PRO TIP when you face a Business Conflict

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Furniture Manufacturing Company V Showroom Own

Date of Claim raised:05/10/2021
Date of Conciliation: 13/10/2021
Date of Settlement: 13/10/2021
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

The dispute came up between a furniture manufacturing company as the claimant and a showroom owner, both based in Mumbai. The manufacturer had supplied designer furniture to the showroom with an agreement to take back unsold goods in 90 days, and the credit period extended was the same. The total order value of the goods sold was Rs. 2,35,000/-. While the respondent made regular payments against sales to the claimant through the 90-day period, he did not pay for one of the items delivered, which was a designer dining table worth Rs. 34,600/-; the issue worsened when the return of the product also did not happen post the 90 days.

The Issue

While the deal overall went smoothly; however, one item was not paid for, which led to a dispute between parties. The argument worsened as there was no clarity given on the status of the article in question by the respondent, and it got to a point where relations went really sore. A case of fraud was about to be lodged against the respondent before which PrivateCourt was approached for a final settlement attempt.

The Process

The mediator, after establishing the claim and its authenticity, approached the respondent for a discussion. What came to the fore was that the respondent had sold the article on credit to a local politician, and he did not receive the payment as promised. However, he was reluctant to give this fact out to the claimant as there were some mutual acquaintances that he had with the party. The mediator then ensured that the details of the discussions would be private and would be communicated effectively with the respondent. The same was conveyed to the claimant, and a settlement was arrived at based on this understanding.

The Settlement Agreement

The Respondent agreed to refund part payment of Rs. 34,650/- by paying off Rs. 15,000/- immediately, i.e., on 14/10/2021, and the balance on or before 13 December 2021. Furthermore, the Respondent agreed to return the entire material on or before 21 October 20121.

The Inference

At times, a third-party negotiator who is experienced can bring about transparency and hence solutions