An Arbitration process has reached its advanced stage at Singapore International Arbitration Centre (SIAC) to settle disputes arising due to breach of contract and non-payment of unpaid bills to the tune of approximately USD 10 million between the Singapore based Startup and its sourcing partner.
Singapore headquartered Zilingo Pte Ltd is a technology and commerce platform led by Indian entrepreneurs- Ankiti Bose and DhruvKapoor- who managed huge global funding early last year. This company is being brought to Arbitration table by a Bangkok based company (sourcing partner) Misty Interactive Studio for Breach of Contract and holding of due payments.
“We have submitted all testimonials and evidences regarding breach of contract and non-payment of dues by Zilingo Pte Ltd with an arbitrator appointed by the SIAC and the proceedings have now reached advanced stage. Amid COVID crisis also SIAC has been proceeding with its predetermined schedule. We are hopeful that the arbitration would reach its final stage on schedule,” said Vijay Gupta, Director, Misty Interactive Studios.
The Arbitration had begun in December 2019 and the SIAC had given a schedule of the process to both the parties. Both the parties have put their in their respective versions at SIAC. The Arbitrator is on the job to finalise the proceedings soon.
The Singapore based Company Zilingo got a low rating from international Rating Agency Dun & Bradstreet (D&B). In its report of October 2018, the Rating Agency had pointed out two major concerns with Zilingo. On the overall assessment of the company, the D&B found potential payment concerns and based on the financial strength, the rating agency reported low ability to pay obligations.
Counsel of the Misty Interactive Studios Vivek Vidyarthi of Vidyarthi and Associates, who is representing the Arbitration process at SIAC, said that the Singapore Startup initially used its sourcing partners to show volumes of high transactions. “Eventually, it garnered a tremendous response from global funding ventures based on these high volume projections. Misty Interactive Studio in its arbitration case pleaded that subsequently, Zilingo turned its back on its financial commitments,” he added.
Facing hard times due to international trade war among top economies and now COVID-19 crisis with huge financial implications, smaller companies find difficult to cope up with non-payment of unpaid bills.
It is reliably learnt that Zilingo placed orders approximately worth USD 20 Million with the sourcing company till February 2018. Accordingly, the sourcing partners placed commensurate orders with their Chinese counterparts by paying them to the tune of approximately USD 10 Million. Unpaid for goods worth several million have already been delivered by the partner and that remains due to be paid by Zilingo against the said deliveries.
Misty Interactive Studios had also alerted the Indian government about Zilingo’s operations in India and in a letter to the Ministries of Finance, Corporate Affairs and External Affairs, Government of India has highlighted the business model of the Singpore based startup. Misty has urged the Indian government to take preventive measures to save small Indian businesses.