Gary Black, from Lesmahagow, was facing 12 months in prison for an alleged “breach of trust”.
At a hearing at Edinburgh Sheriff Court, it was ruled that his human rights were at risk.
The 64-year-old was wanted over embezzlement charges which he said were invented by his former son-in-law.
The hearing took place on 17 November in Edinburgh, after a request was made to extradite Mr Black to the Middle Eastern country in 2013 after he was convicted in absentia of a £250,000 embezzlement.
But the court ruled that there was a high chance he would be denied his human rights in jail. It is believed to be the first attempted extradition to the UAE from Scotland.
In his judgment, Sheriff Thomas Welsh said there was a “real risk that if he is returned he will be subjected to torture, inhumane or degrading treatment”.
“Ahmad Zeidan: British Student Released from UAE Prison.” BBC News, BBC, 16 Nov. 2017, www.bbc.co.uk/news/uk-england-berkshire-42008678.