Arjun licensed an office from Kevin in June 2012 for 3 years. The license fee was 2 lakhs a month. Arjun also paid 10 lakhs as a refundable security deposit. The agreement did not have an arbitration clause.
Arjun paid all the monthly license fees on time. When the Agreement expired at the end of May 2015, Arjun vacated the office. Although Kevin was supposed to return the security deposit immediately, he asked for a month’s time to do so, and Arjun agreed. However, instead of returning the deposit, Kevin kept asking for more time under various pretexts.
Eventually, after Kevin had delayed returning the deposit for close to an year, Arjun sued Kevin. However, it took was another year Before Kevin appeared in court and settled the case. The time it took to resolve the case coupled with the legal fees, meant that Arjun recovered only around 5 lakhs.
If Arjun’s agreement with Kevin contained an Online Dispute Resolution (ODR) clause, he could have recovered all his money in a fraction of the time because disputes regarding non return of security deposits can be referred to arbitration.
Disclaimer: All characters and names are fictional. This is a public interest story, produced by House Court.