New Delhi: The Delhi High Court has disposed of a fresh petition filed by Zostel against Oyo on July 8.
The new petition was filed by the company in its long-running dispute with Oyo parent PRISM.
The matter was heard by a two judge division bench of Delhi High Court, which dismissed Zostel’s petition on Wednesday.
Manish Dhir, founder, Chestlaw, Advocates & Solicitors called it Zostel’s ‘ninth unfruitful judicial attempt.’
“It is also significant that during the recent court proceedings, Zostel’s counsel himself clarified that they do not seek to obstruct the IPO process while claiming protection of their alleged rights. Additionally, we have reviewed the reports regarding Zostel’s representation before SEBI,” said Dhir.
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“It is unfortunate that despite repeated judicial findings in favour of PRISM, attempts are being made to revive claims that have already been rejected after substantial adjudication. The Delhi High Court had earlier set aside the arbitral award in its entirety, ruling that they were against contract law and public policy,” Dhir added.
Dhir said the IPO disclosure process is governed by ‘strict’ regulatory requirements, and PRISM has made all necessary disclosures in accordance with applicable laws and regulations.
“A pending dispute, particularly one where the underlying award has been set aside, cannot be portrayed as an impediment to the IPO process. We believe that any matters pending adjudication must be resolved through the judicial process and not through parallel representations or attempts to influence regulatory proceedings. We remain confident in the strength of PRISM’s legal position and will continue to place complete reliance on the judicial and regulatory framework,” he added.
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Since 2018, Zostel has approached the Gurugram District Court, the Delhi High Court, and the Supreme Court. In May 2025, the Delhi High Court set aside the arbitral award that formed the basis of Zostel’s claims, holding that the parties’ term sheet was largely non-binding and that specific performance could not be granted in the absence of definitive agreements on essential commercial terms. Thereafter, Zostel filed an appeal under section 37 of the Arbitration and Conciliation Act, 1996 before the Division Bench of the Delhi High Court. Legal observers note that the latest move effectively opens a parallel front in a dispute that continues to be heard by the Delhi High Court.
PRISM’s IPO papers have disclosed the long running dispute. The company signed a non-binding term sheet with Zostel Hospitality Private Limited (Zostel) and certain other parties for the potential acquisition of Zostel’s business which did not materialize. Zostel contended that while it had fully complied with all obligations outlined in the above-mentioned term sheet, PRISM did not take the requisite steps to finalize the acquisition process. PRISM disputed the claims in entirety on the ground that the term sheet was non-binding and was merely ‘exploratory’ in nature and no definitive documents were executed.
