Struggling with Unpaid Invoices in Recruitment? Here's How Arbitration Clauses Can Help

Dear All,

In the recruitment industry, the problem of chasing payments from clients is a perennial issue. The reward for the effort, which is the essence of the recruitment industry, is taken away, and these unpaid invoices become bad debts.

This is on account of the absence of protective clauses in the recruiting agreement.

The solution for this is to include an arbitration clause. This will help the industry to have some hold on the client in recovering the dues.

The advantage of including this clause will result in a protective step being initiated in the court when there is a default without incurring heavy costs of court fees by invoking the arbitration court's help by requesting the court to issue a direction to the client pending the arbitration proceedings. This will ultimately protect the recovery process of outstanding invoices. The industry should make a beginning if the clause is already not there in their template.

With Regards,

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail: rajanassociates@eth.net

9025792684 - 9025792634

Dear All,

Sub: Typical Arbitration Clause

Arbitration, by itself, means referring the dispute between the Client and the Recruiting Agency to an Arbitral Panel instead of rushing to the Court. This saves time and money. The typical clause can be like this:

"In the event of any dispute, difference, or question arising out of or in respect of this agreement or the commission of any breach of any terms thereof, or of compensation payable thereof, or claim made by either of the parties against the other in any manner whatsoever in connection with it, the same shall be referred to a Sole Arbitrator to be selected and appointed by mutual agreement for arbitration as provided in the Arbitration and Conciliation Act 1996 and Rules framed therein. The decision or award so given by the Single Arbitrator shall be final and binding on the parties hereto. Initially, the costs of the arbitration shall be borne equally by both parties, and the award shall tax the costs of the Arbitration against the party against whom the Award is passed."

Suitable modifications can be made depending on the need. The advantage of having a sole arbitrator is to reduce costs. Please see the Arbitration and Conciliation Act 1996 for more details on the process.

With Regards,

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail: rajanassociates@eth.net

-9025792684 - 9025792634