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After years of legal back-and-forth, the Delhi High Court has ruled in favour of travel-tech firm OYO, setting aside an arbitral award in its long-standing dispute with Zostel Hospitality, the parent company of ZO Rooms.
The court held that OYO did not breach any agreement during the failed acquisition talks with Zostel.
The judgment backs OYO’s claim that it never took over any part of Zostel’s business. It also said that the kind of agreement they had — one that could be called off — cannot be legally enforced. The High Court also rejected Zostel’s request to carry out the earlier arbitration order.
The dispute started back in November 2015, when OYO signed a non-binding, exploratory term sheet with Zostel to potentially acquire its business. The deal, however, fell through after due diligence failed, and both sides couldn’t agree on final terms.
Zostel initiated arbitration in September 2018 — nearly three years after the talks — which resulted in a March 2021 arbitral award that OYO promptly challenged. In February 2022, the Delhi High Court had already denied Zostel’s plea for an injunction.
The latest ruling firmly closes the chapter, stating that no definitive agreements were signed and no consensus was reached on essential commercial terms. “This vindicates our long-held position,” an OYO spokesperson said in a statement, reaffirming that there was no binding agreement between the parties.
However, earlier this month, the Hospitality firm reportedly postponed its planned October IPO following objections from its major investor SoftBank, which consists of a fresh issue worth Rs 7,000 crore and an Offer for Sale (OFS) of Rs 1,430 crore.
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