OYO-Zo case: Plea rejected on grounds of jurisdiction

A district court in Gurgaon last week rejected an arbitration petition filed by budget hotel brand Zo Rooms against its bigger rival OYO on the grounds that it lacked jurisdiction. The development comes at a time when both the companies are entangled in a legal battle relating to the 2015 proposed acquisition of Zo Rooms by OYO. OYO recently announced that the deal has been called off.
In a statement, OYO said, “After continuously harassing the OYO management and investors, Zostel (Zo Rooms) filed a frivolous arbitration petition in the district court, Gurgaon, on February 2, 2018, as a counter to OYO’s rightful legal case...Important to note, this arbitration petition has been rejected for want of jurisdiction on February 23.”
Zo Rooms, too, said the plea has been rejected on the grounds of jurisdiction, but contested OYO’s interpretation of the same. “Zo Rooms had filed a petition seeking injunctive relief before the Gurgaon court which was declined on the grounds of lack of jurisdiction. The court did not pass any order on the merits of the case. On other hand, OYO had filed a suit for defamation before the Delhi high court and sought certain injunctions against Zo Rooms and its founders. The high court declined to pass any injunction against Zo Rooms on February 22 and posted the matter for further hearing,” Amit Kumar Mishra, partner, P&A Law Offices, said on behalf of Zo Rooms.
Last week TOI had reported about the two startups firing legal salvos against each other. Zo Rooms had filed an arbitration petition against OYO on February 2.