Banned Chinese firm Club Factory may take ‘Force Majeure’ route

Club Factory plans to invoke force majeure to counter Indian companies and vendors that have approached the courts to recover dues from the banned Chinese e-commerce company. Club Factory is citing India’s decision in June to block several Chinese apps as a situation that was beyond its control, according to a former senior company executive.

The Chinese company has hired law firm Khaitan & Co.

BPO companies Cyfuture and Aegis, which had provided customer-care support to Club Factory, have filed separate cases against the company in the Delhi High Court to recover a combined Rs 5 crore.

Other Indian companies and vendors are struggling to find a representative or office contacts for the Chinese company to recover their dues. “For some months, Club Factory just kept saying they are processing our payments,” said Sumit Patel of Surat-based Madeii Ecommerce, which sold watches and masks on the Chinese e-commerce site. “Now even the vendors’ log-in on the site is not working and we have no way to contact them.”

Noida-based Cyfuture sent a legal notice to Club Factory’s office in Indian cos, vendors have moved courts to recover dues from the ecomm player September, invoking an arbitration clause, and it was returned with remarks that the company had “left” India, according to legal documents.

“Most of the officials of the respondent company have left the country and are proactively looking to evade any liability from its service providers,” lawyers for Cyfuture said in court documents, according to a Delhi High Court order on March 17 while issuing notices to Futuretimes Technology India, the company that operated Club Factory in India. Pankaj Bhagat, the lawyer for Cyfuture and Aegis, declined to comment. Khaitan & Co. declined to comment.

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Club Factory did not respond to a query seeking comment. Months before the ban, Club Factory reported that it had surpassed 100 million monthly active users in India.

India blocked 59 Chinese apps including TikTok, WeChat and UCBrowser after a clash in the Himalayan heights of Ladakh that left 20 Indian soldiers dead in June.



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