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Post Production Studio V. Entertainment Company

Claim Raised on: 08/06/2021
Conciliation Date: 25/06/2021
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement

In June of 2021, PrivateCourt was approached by a movie studio, referred to herein as the Claimant, in Mumbai, to negotiate a dispute arising out of nonpayment of an invoice by an entertainment company referred to herein as the Respondent. The claimant providing post-production and private screening of movies as one of its services was engaged by the respondent to provide movie screenings for its special audience and review panels for their upcoming release. The movie studio was also requested to hold a small after-party with food and beverages for the guests at the theatre. Three such screenings were scheduled to be held over a period of 2 weeks.

It is apparently common practice in the movie industry where a private movie theatre is hired to have small releases to audiences who have a positive impact on the marketing of the film. Also, there is no practice of any formal agreement being signed.

The Issue

While there was absolute clarity on the rentals to be paid for the screening of the movie, there remained ambiguity in the invoice amount quoted for the after-party event. Since the claimant was not in the business of catering to such after-party events, a third-party vendor was hired by the claimant to cater to the after-party request.

The claimant raised two invoices: one for the studio rentals and the other for the hospitality charges. While the studio rentals were duly accepted and paid for, a major dispute arose to settle the invoices raised for the party hosted.

Mr. Ankit Verma, the chief negotiator in this case, along with his team, assessed all communications submitted by both parties as evidence: Ledger accounts, Outstanding invoices, Email conversations, Purchase Orders, and Whatsapp chats. The team also had to closely review all the interaction material submitted as evidence that the claimant had with the third-party vendor and made a big discovery. While the disputed invoice amount for the after party was quoted as Rs. 2,68,020/- by the vendor, the team realised that the claimant was overcharged by the vendor. The claimant then got a revised invoice after pointing out this fact to the vendor.

The respondent was then approached with a corrected invoice amount of Rs. 1,00,000/- (rounded down for convenience). The respondent reacted with a bit of resistance and reluctance to accept due to his earlier experience and was unsure of the accuracy of the invoice amount.

The negotiator, owing to his experience and expertise, ironed out all doubts that were raised on the respondent's end, explained the details, and a settlement was agreed upon.

The Negotiation
    The respondent agreed to pay the outstanding amount of Rs. 1,00,000/- by bank transfer to the Claimant’s bank account in two equal instalments.
  • The first instalment of Rs. 50,000/- the very next working day dating 26/06/2021.
  • The second instalment of Rs.50,000/- in the subsequent 20 days dating to 17/07/2021.
The Inference

This case is peculiar as the negotiator also became an auditor and saved both the claimant and the respondent a large chunk of money. This also helped in holding up the reputation of the claimant and ensured continual business from his client.