Leaving a conflict unresolved is like leaving a story unfinished. PrivateCourt writes the ending, transforming disputes into tales of RESOLUTION!

Private Court Symbol
The International Court of ARBITRATION


Got any

Write to us


Share this page

NBFC (Claimant) V Wellness Spa Centre Owner (Respondent)


This dispute arose when a Bangalore-based spa owner failed to repay the outstanding loan amount borrowed from an NBFC in 2019. The NBFC, in this case, the Claimant, was approached by the Wellness Spa owner to avail of a loan amounting to Rs. 3,50,000/-.

The wellness spa owner, in this case, the respondent, saw an opportunity as an entrepreneur to open a Wellness Center as a particularly alluring business option. She, the respondent and wellness spa owner, was driven by the opinion that the timing to open a wellness center was just perfect as around the nation, the acceptance and demand for such centers had expanded dramatically. She opined there was a great need for health experts who could provide their clients with high-quality, personalised services.

Because they would provide personal services, hygiene and high-quality equipment were crucial when setting up such a place. To satisfy the quality standards and client expectations, adequate cash was necessary. This required her to spend a sizeable sum on the newest, in-demand products and equipment in addition to renting or owning the space for the business.

Finding the term loan offered by the Claimant NBFC suitable for her requirements, she applied for a short-term loan thinking it would be the most suitable financing option to purchase the necessary equipment as planned out.

Having cleared the eligibility criteria of Loans: age eligibility, credit history, experience, and revenue generation plan, the respondent saw the loan amount credited to her current account in the expected timeline.

To rush and facilitate things further, the respondent included the wellness centre property as collateral. As a woman applicant, the respondent got additional benefits of discounted interest rates.

All-in-all, the Claimant NBFC sanctioned a loan of Rs. 3,50,000/- to the respondent for a term of 3 years at 14 % interest per annum.

PrivateCourt received a notice from the Claimant company requesting invocation of the Arbitration clause against the respondent to settle the dispute regarding the outstanding loan amount of Rs. 1,25,000/-.

The Facts

While all the payments were made as per the loan agreement, the respondent’s business was badly affected when two of the major pieces of equipment that were the star attraction and capital puller broke down turning out to be a revenue dropper.

The respondent’s daily walk-ins dropped drastically, appointments were canceled, and half the staff was sitting idle for days hoping for business to pick up.

The respondent failed to replace or rectify the parts of the equipment that were causing the trouble. Moreover, she got into a heated argument with the equipment manufacturer who refused to replace or refund the amount.

For the initial months, the EMIs were cleared being funded from the earnings plus some personal savings. However, due to personal reasons faced on the homefront, the last few EMIs defaulted.

In spite of receiving several reminders, payment notices, & registrations from the Claimant company, the respondent failed to fulfil the repayments resulting in the invocation of the Arbitration clause from the Claimant company.

PrivateCourt Proceedings

The case was assigned to one of the many able case managers of PrivateCourt, who plunged head-on to work on this dispute. Following the protocol, the respondent was sent a notice of arbitration.

The team got an immediate response from the respondent, who was ready to show up in person and discuss the matter.

The case manager requested copies of all the communication from both parties including all email copies, SMSs, WhatsApp reminders, Registration notices, etc. The team chartered the exact timeline after receiving the documents.

After meeting the Respondent, during the Conflict Resolution stage:
Complex tactics were brainstormed to comprehend the relevant requirements Reevaluation of the situation from a humanitarian perspective was implemented A wide range of solutions were listed.

The team explained to the respondent that she was a new entrant in the market, and it would be detrimental for her cause to not pay the Claimant, it would result in the loan being declared NPA and the seizure of the property at a future date.

As a consideration, the respondent was allowed to run the wellness centre at no extra cost that would help her clear the pending EMIs. It was also agreed that the Claimant would waive off the interest for the entire outstanding amount.

The Settlement Agreement

An agreement was drafted after three rounds of intense discussion with both parties. Per the agreement, the respondent agreed to pay the outstanding amount of Rs. 1,25,000/- in 10 equal instalments with zero interest, to be settled on or before 31st October 2022.