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Manufacturer of chemicals V Distributor

Date of Claim raised: 02/07/2022
Date of Conciliation: 14/07/2022
Date of Settlement: 14/07/2022
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

This is a case between a manufacturer of chemicals (Claimant) and a distributor (Respondent), both based in Madhyapradesh. In this case, the dealer was a new entrant into the market and was a first-generation entrepreneur who had been in business just for under a year. The respondent had approached the claimant for a supply of materials for a rather large order worth Rs. 15,00,000/-. As this was his very first large order, the respondent could not raise the funds to pay in advance. Considering the fact that he was young and had been paying in advance for almost a year for his purchases, the claimant agreed to supply products with a partial advance. While the same was adhered to and the remaining needed to be paid 7 days post delivery of the products, the respondent could not pay the entire amount and managed to leave a deficit of Rs. 3,15,400/-.

The Issue

While the respondent had paid a 20% advance and also paid in time for the 1st few consignments, the last consignment was not paid for. The reason given was that his client, in turn, cancelled the order; hence, he could not recover the amount. When an amicable solution could not be reached, the negotiation was handed over to PrivateCourt for settlement.

The Process

After establishing the authenticity of the claim and initiating the discussion with the respondent, the mediator was clear that the respondent had the intention to pay the dues but did not have a way to sell the products that the client had cancelled well within time. Post a few rounds of discussions with both parties, what came out was that the claimant could help him get a few customers who might be interested in buying the products, provided he was willing to give some discounts. The respondent was happy to do the same, and these leads were passed on to him, and a settlement was reached.

The Settlement Agreement

The Respondent agreed to pay the dues on or before three months from the date of settlement i.e. on or before the end of October 2022.

The Inference

Proposing a win-win bargain, in many cases, can benefit all parties involved.