Oyo announced on Wednesday that the Delhi High Court has set aside an arbitral award in its dispute with Zostel Hospitality, ruling that it did not act in breach of an agreement following acquisition discussions with Zostel, which owns ZO Rooms.
The company said the Delhi High Court's order substantiates Oyo’s position that no part of Zostel's business was transferred to Oyo and that a determinable contract cannot be specifically enforced, in line with established precedents from the Supreme Court of India. It also dismissed Zostel's execution petition.
The dispute originated in November 2015 when OYO signed an exploratory non-binding term sheet with Zostel to potentially acquire their business. However, the transaction did not materialise due to failure of the due diligence process and lack of consensus in the deal terms documentation.
Zostel initiated arbitration proceedings almost three years later in September 2018, leading to a March 2021 arbitral award which was challenged by Oyo. The Delhi High Court dismissed Zostel's application for injunction in February 2022.
"This ruling vindicates Oyo’s position and puts to rest the contention that there was any binding, definitive agreement between the parties. The court has recognised that no definitive agreements were executed, no consensus was reached, and essential commercial aspects of the potential transaction were never finalised," the company said in a statement.
The company said the Delhi High Court's order substantiates Oyo’s position that no part of Zostel's business was transferred to Oyo and that a determinable contract cannot be specifically enforced, in line with established precedents from the Supreme Court of India. It also dismissed Zostel's execution petition.
The dispute originated in November 2015 when OYO signed an exploratory non-binding term sheet with Zostel to potentially acquire their business. However, the transaction did not materialise due to failure of the due diligence process and lack of consensus in the deal terms documentation.
Zostel initiated arbitration proceedings almost three years later in September 2018, leading to a March 2021 arbitral award which was challenged by Oyo. The Delhi High Court dismissed Zostel's application for injunction in February 2022.
"This ruling vindicates Oyo’s position and puts to rest the contention that there was any binding, definitive agreement between the parties. The court has recognised that no definitive agreements were executed, no consensus was reached, and essential commercial aspects of the potential transaction were never finalised," the company said in a statement.
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