Indian sellers send legal notice to Club Factory through Aiova
A group of Indian businesses selling on now-banned Chinese shopping app Club Factory have sent a legal notice to the business through online merchant association Aiova, claiming illegal conduct.
Following Chinese fashion e-tailer Club Factory’s decision to halt existing due payments to its Indian sellers after being banned in the country along with 58 other apps, sellers have sought legal aid, TNN reported. Aiova’s legal counsel, Chanakya Basa, said that Aiova has given Club Factory 48 hours to settle the payments it owes its Indian sellers and, failing that, Aiova will consider its next move.
“That your defence to continue this illegal act further by invoking force majeure...is contrary to RBI circular dated 17.3.2020 and Payments and Settlement Systems Act, 2009,” read Aiova’s notice sent to Club Factory on Thursday, accessed by TNN.
“Therefore, you are hereby called upon by my clients to settle the pending dues to the sellers within 48 hours.”
Club Factory had told its Indian sellers in its message that contracts were no longer valid between them after Club Factory invoked its force majeure clause in the contracts. Aiova claims that this is an illegal move. Basa also opined that Club Factory’s refusal to pay its Indian sellers could be a ploy to encourage the government to lift the app’s ban.
Club Factory was banned by the central government along with other Chinese apps including Tik Tok and fellow fast fashion app Shein due to national security concerns.
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