Delhi HC Disposes Zostel’s Fresh Application in OYO Dispute; Appeal Set for August 12, 2026

The Delhi High Court has disposed of a fresh application filed by Zostel Hospitality in its ongoing dispute with Oravel Stays, the parent company of OYO, now PRISM.

A division bench of Justices Nitin Wasudeo Sambre and Amit Sharma recorded that the application was “not pressed” by Zostel in view of the court’s earlier order dated March 14, 2022. The order disposes only of the fresh application and does not decide the merits of the wider dispute.

The court directed that Zostel’s pending appeal, FAO(OS) (COMM) 124/2025, be listed for hearing on August 12, 2026.

This keeps the core legal questions alive. For readers tracking the case, the key takeaway is that the latest order is procedural: the fresh application is closed, but the appeal will still be heard.

According to a Zostel spokesperson cited in the article, OYO had accepted the binding effect of the Delhi High Court’s March 14, 2022 order.

The spokesperson said OYO reaffirmed that it would transfer 7% equity in OYO, or the equivalent value, to Zostel if Zostel succeeds in the pending appeal. Zostel described the proceedings as a reaffirmation of its continuing rights, which it said are now set to be adjudicated on merits.

The development follows Zostel’s approach to SEBI over Oravel Stays’ updated draft red herring prospectus for its proposed IPO. Zostel alleged that the filing did not adequately disclose the long-running dispute and asked the regulator to examine compliance with the SEBI Act and ICDR Regulations.

The dispute dates back to 2015, when OYO signed a non-binding term sheet to acquire Zostel’s business. In May 2025, the Delhi High Court set aside an arbitral award in Zostel’s favour, holding that the term sheet did not create enforceable rights. Oravel Stays has filed an updated draft red herring prospectus with SEBI to raise Rs 6,650 crore through a fresh issue of shares, with no offer-for-sale component.