Consultancy found liable for $3 million tourism project failure

TDT | Manama

The Daily Tribune - www.newsofbahrain.com

Email: ashen@newsobahrain.com

A consultancy firm has found itself in legal trouble after failing to conduct a feasibility study for a $3 million tourism project in Saudi Arabia, resulting in significant losses for a Saudi national who contracted the firm.

The Minor Civil Court ruled last Monday in favour of the claimant, who testified that the firm’s inaction led not only to financial losses but also cost him his military position.

The claimant, represented by lawyer Essam Al Tayeb, entered into a contract with the consultancy on 13 May 2015, agreeing to a non-refundable fee of BD 2,500 (approximately $6,600) for a feasibility study promised within a month.

The Saudi national shared with the court how he had invested high hopes in the project, but the firm's failure turned his aspirations into a living nightmare.

Seeking to nullify the contract, he requested the return of his BD 2,500, along with BD 100 for material and moral damages and recovery of legal fees and expert costs totalling BD 400.

In reaching its verdict, the court reviewed the signed contract, documents of military service, and an expert accounting report on the consultancy.

The report confirmed that the firm had not only failed to provide the feasibility study but also had not refunded the claimant. Despite being summoned, neither the consultancy nor its representatives appeared in court.

The court highlighted the obligations of both parties under Bahraini law, noting that while the creditor must demonstrate the existence of a debt, the debtor must prove they have fulfilled their obligations.

Citing Article 140 of the Civil Code, the court stated that if one party fails to meet its obligations after a formal reminder, the other party may seek either performance or cancellation of the contract, along with justifiable compensation.

As a result, the court annulled the contract and ordered the consultancy to refund the claimant the BD 2,500, as well as cover expert fees of BD 100 and legal expenses of BD 50.

This ruling underscores the importance of accountability in contractual agreements and the potential repercussions for firms that fail to uphold their commitments.