Court Rejects Claim for BD3.5m Hotel Purchase Refund

TDT | Manama
Email : editor@newsofbahrain.com

A Gulf national's attempt to reclaim 3.5 million Bahraini dinars paid for a Manama hotel three and a half years ago has been rejected by the High Civil Court.  The buyer claimed fraud in the sale agreement, citing a subsequent violation that led to the revocation of the hotel's license.  However, the court ruled that the violation, which occurred more than three years after the sale, was the buyer's responsibility and not grounds for a refund.

The buyer alleged that the seller concealed building code violations that prevented the renewal of the hotel's license.  He claimed he had cancelled the existing commercial registration in order to obtain a new one in his name, but was unsuccessful due to the outstanding violations requiring demolition of parts of the hotel, effectively rendering it unsuitable for hotel operations.  The buyer's lawyer argued that the seller had concealed these violations.

However, the seller's attorney, Zuhair Abdullateef, presented evidence contradicting the buyer's claims.  He pointed out that the pre-sale agreement was signed on March 7, 2019, while the buyer received the tourism license for the hotel on April 5, 2019, demonstrating that the violations were not concealed at the time of purchase.  Furthermore, lawyer Abdullateef highlighted that the agreement between both parties explicitly stated that the sale included the building, improvements, furniture, fixtures, and equipment, but not the tourism license itself.  
"The buyer's attempt to obtain a new license in his name was a separate action and not related to the sale of the property," Abdullateef argued.  

The court's decision stressed that the buyer had inspected the property before the purchase, accepted its condition, and paid the full price.  "The court found no evidence of fraud or breach of contract by the seller. The fact that the buyer later failed to renew the commercial registration due to violations that occurred three and a half years after the purchase was not the seller's responsibility," the court's ruling explained, adding: "A court expert report confirmed the date of the electrical connection to the property as 2011 and the tourism license expiry date as April 5, 2023. The commercial registration was active until October 17, 2023, and its non-renewal was due to a violation issued on October 9, 2023,"  

The court ultimately dismissed the buyer's claim, stating that the buyer's allegations lacked sufficient supporting evidence.