In Jersey law, it means that the case falls away and there will be no retrial.
The jury of six men and six women retired on Thursday afternoon to consider their verdict after hearing three-and-a-half days of evidence and legal argument.
After six hours and 20 minutes of deliberation over two days, the jury returned to say they had failed to reach a verdict.
Earlier, after four hours, the Deputy Bailiff, Robert MacRae, had told them that he was willing to accept a majority 10:2 verdict if they could not reach a unanimous one. However, no consensus could be reached.
Mr Dhar remained upright and unemotional when he was told he was free to go and then issued a statement through his lawyer, Advocate Olaf Blakeley.
“I am relieved this ordeal is over,” he said. “I have been in custody for over half a year and on police bail for almost the same time.
“I have lost my job and face large bills while I was kept in Jersey having to pay hotel charges.
“I am very grateful to my Advocate who has been a rock throughout this horrible ordeal.”
Pictured: Mr Dhar paid tribute to his lawyer, Advocate Olaf Blakeley, calling him a “rock”.
Mr Dhar had been accused of raping a women whom he had met the first time that evening.
The woman claimed that they had had consensual sex in his hotel apartment but this had been followed by rape, something Mr Dhar denied.