Indians Led Singapore-based Startup Zilingo Faces Arbitration at SIAC

Zilingo Pte Ltd, led by young Indian entrepreneurs who managed huge global funding early this year, is being brought to Arbitration table by a Bangkok based company for breach of contract & non-payment of unpaid bills.

An Arbitration process is on the anvil 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.

According to sources, Singapore headquartered Zilingo Pte Ltd. is a technology and commerce platform led by young Indian entrepreneurs - Ankiti Bose and Dhruv Kapoor - who managed huge global funding early this year. This company is being brought to Arbitration table by a Bangkok based company (sourcing partner) for Breach of Contract and holding of due payments. The sourcing partner after initiating legal action has approached for arbitration to settle the financial dispute at SIAC.

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.

Ankiti Bose, Director, Zilingo Pte ltd, often dubbed as a ‘unicorn in making’ in international startup circles, received a lot of funding from lender giants like Siquoua and Temasek. The company earlier this year raised USD 226 million from investors including Sequoia Capital and Temasek Holdings Pte and is now valuing about USD 950 million.

The arbitration case might impact the Singapore Company’s expansion plan. The company plans to enter textile marketing with a focus on the Indian market. Ludhiana in India has been chosen as a base for sourcing materials.

Industry sources revealed 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. Partners allege that subsequently, Zilingo turned its back on its financial commitments. Facing hard times due to international trade war especially between the US and China, smaller companies find difficult to cope up with non-payment of unpaid bills. The outcome of this Arbitration may expose an unethical business module of the startup.

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. However, the Singapore based company has denied that they are liable to pay any unpaid bills to the sourcing partner.

Under the contract between the two companies, they had agreed for arbitration of any disputes arising between the parties during the currency and termination of the said agreement by a sole Arbitrator based at Singapore under the Arbitration Rules of the Singapore Arbitration Centre. The industry is keeping a close eye on the outcome of the Arbitration as it would have an impact on small businesses in the times global economic slowdown.

Source ~ Newsvoir

India To Have Its First International Arbitration Centre In Mumbai

India's business capital Mumbai is planning to have its own international arbitration centre to resolve business conflicts instead of going courts and save time and money.

Arbitration is a process whereby the parties to the dispute appoint a third impartial person, called an arbitrator, before whom they present their claims and settle the dispute. By so appointing an arbitrator all by themselves, they agree to be bound by the decision of the arbitrator and this decision (called the "award") can be enforceable in the court of law. Thus, by doing so, money and time of the parties are saved. Unending litigation at courts can b avoided by doing so.

The upcoming arbitration centre at Mumbai will offer a range of arbitrary services to the business community across the world. At present, most disputes go to Singapore' SIAC (Singapore International Arbitration Centre) for arbitration. Mumbai centre will create great opportunities, as Mumbai already has a presence of global CEOs.

Also, just like every other organization doing business, startups too get to deal with many people - employees, consultants, contractors, designers, suppliers, marketers, distributors - the list is endless.

If things work out, the planned Mumbai arbitration centre would be India's first such centre. The development is significant as the government is also establishing an international finance services Centre in Mumbai. Arbitration is a less formal procedure than court litigation, and it is conducted in private, away from media and public glare.

Singapore's arbitration centre SIAC has been functional since 1991 as an independent non-profit organisation. Interestingly, SIAC also has a liaison office in Mumbai at One Indiabulls Centre since 2013.

Notably, India ranks second in the number of cross-border disputes reaching the SIAC, a jump from the third place in 2013. And thus, the upcoming Mumbai International Arbitration Centre is a much-needed step from Maharashtra government.

Two parties having no connection with Singapore can also seek arbitration from SIAC. Hearings can also be held in their respective countries.

Singapore's Arbitration Centre is currently the leading centre for arbitration. “With the Mumbai centre, we aim to shift focus here," said Devendra Fadnavis, Chief Minister, Maharashtra.

"There is a rise in intellectual property rights and international legal cases. An arbitration centre will help in creating a workforce to handle such cases," he added.