Quick Summary: Regus South Mumbai Business Centre Private Limited and Marie Gold Realtors Private Limited were in a legal fight over a failed business agreement. The court sided with Marie Gold, ordering Regus to pay for not meeting business targets.
Back in December 2010, Regus and Marie Gold signed a Management Agreement to run a business center in the Ismail Building at Hutatma Chowk, Fort, Mumbai. Regus was supposed to manage the center and give 75% of the net income to Marie Gold. Things went wrong when Regus didn't meet the income expectations.
By 2014, Regus had only achieved around 32% of the expected income. Marie Gold, unhappy with the performance, ended the agreement and took a bank guarantee of Rs. 2.25 crores. Regus claimed there were mistakes in the original business plan and wanted arbitration to fix the issues.
The arbitration decision on October 18, 2019, declared Regus had not fulfilled its responsibilities. The arbitrator, Sandeep V. Marne, ordered Regus to pay Marie Gold Rs. 10,10,01,000/- as compensation, along with interest and costs.
"The Claimant shall pay a sum of Rs. 10,10,01,000/- by way of damages for breach of its obligations under the Management Agreement."
Regus's Defense: Claimed the business plan had mistakes and argued that they only needed to try to meet the expectations, not guarantee them.
Marie Gold's Position: Argued that Regus didn't make a real effort to hit the business targets, causing financial losses.
Judge Sandeep V. Marne emphasized that while the business plan wasn't a promise, Regus had agreed to try their best to meet the targets. The court found it concerning that Regus couldn't show proof of their efforts.
The court ruled in favor of Marie Gold, ordering Regus to pay Rs. 10,10,01,000/- as damages for not fulfilling their part of the agreement.
