Web3 Co-Founder Seeks 400M Rupees Over NFT Project Dispute
A former Web3 co-founder is seeking 400 million Indian rupees in compensation from a business partner following the collapse of an unlaunched NFT and gaming project. The dispute, currently before the High Court in Mumbai as of September 2026, centers on whether initial capital contributions constituted equity investments or repayable loans.
The Dispute Over Capital Classification
The conflict originated from an agreement between two partners who were introduced through a mutual contact. The pair entered a 50-50 partnership for a venture that aimed to integrate non-fungible tokens with a gaming platform. According to the court filings, the project was reportedly near completion when the agreement was signed. The claimant originally invested 600,000 Indian rupees into the business.
Tensions escalated four months into the project when the claimant inquired about his return on investment. By the eight-month mark, the claimant demanded the return of his initial 600,000 rupees, plus interest. Only three weeks after that demand, the claimant filed for 400 million rupees, citing lost revenue. This figure is based on optimistic projections from an initial pitch deck. The defense, representing the other partner, maintains that these projections were merely hypothetical scenarios—”if everything goes perfectly”—rather than guaranteed financial outcomes.
Legal Ambiguity in Startup Agreements
A central issue for the High Court involves the characterization of the initial 600,000 rupee investment. The defense argues the funds were an investment, which inherently carries the risk of loss. However, legal representatives for the claimant have also referred to the sum as an “investment” in earlier filings, complicating the effort to reclassify the capital as a loan. Without a clear contractual distinction between equity and debt, the court must now determine if a repayment obligation exists.
The 50-50 partnership agreement included a mandatory arbitration clause. Despite this, the contract lacked specific provisions governing exit strategies, guaranteed returns, or detailed refund protocols. Because the project never officially launched, quantifying “lost revenue” remains a significant hurdle for the claimant. The court is currently in the process of appointing a neutral arbiter to resolve these conflicting claims.
Precedent and Risk Management for Web3 Ventures
The outcome of this litigation is expected to set a significant precedent for how courts interpret startup pitch deck projections. This case highlights the necessity for rigorous documentation during the formation of digital asset partnerships.
Market observers are monitoring the proceedings for guidance on how regulatory bodies might treat Web3, NFT, and gaming startups.