundation of fraud.

A claimant cannot simply plead:

“The defendant acted fraudulently.”

The pleading must explain what happened, why it was fraudulent, and what evidence supports the allegation.

13. Case 6: VTJ Ltd v Mohammed Ammar Al Hassan [2018] DIFC CA 009

Facts

The dispute involved an alleged fabricated or forged memorandum of understanding.

The appellant challenged the conclusion that the document was fabricated.

Principle

The DIFC Court of Appeal emphasized that:

fraud must be distinctly alleged;

fraud must be distinctly proved; and

the burden of establishing forgery rests upon the party seeking to establish that proposition.

The absence of sufficient forensic or other evidence was significant.

Importance

The case shows the limits of evidential shifting.

A defendant's failure to explain every suspicious circumstance does not automatically prove forgery.

The claimant must first establish the factual foundation of the allegation.

14. Case 7: Saif Saeed Sulaiman Mohammad Al Mazrouei v Bankmed [2019] DIFC CA 011

Facts

The case involved allegations of fraud and issues concerning whether the matter could appropriately be resolved without a full trial.

Principle

The DIFC Court of Appeal recognized that fraud allegations can create particular difficulties for summary judgment because they may depend on:

circumstantial evidence;

credibility;

surrounding circumstances; and

inferences about a person's state of mind.

The existence of a fraud allegation may therefore be a reason for permitting fuller examination of the evidence.

Importance

This demonstrates a procedural dimension of shifting evidential burdens.

Where the evidence requires investigation, the court may consider that a full trial is more appropriate than deciding the dispute prematurely.

15. Case 8: Obie v Osric [2025] DIFC CFI 095

Facts

The case concerned alleged misrepresentation and negligence in connection with legal services.

The claimant alleged that the defendant represented himself as qualified to provide legal services.

Principle

The Court found that the defendant's communications created an implied representation concerning his professional status and concluded that his drafting and advice fell below the required reasonable standard of care.

Importance

The case illustrates the interaction between:

misrepresentation;

fraud;

negligence;

professional standards; and

reliance.

It demonstrates that a claimant may rely upon documentary communications and surrounding conduct to establish what representation was made and whether the professional standard was met.

16. Fraud Does Not Automatically Shift the Legal Burden

A common misunderstanding is:

“Once fraud is alleged, the defendant must prove that he was innocent.”

That is not the general rule.

The better formulation is:

The claimant bears the legal burden of proving the fraud.

But if the claimant establishes convincing primary facts, the defendant may have an evidential burden to provide an explanation.

For example:

Stage 1

Claimant proves:

defendant controlled the account;

money was transferred;

defendant's related company received the money;

records show no legitimate business purpose.

Stage 2

The evidential burden practically shifts.

The defendant may need to explain:

why the payment occurred;

who authorized it;

why the related company received it;

what contractual basis existed; and

why the documents appear inconsistent.

Stage 3

Court evaluates the entire evidence.

The legal burden still concerns whether the claimant has established the necessary elements of fraud.

17. Negligence: When the Evidential Burden Becomes Important

Negligence litigation can involve information asymmetry.

For example, in:

medical negligence;

banking negligence;

construction defects;

professional negligence;

cybersecurity failures;

financial services;

engineering disputes; and

corporate governance claims,

the defendant may possess most of the relevant technical evidence.

The claimant may therefore establish a prima facie case from available evidence.

The defendant may then be expected to produce evidence concerning:

internal procedures;

safety protocols;

compliance systems;

professional standards;

maintenance records;

transaction controls;

warnings;

audits;

expert assessments; and

causation.

This does not necessarily reverse the legal burden.

18. System Failures and Negligence

Modern UAE litigation increasingly involves sophisticated systems.

For example:

Banking

A claimant may allege that a bank failed to detect unauthorized instructions.

Construction

A claimant may establish defective construction and require the contractor to explain compliance with specifications.

Cybersecurity

A claimant may establish unauthorized access and then rely on evidence concerning the defendant's security controls.

Professional services

A claimant may establish that advice produced a foreseeable loss, while the professional produces records showing the standard of care followed.

Corporate fraud

A shareholder or creditor may establish suspicious transactions and seek explanations from directors.

These cases illustrate why the evidential burden can become dynamic.

19. Fraud Versus Negligence

A critical distinction must be maintained.

A negligent act should not automatically be characterized as fraudulent.

Likewise, suspicious conduct does not automatically establish dishonesty.

20. Role of Expert Evidence

Expert evidence can be particularly important where the defendant argues:

“The loss was caused by something else.”

For example:

Construction

Expert evidence may determine whether a defect resulted from:

design;

materials;

workmanship;

supervision; or

later modification.

Medical negligence

Experts may address whether the treatment departed from the appropriate professional standard.

