Dubai court orders Dh23m in compensation to two partners in a company
First partner allegedly denied victims their rights
Dubai: A man who contributed a capital of Dh60,000 to a Dubai-based pharmaceutical company will get Dh15.4 million in compensation, following a legal dispute after his business partner allegedly denied him his rights in the company. The court also ordered a compensation of Dh7.7 million to a third partner who was also a victim of "embezzlement" in the same case.
The Dubai Cassation Court heard that one of the victims had paid his share at the establishment of the company in 2009, but did not register his name as a partner since he was working as a government employee at that point of time.
As the partnership firm developed and expanded, the man decided to leave his job and officially join the company, along with a third partner. However, at that point of time, the first partner denied the rights of the other two partners. The two affected partners then filed a case to claim their rights.
Records revealed that the first partner allegedly registered the company under his wife’s name and denied the victims their rights, but the court took cognisance of the matter and issued a verdict, ordering the defendant to pay the first victim Dh15.4 million and Dh7.7 to the second victim, in compensation, which included a share of the company’s profits. The verdict came after it was proven that the first victim had contributed 50 per cent of the company’s capital.
According to legal adviser Mohammed Najeeb, the first victim had proved to the court that he had transferred Dh60,000 to his partner in 2009 to establish the pharmaceutical company and that the partner used to send him reports about the company’s expenses and profits, until the defendant decided to remove the victim from the company when the business started to flourish.
“In 2010, they decided to change the name and expand. The [first] partner used to provide financial reports of the company to my client through email. They kept working [together] until 2020,” Najeeb told Gulf News.
“The first partner had registered the company under his wife’s name from the very beginning and undertook measures to deny ownership rights to my client and the third partner. He [the defendant] had made himself a partner in the company, along with his wife, without the knowledge of the two other partners,” added Najeeb.
As the company flourished, the first partner then transferred the ownership of the company under his name. “He transferred the company’s funds and profits of more than Dh30,000 to his wife’s account to deny the two other partners their rights.
Reports and emails
“My client proved his partnership claims before the court by providing documents showing a bank transfer of Dh60,000 and reports and emails exchanged with the defendant for many years.”
The Dubai Court ordered the defendant to pay Dh15.4 million to the first victim and Dh7.7 million to the second victim.
The first partner appealed the verdict.
“The main condition to establish a company is proving the intention to participate in establishing a company and contribution to the capital as well as share profit and loss,” the court said in its judgement.