Oyo moves Delhi High Court against arbitral award in lease dispute with Lenskart

Oyo Hotels and Homes Pvt Ltd has moved a plea before the Delhi High Court challenging portions of an arbitral award passed in a dispute with Lenskart Solutions Pvt Ltd. on the termination of a coworking space lease during the COVID-19 pandemic [Oyo Hotels and Homes Pvt Limited Vs Lenskart Solutions].

The matter came up on Tuesday before Justice Amit Bansal, who issued notice and sought Lenskart's response to Oyo’s challenge.

While Oyo had partially succeeded in the arbitration, it has sought to set aside the findings relating to compensation for the lock-in period under the lease, the award of interest, and certain observations on stamp duty.

The dispute stems from a lease agreement dated July 30, 2019, under which Lenskart (then known as Alcott Town Planners Pvt Ltd) had 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 claimed that Lenskart took possession but, in March 2020, citing the COVID-19 pandemic, invoked the force majeure clause to stop paying Oyo rent for 15 days.

On May 24, 2020, Lenskart terminated the lease and sought a refund of ₹1.21 crore that had been paid towards the security deposit. Oyo maintained that the termination was unlawful and premature, demanding over ₹7.8 crore as rent for the unexpired lease term along with late payment charges.

The dispute was sent for arbitration, which was initiated after the Delhi High Court, in September 2021, appointed a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

The case also saw repeated extensions of the tribunal’s mandate. On December 21, 2023, Justice Sanjeev Narula extended the mandate till August 31, 2024, noting that Oyo’s evidence and cross-examination were underway. Later, on August 13, 2024, Justice Jasmeet Singh extended it further till February 28, 2025, observing that the proceedings were at the final arguments stage and involved voluminous records

In the final award, the arbitrator ruled that the pandemic did not trigger the lease’s force majeure clause, which applied only if the premises were damaged or destroyed. While this finding favoured Oyo, the tribunal curtailed its claim for lock-in period compensation and made determinations on interest and stamp duty that Oyo now seeks to overturn.

Oyo was represented by Advocates Chaitanya Kaushik, Junaid Aamir, Avinash Singh and Raghav Dutt from DMD Advocates.