SC dismisses Zostel's appeal against Oyo

The Supreme Court on Wednesday dismissed Zostel’s petition challenging Delhi High Court’s previous ruling in its ongoing dispute with Oyo (Oravel Stays Ltd).

A bench comprising Justice Sanjay Kumar and Justice Satish Chandra Sharma dismissed Zostel’s special leave petition against the High Court order. The Delhi High Court’s ruling setting aside the Arbitration award of 2021 currently continues to operate effectively barring any rights or claim of Zostel against Oyo.

This litigation originated from a 2015 non-binding term sheet involving failed talks and negotiation for Zostel’s acquisition.


A tribunal had in 2021 issued an arbitral award in Zostel dispute; however, the Delhi High Court subsequently set aside this award, ruling that Zostel had no enforceable right or any claim over Oyo shares and further through different orders declining to restrain any of Oyo’s shareholder actions, including its proposed IPO.

The dispute traces back to 2015, when Oyo considered acquiring Zostel’s business including Zo Rooms. In November of that year, Oyo, Zostel, and Zostel’s key shareholders—Tiger Global and Orios Venture Partners—signed a non blinding term sheet outlining OYO’s proposed acquisition of Zostel’s businesses, assets, technology, intellectual property, employees, and supply network.

In return, Zostel’s shareholders were to receive up to 7% equity stake in Oyo under the closing terms of the definitive agreements which were never agreed or executed.

The Supreme court’s decision cements Oyo’s position that Zostel isn’t entitled to any claim or rights whatsoever owing to the unsuccessful negotiation in relation to the non-binding term sheet signed in 2015.