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Cycle Manufacturer V Sporting Goods Company

Date of Claim raised:25/08/2021
Date of Conciliation: 14/09/2021
Date of Settlement: 14/09/2021
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

The dispute here was between a Cycle manufacturer as the Claimant and a Sporting goods company as the Respondent. The claimant, though has been into manufacturing cycles for over a decade, had been into contract manufacturing for brands that white labelled his product. The claimant then ventured into making his own brand and supplied the same to a renowned sporting goods store. The cycles supplied by the claimant were top of the line and had a competitive price. Being a new entrant, the claimant supplied the materials on a 90-day credit with a rider to take back unsold goods over a period of 6 months. With his first consignment being successful, two subsequent orders were placed with a total invoice value of Rs. 1,82,000/-. With the success of the test phase, the claimant was more than happy to supply the products as required.

The Issue/Dispute/Argument/Claim/Discourse/Disagreement/Scenario

The sporting goods store, which was a large multi-brand store, refused to honour its 90-day credit deadline and also did return the goods as agreed. The explanation given while contacted by the claimant was that there was an accounting issue; hence, the payments were delayed. The news was also circulating in the industry that the respondent's company was in a possible takeover phase and was holding off payments to many creditors till there was clarity.

The Resolution

In the case being entrusted by the claimant to PrivateCourt, the mediator understood the agreed terms and looked at all documents exchanged. During the discussions that were subsequently undertaken, it was clear that the intention of the respondent was to stall the payments till the time there was clarity on the takeover bid. Once this was clear, the negotiator had to explain to the respondent that the only measure left for the claimant was to go for litigation and also publish the same on social media, which would in turn, harm the reputation of the respondent‘s company and also reduce its goodwill valuation. In the final round of negotiations, the respondent agreed to pay off the amount due with immediate effect.

The Settlement Agreement

It was agreed that the respondent would pay the total amount of Rs. 1,82,000/- via bank transfer on or before the end of December 2021, and the claimant would ensure that the issue would not be discussed in the common marketplace.

The Inference

At times, a strong professional negotiator can bend the will of parties to a fair settlement.