PRO TIP when you face a Business Conflict

Choose the Right ADR Method: Different conflicts require different approaches. Whether it's mediation, arbitration, or negotiation, select the ADR method that aligns with the nature of your dispute. One size doesn’t fit all.

Private Court Symbol
The International Court of ARBITRATION


Got any

Write to us

Share this page

Private Ltd. Company V. Plastic Manufacturer

Date of Claim raised- 13/07/2021
Date of Conciliation: 27/07/2021
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement

This dispute arose between a Private Limited company that was engaged in the manufacturing of plastic products, referred to herewith as the Claimant, and a proprietary concern that was engaged in distribution referred to herewith as the Respondent. The business relations of these firms have been over a few years old, and it had been common practice for the company to supply materials on credit. Generally, there was a 30-day payment credit extended to the distributor, and on most days, these dates were met, or the claimant extended a few days. However, a consignment of products delivered on 10/05/2021 was not paid for within the stipulated time period.

The claimant had billed an amount of Rs. 63,800.80/-, which remained outstanding.

The Issue

The issue was that the Respondent, being a proprietary concern and the proprietor having run into some health issues, had a cash flow crunch and was unable to pay the dues.

This is a risk that many businesses run with small family-owned operations. Post 60 days, the claimant sought the help of PrivateCourt to settle the issue.

The Process

The negotiator, after going through all the documents submitted by both parties viz: Ledger accounts, Outstanding invoices, Email conversations, Purchase orders, and Whatsapp chats, established the claim and approached the respondent for the payment of dues. On understanding the issue and establishing that the respondent has the will to pay, the negotiator agreed on a deferred payment date.

It was also observed that the non-supply of products further by the company had almost brought the respondent's business to a halt and made things further complicated for him. The Negotiator thus asked the company to continue the relationship as it was earlier on with credit limits reduced to 15 days

The Settlement Agreement

The following terms were agreed upon for settlement:

    The Respondent has agreed to pay-
  • Rs. 15,000/- (Fifteen Thousand) on or before the 27th of August 2021
  • Rs. 15,000/- (Fifteen Thousand) on or before the 27th of September 2021
  • Rs. 15,000/- (Fifteen Thousand) on or before the 27th of October 2021
  • Rs. 18,800/- (Eighteen Thousand Eight Hundred) on or before the 27th November 2021
The Inference

This case is peculiar as this was a case where the human angle to the issue was also to be considered. It was also a long-standing and honest relationship between 2 entities that needed to be managed. The negotiator addressed both issues here through a dialogue.