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Lifescience Company V. Medical Distributor

Date of Claim raised: 22/02/2023
Date of Conciliation: 14/03/2023
Date of Settlement: 14/03/2023
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

The Claimant, a lifescience company specializing in pharmaceuticals and healthcare, entered into a business transaction with the Respondent, a medical distributor based in Lucknow. The Claimant provided pharmaceutical products to the Respondent, expecting a payment of Rs. 5,83,357/-. However, the Respondent failed to fulfil their payment obligation, leading to a dispute between the parties. As attempts to resolve the matter amicably were unsuccessful, the case was brought before PrivateCourt for settlement.

The Issue:

The core issue in this dispute revolved around the non-payment of the agreed-upon amount by the Respondent to the Claimant. The Claimant had supplied pharmaceutical products to the Respondent, and the payment was expected within a specified timeframe. However, the Respondent failed to fulfil their financial obligation, causing a breach of the business agreement.

The Claimant argued that the non-payment by the Respondent had resulted in significant financial loss and inconvenience. The Claimant had invested resources in producing and delivering the pharmaceutical products, expecting to receive the agreed-upon payment. The Claimant contended that the Respondent's failure to make the payment within the stipulated timeframe not only violated the terms of their agreement but also created financial strain for the Claimant's operations.

In addition to the non-payment of the agreed-upon amount, the following three reasons were also central to the dispute:

  • Payment Discrepancy: The first significant reason contributing to the dispute was a payment discrepancy between the Claimant and the Respondent. It became evident that there were differing interpretations of the payment terms and conditions outlined in their agreement. This discrepancy created confusion and disagreement regarding the exact amount due, the payment schedule, or any applicable discounts or deductions. The parties failed to effectively communicate and clarify these payment details, resulting in a dispute over the payment amount.
  • Delivery or Quality Issues: Delivery or quality issues related to the pharmaceutical products supplied by the Claimant to the Respondent constituted another key factor in the dispute. The Respondent raised concerns regarding the quality, effectiveness, or condition of the received products. These concerns led to a disagreement between the parties, with the Respondent refusing to make the payment until the issues were resolved to their satisfaction. The Claimant, on the other hand, disputed the validity of the Respondent's concerns or argued that any issues were beyond their control once the products were delivered.
  • Breach of Contract: A significant reason for the dispute was the alleged breach of contract by one or both parties. The Claimant and the Respondent had specific obligations outlined in their agreement, such as delivery timelines, product specifications, or payment terms. It became apparent that one or both parties failed to fulfil their contractual obligations, leading to a breach of contract. For instance, the Claimant contended that the Respondent did not adhere to the agreed-upon payment schedule, while the Respondent claimed that the Claimant did not meet the required product quality standards or delivery timelines.

On the other hand, the Respondent had various reasons for their failure to make the payment. They stated facing unexpected financial difficulties and encountering issues with their own business operations. The Respondent's defense likely included explanations and justifications for their inability to fulfill the payment obligation.

PrivateCourt Proceedings:

PrivateCourt handled the case with utmost professionalism. They initiated the process by sending a notice to both parties, requesting relevant documents and evidence to support their claims. The PrivateCourt team meticulously vetted the submissions to ensure adherence to the protocol and gathered all necessary information to make an unbiased decision. The appointed Sole Conciliator scheduled a Conciliation via Zoom and audio calls conference as per the Notice of Conciliation. However, both the Respondent and Claimant had a positive exchange and reached an amicable settlement, which they promptly informed PrivateCourt about.

The Settlement Agreement:

Following the amicable resolution between the parties, a settlement agreement was drafted. According to the agreement, the Respondent agreed to pay the settled amount of Rs. 5,83,357/- to the Claimant on or before the date of 30 April 2023. It was further stipulated that any future disputes regarding this settlement agreement would be resolved through e-arbitration, in accordance with the rules of PrivateCourt.

The Inference

This case highlights the effectiveness of alternate dispute resolution platform. Despite the initial disagreement over the non-payment, the Claimant and Respondent were able to engage in constructive discussions and reach a mutually beneficial settlement. The parties demonstrated their willingness to resolve the matter amicably, avoiding a prolonged legal battle. This case serves as a testament to the value of alternative dispute resolution methods in achieving timely and satisfactory outcomes.