Chennai entrepreneurs moot incorporation of mediation clause in contracts

Entrepreneurs often resort to alternate ways to get a quick fix

TiE Chennai, a network of entrepreneurs in the city, has mooted a suggestion to incorporate mediation in all contracts across small and large enterprises, in order to make business easier.

It has also conducted a session for aspiring entrepreneurs on legal aspects of conducting business, where the do's and don'ts for start-ups with examples from the "Stayzilla affair" were deliberated upon, said the organisation.

Yogendra Vasupal, founder and CEO of online accommodation aggregator Stayzilla, was arrested and had to spend almost a month in jail, following a complaint filed by a vendor. However, according to Vasupal, cash was never a constraint in settling the dispute with the vendor- Jigsaw Advertising and Solutions. Instead, it was a matter of principle he said.

Reflecting on the issue, R Narayanan, President, TiE Chennai, said: "Entrepreneurs tend to get things done and when the judicial system fails them they find other ways and means, not all of them are fair and easy. One self- help measure, that can eventually become a movement, could be to incorporate "mediation" into all contracts across small and large enterprises."

"It is difficult enough to run a startup. Behind the glamour, there is a range of diverse issues and founders have to deal with red tape and corruption," he said while adding that there are innumerable fresh challenges that an entrepreneur has to face on a daily. The prolonged legal and judicial process end up creating "a fertile ground for terrorism and mayhem", adding to the woes of entrepreneurs.