Citibank has sued digital wallet firm MobiKwik over an alleged non-payment of dues worth Rs 80 lakh arisen out of a reward programme both the parties have jointly carried out for customers of the US bank.
The Punjab & Haryana High Court, which heard a petition filed by Citibank, has directed the parties for arbitration and appointed retired justice Kanwal Inder as arbitrator.
The genesis of the dispute dates back to a memorandum of understanding (MoU) signed between the US bank and the domestic wallet firm in 2015. The MoU was regarding reward points to be awarded to the bank’s customers on the usage of their credit cards for topping up or recharging MobiKwik Wallet.
As per the pact, the reward points were first required to be credited to the customer’s credit card account by the bank and a percentage of the monetary value of the same was subsequently to be refunded by MobiKwik to the bank.
The bank alleged that it had performed its obligations under the MoU and marketed MobiKwik’s offer and logo through its website, outdoor hoardings and Facebook posts. The bank also claimed it credited predetermined reward points to the customers’ accounts for purchases made through credit card which could be used for recharging MobiKwik Wallet.
The bank alleged that MobiKwik failed to meet its contractual obligations and refund monetary value of reward points worth Rs 80 lakh to the bank despite repeated reminders.
According to the people aware of the dispute, MobiKwik argued that the person with whom Citibank entered into the agreement was not authorised to sign any such pact on behalf of the payment firm.
“The parties had, admittedly, entered into a contract… Whether the respondent’s (MobiKwik) official had the authority to execute the agreement or not and whether the parties acted pursuant to the agreement or not must be decided by the arbitrator,†said chief justice SJ Vazifdar in his order.
The arbitration proceedings have begun and are now underway.
When contacted, Citibank refused to comment since the matter is sub judice. Email queries sent to MobiKwik remained unanswered till the time of filing this report.
The development comes at a time when MobiKwik is in the middle of a fundraising. It is looking at raising $100-150 million. A part of this would come from Bajaj Finance which entered into an agreement with the mobile wallet firm to pick 10.83% stake in MobiKwik for Rs 225 crore ($35.4 million).