What was going on?
A beauty products supplier in Southeast Asia sold USD 75,000 worth of goods to a Brazilian company. The shipment, consisting of 1062 boxes, went smoothly and the Brazilian company collected the goods neatly. But the invoice was not paid. The Asian manufacturer had insured its export sales. As a policyholder, it therefore filed a claim with the insurance company for the unpaid invoice. The insurer engaged IA to investigate the matter.
How did IA Group proceed?
As a first step, the IA team investigated the debtor's situation. The Brazilian legal team collected information on the buyer: phone numbers, office and warehouse locations, business operating area and financial assets. With this information, IA contacted the buyer by phone. Initially, the debtor distrusted IA and refused to cooperate. According to the debtor, IA had no authorisation to discuss the debt with the Asian supplier. After explaining IA's role and its intention to help all parties find an out-of-court solution, IA managed to convince the buyer. IA then scheduled a virtual meeting with the buyer to discuss the order and non-payment. It soon became clear where the problem lay: the buyer had forwarded the goods to another company (the final buyer), which had experienced quality problems with some beauty products. As a result, the final customer refused to pay the buyer, which in turn prevented the buyer from paying the Asian supplier.
Physical meeting
Within weeks, the IA team managed to organise a physical meeting in the interior of Brazilian São Paulo, where the end-customer's company was located. IA led this meeting between the debtor's owner, the Asian manufacturer and the end-customer to inspect the goods. The inspection revealed that 160 of the 1062 boxes shipped had quality problems, as indicated by the end-customer. However, the end customer also acknowledged that 85% of the goods received had no problems and were already being sold and generating revenue. After commissioning an independent quality report, the end-customer, partly through IA's mediation, agreed to an amicable settlement. The supplier and our client, the insurance company, were willing to give the buyer a USD 10,000 discount because of the 160 damaged boxes and the good cooperation during IA's investigation. The end customer, and subsequently the buyer, decided to pay for the remaining goods.
The scheme
IA's legal team drafted a binding 'debt confirmation and repayment agreement', which set out the discount granted and the terms for payment of the remaining amount. The agreement was fully complied with and IA was able to successfully close the case.
The value of a local presence, understanding the debtor, initiating meetings with all parties involved, negotiation and effective communication all came together in IA's approach to resolving this case. The team managed to settle this matter out of court within less than a year, avoiding costly legal proceedings.
