Delhi HC prevents various hoteliers associations from shunning Oyo

Delhi-High-Court

The high court of Delhi has restrained various hoteliers welfare associations from issuing any notices or boycotting and banning hospitality company OYO.

The court, in an interim order, said it appeared that the act of hotelier associations was pushing other hoteliers and service providers to act in breach of contract between them and Oravel Stays Private Limited, which operates under the name of OYO.

The court noted that OYO has an appropriate agreement with other hoteliers and service providers and the associations act of calling for boycotting the company prima facie would be illegal.

“The plaintiff (OYO) has made out a prima facie case. The defendants (Hotelier Welfare Associations) are restrained from issuing notices or calling to hoteliers/ service providers seeking boycott or ban of the plaintiff in any manner whatsoever till further orders. The defendants will also not press. Any such notice that may have been already issued,” Justice Jayant Nath said in the interim order.

The SoftBank backed hospitality chain Oyo was started by Ritesh Agarwal in 2013. The startup was started from a single hotel to over 8500 hotels at present. It is the fastest growing network of hotels, offline and online and the current evaluation is over $400 million.

At present, the company operates more than 23,000 properties with more than 850,000 rooms, making it the world’s sixth-largest lodging provider by its own measure.

OYO approached the court seeking an ex-parte injunction to restrain the association and its members from giving effect to any “threats” advanced through its undated notice and as mentioned in news articles.

It also sought to restrain the association from boycotting or banning the company in any manner by “lobbying and colluding with one another” during pendency of the suit.

The court said a perusal of the notice allegedly issued by the association showed that it has given a call to all hotels to support nationwide protest against OYO by boycotting and blocking OYO rooms from June 20.

It issued notice to the associations on the suit and listed the matter for further hearing on August 5.

OYO submitted before the court that it is a hospitality company and in the business of standardising unbranded budget hotels, bed and breakfast and guest houses as per its specifications through online and offline channels.

While, other hospitality startups, which are emerging at a fast pace in India includes  YatraFabhotelsTreeboMakeMyTripClearTrip, etc.

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