August 14, 2020

ODR Saved Sunil’s Startup Time And Money

Sunil was in the process of launching his health food startup, ‘Nu-Bites’. The company was going to manufacture and sell protein-rich snacks.

Sunil hired a marketing agency, ‘New Wave Marketing’, to design and implement an online and offline marketing campaign to generate a buzz around the product. Per their agreement Sunil was to pay New Wave a 15 lakh fee. Half the fee was paid when the agreement was signed, and the balance had to be paid once a set of performance-related targets were met. The agreement was structured in this manner based on the guarantees that New Wave gave Sunil about their ability to make the marketing campaign a success.

New Wave designed and ran the campaign as per the agreement. However, while the campaign was successful, a few relatively minor performance targets were not met. When New-Wave requested the balance fee, Sunil refused to pay as all the targets were not met.

As New Wave felt that they ought to be paid at least part of the balance fee, they decided to take legal action against Sunil. New Wave’s lawyer suggested that, before going to court, they try Online Dispute Resolution.

New Wave registered a dispute on an ODR Platform and the Platform sent Sunil a notice. Sunil, not wanting to be dragged into long and expensive litigation, agreed to ODR. An arbitrator was appointed and, eventually, Sunil agreed to pay New Wave 5 lakhs. The case was settled amicably and Sunil even hired New Wave for his startup’s next marketing campaign.

Disclaimer: All characters and names are fictional. This is a public interest story, produced by House Court, an online arbitration platform