IS YOUR BUSINESS LEGALLY PROTECTED OR SIMPLY WAITING FOR ITS FIRST MAJOR DISPUTE ?
A BLOG BY GAURAV RAJ BHAGAT ADVOCATE HIGH COURT, M.P A Costly Lesson That Could Have Been Avoided Imagine a mid-sized manufacturing company supplying industrial equipment across India. Business was growing rapidly, and to keep pace with demand, the company entered into a long-term supply arrangement with one of its largest vendors. Confident in their business relationship, the parties signed an agreement that included an arbitration clause copied from an old contract without obtaining any legal review. For the first few months, everything went smoothly. Then the vendor defaulted on payments amounting to several crores of rupees. Despite repeated reminders, the dues remained unpaid. Left with no alternative, the company decided to invoke arbitration. Only then did the management discover a serious defect in the agreement. The arbitration clause stated that, in the event of a dispute, the vendor alone would appoint the sole arbitrator. Believing that the clause was valid, th...