Banking/cybersecurity

Experts may analyze:

authentication;

access controls;

transaction monitoring;

cybersecurity systems;

electronic signatures; and

system logs.

The court remains responsible for determining the legal issues.

21. Role of Documentary and Digital Evidence

Fraud and negligence disputes increasingly depend upon digital records.

Important evidence may include:

emails;

WhatsApp communications;

transaction logs;

electronic signatures;

access records;

CCTV;

accounting software;

metadata;

audit trails;

blockchain records;

banking records;

internal policies; and

system-generated alerts.

Under the UAE Evidence Law, documentary, expert and circumstantial evidence are recognized forms of proof.

Consequently, a party seeking to establish a shifting evidential burden should build the case from multiple corroborating pieces of evidence, rather than relying upon a single suspicious circumstance.

22. Presumptions Versus Inferences

These concepts should not be confused.

Presumption

A legal rule may allow a fact to be presumed unless rebutted.

Inference

The court reasons from proven facts toward another fact.

For example:

Proven facts:

Defendant controlled the account.

Defendant authorized an unusual transaction.

The transaction benefited an associated entity.

The defendant's explanation conflicts with contemporaneous records.

Possible inference:

The transaction may have been dishonest.

The inference is not the same thing as a statutory presumption.

23. Relationship With the 2025 UAE Civil Transactions Law

The UAE's Federal Decree by Law of 2025 promulgating the Civil Transactions Law forms part of the current civil-law framework. The legislation contains provisions concerning contracts, obligations, causes, rights and related civil-law principles. Its temporal provisions also address how new provisions apply following entry into force.

However, the burden of proof is principally governed by the UAE Evidence Law, rather than being treated as merely a substantive tort rule.

Therefore, a legal analysis should normally consider both:

the substantive civil-law rules governing fraud, negligence, obligations and compensation; and

the Evidence Law governing how those facts must be established.

24. Practical Example: Fraudulent Bank Transfer

Suppose Company A discovers that AED 5 million has been transferred from its account.

The company establishes:

the transfer occurred;

the authorization was unusual;

the beneficiary was connected to an employee;

the employee had access to payment systems;

internal records show irregular approval;

communications were deleted immediately afterward.

The initial burden remains with Company A.

But once these facts are established, the evidential position may become difficult for the employee or other defendant.

The defendant may need to explain:

authorization;

access;

purpose;

beneficiary relationship;

communications; and

transaction instructions.

The court then considers the entire evidential picture.

25. Practical Example: Negligent Construction

A building develops major structural defects.

The owner establishes:

the contractor designed or constructed the relevant component;

the defect appeared within the relevant period;

the defect caused repair costs;

the construction documents identify the contractor's responsibilities.

The contractor may then produce:

engineering reports;

inspection records;

material certificates;

site records;

testing documents;

compliance certificates; and

evidence of later alterations.

The contractor's production of such evidence does not necessarily mean that the legal burden has shifted permanently.

It is part of the court's evaluation of whether negligence and causation have been proved.

26. Practical Example: Professional Negligence

Suppose a financial adviser gives investment advice and the client suffers loss.

The claimant must normally establish:

duty;

breach;

causation; and

damage.

The adviser may respond by showing:

risk warnings;

suitability assessments;

client instructions;

market information;

professional standards;

correspondence; and

investment disclosures.

The evidential burden therefore operates dynamically as the evidence develops.

27. Limits on Shifting Burden

The doctrine should not be overstated.

A court should not simply say:

“The defendant has not proved innocence, therefore fraud is established.”

That would incorrectly reverse the legal burden.

Similarly:

“An accident occurred, therefore negligence is automatically established.”

That is also incorrect unless the applicable substantive law creates an appropriate presumption or inference.

The court must still identify:

the legal duty;

the relevant breach;

causation;

damage;

applicable statutory provisions;

contractual provisions; and

the evidence supporting each element.

28. Main Principles Derived From the Cases

The UAE/DIFC authorities demonstrate several important principles.

Principle 1 — Claimant normally starts with the burden

The person asserting the claim must establish the necessary facts.

Principle 2 — Evidential burden may move

As evidence develops, the opposing party may need to respond.

Principle 3 — Legal burden is different

The ultimate legal burden does not automatically transfer merely because the evidential burden changes.

Principle 4 — Fraud can be inferred

Direct evidence of dishonesty is not always necessary.

Principle 5 — Fraud must be properly pleaded

A general allegation of fraud is insufficient.

Principle 6 — Circumstances must be considered collectively

Courts may examine the total evidential picture rather than isolating each fact.

Principle 7 — Balance of probabilities remains the civil standard

Fraud does not automatically require proof beyond reasonable doubt.

Principle 8 — Innocent explanations matter

Where the established conduct is equally consistent with innocent conduct, an allegation of fraud may fail.

Principle 9 — Negligence requires its own elements

The existence of loss does not automatically prove negligence.

