A luxury watch company has been left out of pocket after backing out of a share agreement.

Watchfinder, which buys and sells expensive pre-owned timepieces, was found to have acted improperly when refusing a previous business partner a 5% share of the company following a trial at London’s High Court.

Judge David Waksman QC heard the business, which has sold more than £300 million of timepieces since it launched in 2002, struck a deal with business development consultancy Adoreum Partners in 2011 in a bid to win investment from luxury goods group Richemont.

Multi-billion pound company Richemont owns famous brands such as Cartier, Dunhill and Montblanc and at the time shared a director with Adoreum.

Adoreum would find clients and investors for Watchfinder and get paid a monthly retainer of up to £10,000 plus commission. The Mayfair-based company would also be entitled to 5% of shares for £150,000.

But in 2013, despite Adoreum’s best efforts, Richemont refused to invest, leading to the termination of its contract a year later.

At the time the share deal was struck, Maidstone-based Watchfinder was worth £3m but has since experienced huge growth, last year turning over £60m with pre-tax profits of £3m.

Shortly before it ceased dealings with Adoreum, Watchfinder had agreed to sell 30% of the business to two companies for just over £6m, putting its value at £20.6m and Adoreum’s share deal at just over £1m.

But last March, when Adoreum asked for its 5%, Watchfinder refused because it did not have the full consent of the board.

When pushed by Adoreum’s lawyers, managing director Stuart Hennell said the agreement was also void as Richemont had never invested.

But Judge Waksman said the company had depended too much on what it assumed was its right to veto the deal and ruled in favour of the complainants.

A Watchfinder spokesman said: “We have enjoyed working with the Adoreum team in the past and look forward to working with them again as shareholders.

"We have exciting plans for the coming year which include an expanded retail footprint in the UK and expansion into continental Europe.”