A Delhi hospitality firmPearl Hospitality & Events has taken Oyo Hotel & Homes to court for reneging on their contract and refusing to pay the amount Oyo allegedly owes for exiting the property before the expiry of the lock-in period.
Court documents show the Delhi HC issued a notice last week to Oyo to respond to the complaint filed by Pearl Hospitality & Events, which is seeking financial compensation for the alleged breach of lock-in period terms in the contract.
In the case against Oyo, Pearl Hospitality has said it entered into a ‘Management Service Agreement’ with Oyo on September 4, 2019. “The said agreement also contained a lock-in period clause, which required the respondent, in the event of its deciding to terminate the agreement prior to the expiry of 16 months from September 12, 2019, to pay, to the petitioner (Pearl), certain amounts,” the court documents showed. Before the matter reached court, both parties had exchanged legal notices against each other.
Responding to TOI’s query, an Oyo spokesperson said, “Since the matter is sub judice, we cannot comment on the specifics. At Oyo, safety and security of guests and employees is paramount. Hence, compliance of all mandatory guidelines and licences is non-negotiable and any failure to comply invokes relevant corrective actions. We hope to amicably resolve any outstanding matters through the dispute resolution mechanisms of the honourable court.”
Pearl has said it got payments from Oyo till November and since then there has been no payment. This brings the lock-in period compensation demand from the hospitality firm as the main grievance against the SoftBank-backed firm. It is seeking compensation of over Rs 5 crore, excluding taxes.
Oyo’s legal counsel has told the court that Pearl Hospitality took the discussed property on lease from the original landlord and that the same agreement was terminated in January this year. “..there would be no question of the petitioner maintaining any claim,” Oyo’s counsel told the court, who also added that various documents such as licences, no-objection certificates were yet to be obtained from Pearl despite repeated requests. The matter has been re-notified for June 19.
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