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Digital Marketing V Digital Services provider

Date of Claim raised: 15/06/2022
Date of Conciliation: 29/06/2022
Date of Settlement: 29/06/2022
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

This is a dispute between a Digital Marketing company based out of Bangalore and a Digital Services provider based out of Hyderabad. Positioned as an aggregator, the digital marketing company's (the Claimant) services were hired by the service provider (the Respondent) for providing qualified leads to one of their clients. A sample of the leads was provided, and the quality of the same was approved before the order was placed. Though the general industry practice is to raise a monthly invoice for leads provided, a quarterly invoicing system was accepted in this case, considering the fact that the promoters of both companies were acquainted.

The Issue

While the leads were delivered through a real-time digital transfer, and the same was accepted by the respondent, there seemed to be some discord with its clients, which it did not inform the claimant about. The invoice for the leads supplied was raised as agreed at the end of the quarter; however, the same was not paid for even post the agreed 15 days of time. A dispute ensued as the respondent agreed to pay only a part of the invoice claiming that their clients were unhappy and did not agree to pay the whole amount. The matter was handed over to PrivateCourt for settlement considering the relationship of both parties.

The Process

After going through all documentation of the deal, the mediator initiated a discussion. What came forth was that the respondent did not wish to take the complete onus of the failure on his part to communicate any issues with the claimant on time. With no options remaining, the mediator explained to the respondent that the claimant could also go on to press for litigation, or he could also use social media to negatively impact the brand of the respondent's company, which would damage their reputation, which would have a major detrimental impact considering the fact that they were a fairly new venture. After a few further rounds of discussions, an agreement was reached, and the respondent agreed to pay the entire amount in three instalments.

The Settlement Agreement

The Respondent agreed to settle the matter and pay the entire amount in three instalments. The following payment schedule was accepted:

  • Rs. 5,00,000/- on or before 29/06/2022
  • Rs. 50,80,866/- on or before 30/07/2022
  • Rs. 50,80,866/- on or before 30/08/2022
The Inference

At times, a third party is required to intervene in situations where relations prevent parties from pushing for their cause.