Sir Owen is taking legal action to retrieve money he says he loaned to the investment company - but Mr Watson disputes his claims and his lawyer revealed last night that he was taking his own legal action.
The battle over funds held by British Virgin Islands-registered company Spartan Capital dwarfs the $6 million dispute between the men over Sir Owen's stake in the Warriors rugby league club. "It's a hell of a lot more money," Sir Owen said.
Asked to confirm the Herald's information that the sum claimed to be involved ran to hundreds of millions of dollars, Sir Owen said: "Yep. That's all I can say. It's sub judice."
Sir Owen's firm Kea Investments began legal action in the Eastern Caribbean Supreme Court against Spartan - jointly owned by Kea and Mr Watson's Novatrust - on June 4.
A hearing determining the jurisdiction for future proceedings has been set down for September 23, with lawyers for Sir Owen to argue the case should be heard in Jersey, where both he and Mr Watson have interests.
Mr Watson said yesterday that he considered the matter to be private and "I am not about to get involved with a public spat".
"I can't tell you much. It's a commercial dispute. It will resolved over time in the courts or not in the courts.
"I view these things as private and confidential until they are not. I would believe and hope that Owen would work the same way."
Sir Owen will argue that Spartan should be wound up and money he claims Kea loaned to the company returned.
This follows an "irretrievable breakdown in relations between the 50 per cent shareholders", states a legal document to the court, prepared by lawyers for Kea.
The joint venture was dependent on trust and confidence between the parties that no longer exists, the document claims.
"Individuals connected with Kea on the one hand and [Novatrust] on the other have suffered a very serious breakdown in personal and business relations such as that there is no longer any trust and confidence between them," it alleges.
It further claims Sir Owen and Mr Watson were unable to agree on an annual operating budget and took a "fundamentally different view" of appropriate investments.
But Mr Watson's lawyer, Don Stanway, said they believed Sir Owen's account was fundamentally misleading. "There is presently substantial litigation proceeding in international jurisdictions including the [British Virgin Islands] and England. That litigation is being brought against persons and entities associated with Sir Owen ... ," Mr Stanway said in a statement last night.
"The damages claimed are very substantial indeed, and significantly exceed the sum that was contributed to the venture by entities associated with Sir Owen. We have been advised that since these matters are now before the courts, it is not appropriate for us to comment any further."
Sir Owen and Mr Watson are also engaged in legal proceedings in the NZ High Court over Sir Owen's 50 per cent stake in the Warriors.
In a report in today's Herald, Sir Owen says he believes Mr Watson targeted him when he became aware he had funds available for investment - a suggestion Mr Watson denies.
It was a friendship that included golfing trips and social outings on Sir Owen's superyacht Ubiquitous but quickly turned sour once the pair became entangled financially.
"[Going into business with Mr Watson] just sort of fitted in. To this day I don't know why the good Lord put us together," Sir Owen said.
Mr Watson laughed at the suggestion he targeted Sir Owen.
He said Sir Owen had pursued him because he was "super keen" to buy into a sports team as it would help to boost his profile.
