The Dubai Civil Court of First Instance has dismissed a Dh1 million compensation lawsuit filed by a commercial establishment against three defendants, including two former employees accused of unfair competition, leaking trade secrets, and client poaching. The company had sought Dh1 million in material and moral damages, plus 5 percent legal interest, claiming the alleged actions harmed its business and reputation. Court records indicate the first defendant worked as an accountant and sales manager from 2017 to 2023, while the third defendant served as an administrative officer until January 2024. The plaintiff claimed sales declined after discovering that the first defendant had established a competing firm, allegedly with the administrative employee’s assistance, and that both diverted clients to the new business while still employed. The company cited a criminal judgment from Sharjah’s Court of First Instance, which convicted the first defendant of disclosing company secrets for personal gain and fined him Dh20,000. The expert also noted there were no contractual clauses preventing employees from joining or establishing a competitor after leaving their jobs. The report further showed that the company’s sales had actually increased in 2022 and 2023 compared with 2021, the year the competing business was established. The plaintiff also failed to provide audited financial statements or other proof of financial loss or reduced profits. The verdict was later upheld on appeal and became final. However, after reviewing the case documents and submissions, the Dubai Civil Court appointed an expert who found no direct link between the plaintiff and the competing company.
