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Case Study
Legal Representation in a Real Estate Partnership and Franchise Dispute Exceeding SAR 7 Million in Al Jubail
Dispute Value
SAR 7 million
Quick Matter Overview
Value of the Company’s Business Activities
More than SAR 7,000,000
Investment Location
Al Jubail, Saudi Arabia
Nature of the Relationship
Partnership, mudarabah, and commercial franchise
Project Activity
Provision of coffee and hot beverage services
Subject of the Legal Work
Protection of real estate assets and investment rights
Authorities and Courts Involved
Ministry of Commerce, Commercial Court, and Public Prosecution
Background of the Investment Relationship
The matter concerned an investment relationship involving partnership, mudarabah, and commercial franchise arrangements for a coffee and hot beverage business in Al Jubail, with business activities exceeding SAR 7 million.
The relationship involved investment agreements governing the parties’ commercial, financial, operational, and real estate rights. Legal issues arose regarding protection of the real estate assets, compliance with the agreements, and the impact of potential breaches on ownership, project continuity, and the client’s legal position.
The client engaged Atyar Advocates and Legal Consultants to provide legal advice, prepare a comprehensive legal study, draft pleadings and legal memoranda, and represent the client before the Ministry of Commerce, the Commercial Court, and the Public Prosecution.
Business Value
Relationship Subject
Investment & Partnership
Business Location
Al Jubail
Nature of the Project
Coffee and hot beverage outlets
Nature of the Investment Relationship and Dispute
The legal work focused on protecting the real estate assets and rights arising from the investment agreements connected with the commercial franchise project and determining each party’s position within the partnership and mudarabah relationship.
The principal legal matters included:
- Reviewing the partnership and mudarabah agreement.
- Reviewing the commercial franchise agreement and its schedules.
- Identifying the parties’ contributions and rights.
- Examining ownership of the real estate assets connected with the project.
- Analysing the investment agreements governing those assets.
- Determining management and disposal authority.
- Reviewing payments and financial contributions.
- Assessing the parties’ operational and commercial obligations.
- Analysing the alleged breaches and disputed acts.
- Evaluating their effect on the client’s rights.
- Preparing pleadings and legal memoranda.
- Representing the client before the competent authorities.
Essential Elements of the Contractual Relationship
Partnership and Mudarabah Agreement
Identifying the parties’ contributions, management authority, decision-making procedures, allocation of profits and losses, and responsibility for the project’s obligations.
Commercial Franchise Agreement
Reviewing the rights relating to use of the brand and operating model, franchise fees, quality standards, franchise term, and default and termination provisions.
Real Estate Assets
Identifying the assets connected with the project, their title documents, rights of use, and any restrictions affecting their management or disposal.
Investment Agreements
Analysing the agreements governing the investment and protection of the assets and defining the rights and obligations of each party.
Management and Operations
Assessing management authority, operational responsibilities, use of funds and assets, and compliance with the agreed investment purpose.
Disputes and Representation
Identifying the claims and defences, preparing the legal file, and representing the client before the competent administrative, judicial, and prosecutorial authorities.
Key Legal Challenges
Interaction Between Multiple Contractual Relationships
The project involved partnership, mudarabah, commercial franchise, and real estate investment agreements. It was therefore necessary to identify the agreement governing each right and obligation and assess whether a breach of one agreement affected the remaining contractual relationships.
Determining Ownership of the Assets and Associated Rights
The matter required identification of the real estate assets connected with the project, the legal owner of each asset, and the nature of any rights granted to the other parties. It was essential to distinguish ownership of an asset from rights of use and from rights arising through its investment or use within the project.
Protecting the Assets from Unauthorised Transactions
The file required assessment of each party’s authority to manage, use, dispose of, or create obligations affecting the real estate assets. It was also necessary to determine the appropriate legal measures where a transaction exceeded the authority granted under the relevant agreements or affected the client’s rights.
Multiple Competent Authorities
The representation extended to the Ministry of Commerce, the Commercial Court, and the Public Prosecution, each having a different jurisdiction and procedural framework. This required a consistent overall legal position together with submissions and applications tailored to the nature of each proceeding.
Establishing the Breaches and Their Consequences
Each alleged breach had to be connected with the agreement or obligation governing it and supported by the relevant documents and correspondence. The legal team also had to demonstrate the effect of the breaches on the real estate assets, business continuity, and the client’s financial and commercial rights.
Preserving Business Continuity
The legal response needed to protect the client’s rights while considering the potential effect of the dispute on the operation of the project, the brand, and the continuing commercial relationships. The available measures were therefore assessed with the objective of protecting the assets while reducing operational and commercial risks.
Our Legal Strategy
Analysing the Contractual Structure
The partnership, mudarabah, commercial franchise, and investment agreements were reviewed to determine the nature of the parties’ relationship. This analysis identified the agreement governing each issue and clarified the rights and obligations connected with the assets.
