Delhi High Court will hear Oyo’s challenge to an arbitration award against Lenskart in a COVID-era lease dispute over office termination, focusing on compensation, interest, and contract terms.
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NEW DELHI: Oyo Hotels and Homes Pvt Ltd has approached the Delhi High Court challenging certain portions of an arbitral award passed in its dispute with Lenskart Solutions Pvt Ltd over the premature termination of a coworking space lease during the COVID-19 pandemic.
The matter was heard on Tuesday by Justice Amit Bansal, who issued notice to Lenskart and sought its response to Oyo’s plea.
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Background of the Dispute
The case arose from a lease agreement dated July 30, 2019, under which Lenskart, then known as Alcott Town Planners Pvt Ltd, leased the first floor of Subharam Complex, MG Road, Bengaluru, from Oyo for a six-year term, with a 36-month lock-in period.
Oyo claims Lenskart took possession but, in March 2020, citing the COVID-19 pandemic, invoked the force majeure clause to halt rent payments for 15 days. Subsequently, on May 24, 2020, Lenskart terminated the lease and sought a refund of Rs 1.21 crore paid as a security deposit.
Oyo, however, maintained that the termination was unlawful and premature, demanding over Rs 7.8 crore in rent for the unexpired lease term, along with late payment charges.
Arbitration Proceedings
The dispute was referred to arbitration after the Delhi High Court appointed a sole arbitrator in September 2021 under Section 11(6) of the Arbitration and Conciliation Act, 1996.
The proceedings were prolonged, with repeated extensions of the tribunal’s mandate:
- December 21, 2023: Justice Sanjeev Narula extended the mandate till August 31, 2024, noting that Oyo’s evidence and cross-examination were still underway.
- August 13, 2024: Justice Jasmeet Singh extended it further till February 28, 2025, as the matter had reached the final arguments stage and involved voluminous records.
Arbitral Award and Oyo’s Challenge
In its final award, the arbitrator found that the pandemic did not trigger the lease’s force majeure clause, which was applicable only if the premises were damaged or destroyed. This finding was in Oyo’s favour.
However, the tribunal curtailed Oyo’s claim for lock-in period compensation, made determinations on interest, and recorded certain observations on stamp duty, all of which Oyo is now challenging before the High Court.
While Oyo had partially succeeded in arbitration, its current plea seeks to set aside these unfavourable portions of the award.
Appearance:
Oyo: Advocates Chaitanya Kaushik, Junaid Aamir, Avinash Singh, and Raghav Dutt from DMD Advocates
Case Title:
Oyo Hotels and Homes Pvt Limited Vs Lenskart Solutions
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