diff --git a/Makefile b/Makefile
index e2fe1cfd0..f1acf9bac 100644
--- a/Makefile
+++ b/Makefile
@@ -1,7 +1,7 @@
 VERSION := $(shell echo $(shell git describe --tags) | sed 's/^v//')
 COMMIT  := $(shell git log -1 --format='%H')
 SDKCOMMIT := $(shell go list -m -u -f '{{.Version}}' github.com/cosmos/cosmos-sdk)
-GAIA_VERSION := v4.0.0
+GAIA_VERSION := v4.1.0
 AKASH_VERSION := jack/update-sdk
 WASMD_VERSION := v0.14.1
 
diff --git a/relayer/misbehaviour.go b/relayer/misbehaviour.go
new file mode 100644
index 000000000..2f8cd6a11
--- /dev/null
+++ b/relayer/misbehaviour.go
@@ -0,0 +1,87 @@
+package relayer
+
+import (
+	"encoding/hex"
+	"fmt"
+
+	sdkerrors "github.com/cosmos/cosmos-sdk/types/errors"
+	clienttypes "github.com/cosmos/cosmos-sdk/x/ibc/core/02-client/types"
+	tmclient "github.com/cosmos/cosmos-sdk/x/ibc/light-clients/07-tendermint/types"
+)
+
+var (
+	// strings for parsing events
+	updateCliTag = "update_client"
+	headerTag    = "header"
+	clientIDTag  = "client_id"
+)
+
+// checkAndSubmitMisbehaviour check headers from update_client tx events
+// against the associated light client. If the headers do not match, the emitted
+// header and a reconstructed header are used in misbehaviour submission to
+// the IBC client on the source chain.
+func checkAndSubmitMisbehaviour(src *Chain, events map[string][]string) error {
+	hdrs, ok := events[fmt.Sprintf("%s.%s", updateCliTag, headerTag)]
+	if !ok {
+		return nil
+	}
+	for i, hdr := range hdrs {
+		clientIDs := events[fmt.Sprintf("%s.%s", updateCliTag, clientIDTag)]
+		if len(clientIDs) <= i {
+			return fmt.Errorf("emitted client-ids count is less than emitted headers count")
+		}
+
+		emittedClientID := clientIDs[i]
+		if src.PathEnd.ClientID != emittedClientID {
+			continue
+		}
+
+		hdrBytes, err := hex.DecodeString(hdr)
+		if err != nil {
+			return sdkerrors.Wrapf(err, "failed decoding hexadecimal string of header with client-id: %s",
+				emittedClientID)
+		}
+
+		exportedHeader, err := clienttypes.UnmarshalHeader(src.Encoding.Marshaler, hdrBytes)
+		if err != nil {
+			return sdkerrors.Wrapf(err, "failed unmarshaling header with client-id: %s", emittedClientID)
+		}
+
+		emittedHeader, ok := exportedHeader.(*tmclient.Header)
+		if !ok {
+			return fmt.Errorf("emitted header is not tendermint type")
+		}
+
+		trustedHeader, err := src.GetLightSignedHeaderAtHeight(emittedHeader.Header.Height)
+		if err != nil {
+			return err
+		}
+
+		if IsMatchingConsensusState(emittedHeader.ConsensusState(), trustedHeader.ConsensusState()) {
+			continue
+		}
+
+		trustedHeader.TrustedValidators = emittedHeader.TrustedValidators
+		trustedHeader.TrustedHeight = emittedHeader.TrustedHeight
+
+		misbehaviour := tmclient.NewMisbehaviour(emittedClientID, emittedHeader, trustedHeader)
+		msg, err := clienttypes.NewMsgSubmitMisbehaviour(emittedClientID, misbehaviour, src.MustGetAddress())
+		if err != nil {
+			return err
+		}
+		if err := msg.ValidateBasic(); err != nil {
+			return err
+		}
+		res, success, err := src.SendMsg(msg)
+		if err != nil {
+			return err
+		}
+		if !success {
+			return fmt.Errorf("submit misbehaviour tx failed: %s", res.RawLog)
+		}
+		src.Log(fmt.Sprintf("Submitted misbehaviour for emitted header with height: %d",
+			emittedHeader.Header.Height))
+	}
+
+	return nil
+}
diff --git a/relayer/naive-strategy.go b/relayer/naive-strategy.go
index b33106154..9892ac0ba 100644
--- a/relayer/naive-strategy.go
+++ b/relayer/naive-strategy.go
@@ -232,6 +232,12 @@ func (nrs *NaiveStrategy) UnrelayedAcknowledgements(src, dst *Chain) (*RelaySequ
 
 // HandleEvents defines how the relayer will handle block and transaction events as they are emitted
 func (nrs *NaiveStrategy) HandleEvents(src, dst *Chain, events map[string][]string) {
+	// check for misbehaviour and submit if found
+	err := checkAndSubmitMisbehaviour(src, events)
+	if err != nil {
+		src.Error(err)
+	}
+
 	rlyPackets, err := relayPacketsFromEventListener(src.PathEnd, dst.PathEnd, events)
 	if len(rlyPackets) > 0 && err == nil {
 		nrs.sendTxFromEventPackets(src, dst, rlyPackets)