Rehemtulla Mawji
- Merchant- Abdulla & Co.
- Partners
In February 1934, when Gulamhussein Abdulla entered a partnership with Rehemtulla Mawji and Suleman Abdulla, their business was to manage “Abdulla & Co.”
But the shop, despite having a prime location in central Nairobi, did not fare well. The partnership operated at a loss in the first year, making its first month of profits in March 1935. Two months later, in May, fourteen months after the partnership had begun, Gulamhussein decided to retire. He informed his partners, Mawji and Abdulla, who agreed to buy Gulamhussein’s one-third of the partnership shares at Ksh 3,605 (or Ksh 3,000, plus profit and interest). The sale apparently went smoothly, at least according to Mawji and Abdulla.
But when Gulamhussein returned to Nairobi from a visit to India in 1936, he learned that Mawji and Abdulla had renamed the shop the “Fair Price Store.” In addition, he discovered that the partnership was doing so well that Mawji and Abdulla had ascribed a new “goodwill” value to the next buyer—a value they calculated at Ksh 5,000. This was a substantial value over what they had paid Gulam Hussein for his shares.
Learning of this new premium, Gulamhussein filed legal action. He alleged that he, too, was owed a one-third share of this goodwill—or Ksh 1,951 (i.e. goodwill plus interest). The parties agreed to an arbitration proceeding. Gulamhussein appointed arbitrator Karmali Jaffer, a “book keeper” from the Bohra community, while Rehemtulla Mawji and Suleman Abdulla appointed Rajabali Kassam Suleman Virjee, a partner from Suleiman Virjee & Sons, the same family firm 37 C.V. Naidoo vs. T.M. Tandree, 1932, UONL RAC DF, Series 1, Serial No. 539. of Madatali Suleiman Virjee (mentioned above). However, after 22 sittings—each averaging three hours—no settlement could be reached, and the case was sent back to colonial court. The umpire ruled in favor of the defendants, finding that Gulamhussein was not entitled to any goodwill because he had accepted the prior purchase of his shares and had little claim on the shop’s goodwill after investing in it for only 14 months.
MINTZ-ROTH-DISSERTATION-2019