Principle 10 — Digital evidence is increasingly important

Modern fraud and negligence disputes often depend on electronic and expert evidence.

29. Mainland UAE and DIFC Distinction

This distinction is essential.

Mainland UAE

Mainland UAE courts principally operate under:

Federal civil legislation;

UAE Evidence Law;

applicable commercial legislation;

procedural legislation; and

relevant emirate-specific rules.

DIFC

The DIFC has its own legal framework and courts.

The DIFC Courts have developed substantial jurisprudence concerning:

fraud;

negligence;

misrepresentation;

professional duties;

evidence;

banking disputes;

electronic evidence; and

commercial wrongdoing.

Accordingly, the DIFC cases discussed above are valuable UAE authorities for comparative and analytical purposes, but a DIFC judgment should not automatically be treated as binding precedent on a mainland UAE court.

30. Exam-Oriented Answer

For an examination question on “Shifting Burden in Fraud and Negligence Cases in UAE Civil Law,” the answer can be summarized as follows:

The general UAE rule is that the claimant bears the burden of proving the claim. Federal Decree-Law No. 35 of 2022 on Evidence establishes the basic principle that the onus of proof lies on the claimant.

However, the evidential burden may shift during litigation. When the claimant establishes sufficient primary facts, the defendant may have to produce evidence explaining or rebutting those facts. This does not necessarily transfer the ultimate legal burden.

In fraud cases, courts may rely upon circumstantial evidence and reasonable inferences. The civil standard remains the balance of probabilities. The DIFC Court of Appeal in SBM Bank v Renish Petrochem confirmed that fraud does not carry a separate heightened standard of proof.

In ICICI Bank v Shetty, the DIFC Court expressly distinguished the legal burden from the evidential burden and explained that the evidential burden can shift while the legal burden remains with the party required to prove the relevant fact.

Fraud must also be specifically pleaded and proved, as illustrated by BAM Higgs & Hill v Affan and VTJ v Mohammed Ammar Al Hassan.

In negligence cases, the claimant generally must establish duty, breach, causation and damage. Nevertheless, once a prima facie case is established, the defendant may need to produce evidence concerning its procedures, professional standards, precautions and causation.

Therefore, the UAE approach can best be described as a distinction between the fixed legal burden and the dynamic evidential burden.

31. Quick Revision Table

32. Conclusion

The concept of shifting burden in UAE fraud and negligence litigation should be understood primarily as a distinction between the legal burden of proof and the evidential burden.

The claimant normally begins with the obligation to establish the essential facts. Once sufficient evidence is produced, however, the evidential pressure may move to the opposing party. The opposing party may then need to explain suspicious transactions, demonstrate proper procedures, produce relevant records or provide an alternative explanation for the established facts.

In fraud cases, the courts may reach conclusions from a combination of circumstances rather than requiring direct evidence of dishonesty. The civil standard remains the balance of probabilities. The DIFC authorities, particularly SBM Bank v Renish Petrochem and ICICI Bank v Shetty, provide clear illustrations of this distinction.

In negligence cases, the same evidential dynamic is increasingly important in complex areas such as banking, construction, professional services, cybersecurity and technology. Nevertheless, the existence of an evidential shift does not relieve the claimant of establishing the legal ingredients of the cause of action.

Thus, the modern UAE civil-law approach can be expressed as:

Claimant's initial proof → prima facie case → evidential response by defendant → judicial assessment of all evidence → determination of whether the legal burden has ultimately been satisfied.

The central principle is therefore not automatic reversal of the burden, but controlled movement of the evidential burden while the ultimate legal burden remains governed by the applicable law.

Key Cases to Remember

SBM Bank (Mauritius) Ltd v Renish Petrochem FZE [2018] DIFC CFI 054 — fraud can be established through cumulative circumstantial evidence.

SBM Bank v Renish Petrochem FZE [2022] DIFC CA 011 — balance of probabilities remains the civil standard for fraud.

ICICI Bank Ltd v Bavaguthu Raghuram Shetty [2022] DIFC CFI 034 — legal burden and evidential burden must be distinguished.

Graciela Ltd v Giacobbe [2014] DIFC CFI 027 — serious allegations remain subject to the civil standard, evaluated according to the probabilities and evidence.

BAM Higgs & Hill LLC v Affan Innovative Structures LLC [2021] DIFC CFI 106 — fraud must be clearly pleaded and supported by factual evidence.

VTJ Ltd v Mohammed Ammar Al Hassan [2018] DIFC CA 009 — fraud and forgery must be distinctly alleged and proved.

Saif Saeed Al Mazrouei v Bankmed [2019] DIFC CA 011 — fraud allegations may require fuller examination of evidence rather than premature summary determination.

Obie v Osric [2025] DIFC CFI 095 — application of misrepresentation and negligence principles to professional conduct.