Reviewing the Asset Documents
The title, use, contractual, and correspondence records relating to the real estate assets used in the project were examined. The objective was to establish the client’s legal position and identify any restrictions affecting management or disposal of the assets.
Identifying the Breaches and Legal Risks
The disputed acts and alleged breaches were analysed and connected with the relevant contractual obligations. Their effect on ownership of the assets, investment rights, and continuity of the business was also assessed.
Preparing the Comprehensive Legal Study
A detailed legal study was prepared addressing the agreements, assets, parties’ authority, alleged breaches, competent authorities, and available legal options. The study also assessed the principal strengths, risks, and measures required to protect the client’s rights.
Drafting Pleadings and Legal Memoranda
Pleadings, legal memoranda, defences, responses, and notices were prepared for the relevant stages of the matter. The submissions connected the facts and documents with the appropriate legal grounds and relief before each authority.
Representation Before the Competent Authorities
The legal team represented the client before the Ministry of Commerce, the Commercial Court, and the Public Prosecution and followed the related procedures within the agreed scope of engagement.
Legal Services Provided
Legal Advice
Providing advice concerning the partnership, mudarabah, commercial franchise, real estate assets, and risks arising from the investment agreements.
Comprehensive Legal Study
Preparing a detailed assessment of the agreements, asset ownership, the parties’ authority, alleged breaches, and available legal options.
Litigation
Representing the client and handling matters and disputes arising from the investment relationship before the competent authorities.
Drafting Pleadings and Legal Memoranda
Preparing pleadings, legal memoranda, defences, responses, and notices required to protect the client’s legal position.
Legal Research
Conducting legal research concerning companies, commercial franchises, investment agreements, real estate rights, and commercial and criminal procedures.
Representation Before the Competent Authorities
Representing the client before the Ministry of Commerce, the Commercial Court, and the Public Prosecution and following the related proceedings.
Legal Insight
Where a commercial franchise project is connected with partnership, mudarabah, and real estate assets, effective protection of the parties’ rights depends on clear contracts identifying ownership of each asset and the authority granted for its use or disposal.
Proof of a financial contribution or the existence of a commercial agreement is not sufficient on its own. Each right must be traced to its legal source, the agreement governing it, the authority granted to each party, and the effect of any transaction on asset ownership and business continuity.
A unified legal file also helps preserve consistency in the client’s position where several authorities are involved, while recognising the different jurisdictions of the Ministry of Commerce, the Commercial Court, and the Public Prosecution.
Legal Value Delivered to the Client
- Analysed the partnership, mudarabah, and franchise agreements.
- Identified ownership of the assets and the rights attached to them.
- Assessed management and disposal authority.
- Identified the breaches and principal legal risks.
- Prepared the required submissions and legal defences.
- Represented the client before the competent authorities.
The Firm’s Experience in Partnership and Commercial Franchise Disputes
Atyar Advocates and Legal Consultants provides specialised legal services concerning relationships combining partnership, mudarabah, and commercial franchise arrangements and the related financial, operational, and real estate rights.
The firm’s services include reviewing agreements, identifying the parties’ contributions and authority, protecting assets, assessing breaches, preparing comprehensive legal studies and research, and drafting pleadings and legal memoranda.
The firm also represents clients before administrative, judicial, and prosecutorial authorities in matters involving overlapping commercial, contractual, and real estate issues.
Legal Team Responsible for This Matter
Prof. Dr. Turki Al-Tayyar
Founder and Managing Partner, and an expert in the judiciary, legal practice, arbitration, and university education, with more than 25 years of combined experience.
Mr. Salem Saad Al-Dosari
Partner specialising in administrative contracts, investment, and litigation, with extensive experience in administrative and commercial cases.
Practice Areas Related to This Matter
- Real Estate Dispute Resolution
- Property Ownership Claims
- Litigation Before the General Courts
- Investment Disputes
- Government Contracts and Administrative Matters
- Compensation Claims
Need Legal Protection for Assets Connected with a Partnership or Commercial Franchise?
If you are involved in a partnership, mudarabah, or commercial franchise arrangement connected with real estate assets or investment rights, Atyar Advocates and Legal Consultants provides legal advice, comprehensive legal studies, research, drafting, litigation, and representation before the competent authorities throughout Saudi Arabia.
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بيانات الاتصال
- شارع التخصصي، النخيل، الرياض 12384
- 3132 شارع الأمير تركي، الكورنيش، 6309, الخبر
- Info@al-tayyar.com.sa
- 00966555398969
مجالات الممارسة
القانون التجاري والشركات
صياغة العقود والوثائق القانونية
القانون المالي والمصرفي
الضرائب والزكاة والجمارك
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