They set up Spartan Capital Investments, a British Virgin Islands-registered investment company that Sir Owen's interests would loan a sum he claims is in the hundreds of millions of dollars.
Watson rejects claims he targeted Sir Owen, saying Sir Owen pursued him to buy a stake in the Warriors after failing in bids to buy into other sports teams.
Both joint ventures are now the subject of court action, with Sir Owen seeking the return of his investment in both the Warriors and Spartan.
An ugly legal and PR battle that has featured claims of verbal abuse and physical threats on one side and allegations of frequent inappropriate conduct on the other can be expected to get uglier.
Once good friends, Watson and Sir Owen now communicate solely through lawyers, a situation no shortage of people with links to the pair claim to have long predicted.
"It was never going to work - two immense egos," was how an acquaintance put it.
The apparent inevitability that the relationship would end in tears begs a couple of obvious questions: how and why did they pair up in the first place?
"There are a lot of other people I would rather have ended up in bed with, I tell you," Sir Owen says.
"I was coming into the money from the sale of my global interests. I had a leaning towards doing things for New Zealand, with New Zealand, with Kiwis. I wanted to return to my country in more ways than one. I wanted to belong somewhere. Because I had travelled the world for 30 years.
"It just sort of fitted in. To this day, I don't know why the good Lord put us together."
He remembers the Caribbean golfing jaunt and throwing a party in Watson's honour, but Sir Owen's memory of their first meeting is cloudy.
"He just bumped into me somewhere. It was through a mutual acquaintance who I don't want to name. It was just a social thing. He was in London and another person I was investing with, a South African guy who was married to a Kiwi, and there were two Kiwi doctors. I invested in them."
Watson doesn't clearly remember their first meeting either, but believes the pair were doing business before Sir Owen sold his logistics empire.
And it was, he insists, a "super keen" Sir Owen who approached him about buying into the Warriors.
"Absolutely he approached me. I think he tried to buy other sports teams.
"One of the reasons, I think, was at that point of time he was very interested in the profile that comes with a sports team. He was very public about it in the early stages. He approached us very early to try to get involved in the Warriors."
With little prospect of common ground being found outside the courtroom, judges on either side of the globe appear likely to have the final say as to how the pair's affairs should be disentangled.
There are common threads in the legal action Sir Owen has taken against the Warriors and Spartan.
In both cases Sir Owen alleges he has been shut out of the businesses' operations and has had no input into key decision-making, resulting in a total loss of trust and complete breakdown of the personal and professional relationship between himself and Watson.
Watson says he considers it a private commercial dispute which might yet get resolved out of court.
Neither appears likely to come out of the messy divorce unbruised.
For his part, Sir Owen questions the basis of their friendship.
"What's this all about? What was his game plan from the beginning, one has to ask?
"He's been on my yacht, I've taken him to golf days. I thought we had a personal relationship.
"I really don't know what motivates him.
"He doesn't just want to win.
"He said to me, 'I've defeated the New Zealand Government, I've defeated insurance companies, the court system, you know, I'm top dog. I can do anything. I am the best businessman New Zealand has ever seen,' quote unquote."
Watson dismissed any suggestion Sir Owen had not been given the full picture during their business dealings and warned the Herald to be "super-careful" when considering Sir Owen's account of events.
"He doesn't do deals without doing a lot of due diligence. He is a big boy. He's had experts to help him and he hasn't gone blind into anything.
"You should ask him if our deals have been profitable. It would be interesting to see what his answer would be because you would probably find they have been very, very profitable. You can very sure, Owen being Owen, he will know exactly what is going on whenever it is going on. That is where everyone is scratching their heads."
In a dispute that is as much a public relations battle as a legal one, neither party is likely to emerge undamaged.
Sir Owen's involvement with the Warriors allegedly began with a public display at a function held to introduce him to the Warriors' family of treasured sponsors; a yacht party that involved the gifting of inappropriate items to players' wives; and an infamous blow-up at a carpark attendant at February's NRL Nines.
Sir Owen's behaviour was raised at board level, with those concerns formally raised with the club's parent company, GWNZ investments.
It was that formal complaint, Watson's camp suggest, that led to a highly charged boardroom spat between the pair the day after the Nines - the last time the men communicated directly.
Watson insists he doesn't know why the relationship has deteriorated so badly.
"It's a good question and I actually don't know the answer. It is intriguing all of us where he is going with this when we see the gyrations he is going through.
"Look, he seems to have fallen out with people across the board. I am on a list of many people he has fallen out with."
Things haven't gone as planned for Sir Owen since he cashed up his business interests. As well as the court action against Watson in NZ and the Caribbean, he is suing in California trustees of one of his trusts in an attempt to gain control of his fortune.
He employs 24 lawyers across the US, Virgin Islands, Australia, New Zealand, England and Switzerland, by his own estimate chalking up legal fees in excess of $10 million last year. "It's nothing that I've done," he says. "I'm trying to get my money back."
He has, at least, enjoyed some good fortune of late, as an avid horse-racing fan. His champion stallion Criterion won this year's Australian Derby and has already pocketed A$2,359,950 in winnings, ensuring his services will be in high demand when he eventually retires to stud.
