Partner ordered to pay BD465,000 in unpaid capital dispute

TDT | Manama

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One company has been ordered to pay BD465,000 after walking away from its share in a million-dinar business venture, leaving its partner to carry the full cost.

The High Civil Commercial Court also imposed an annual interest rate of 2 per cent, after hearing that the two firms had agreed to start a joint business but only one paid its share of the capital.

Lawyer Shahnaz Ali said her client, the first plaintiff, and the defendant company had gone into partnership in a financial services firm, which appeared in the case as the second plaintiff.

Her client covered the entire BD1 million in initial capital, based on an agreement that the other side would pay its portion later. That did not happen.

The second defendant, who owns the first defendant company, later signed a document confirming he owed BD250,000. He pledged to repay the sum using profits, proceeds from selling part or all of the firm, or in cash.

He also accepted that the first plaintiff had taken on extra expenses beyond the capital to cover losses the business had suffered. Despite that, no payments followed.

Capital

The partners later agreed to increase the capital from BD1 million to BD5 million.

The authorised capital was set at BD4.65 million.

This step, taken in response to mounting losses, led the plaintiffs to file a legal case.

The court, citing the findings of an independent accountant, said the first plaintiff had paid BD4,150,000 into the company.

In total, the funds transferred by the plaintiff amounted to BD5,169,538.