Zostel said it has won 3 year legal battle against Oravel Stays (OYO) with regards to the alleged breach of a binding agreement by latter after the acquisition of Zostel that ran budget hotel chain and OYO’s smaller rival ZO Rooms.
According to Zostel, ZO Rooms & OYO entered into talks for a merger in 2015, executing an agreement on Nov 26, 2015. While ZO Rooms completed its obligation under the agreement & transferred the business, OYO failed to transfer 7% to the ZO Room’s shareholder, which eventually led to the recently concluded Arbitration.
However, according to OYO, while the order noted that the non-binding term sheet is to be held as binding, the term sheet itself has several key elements like assets, value, etc. including commercials that were not agreed within the term sheets itself. The company said that only legal costs were awarded as damages to ZO Rooms even as “the award of specific performance of non-binding term sheet (which in itself has no agreed financials) is subjected to initiation of further proceedings and likely to get challenged.”