Oyo Takes Lenskart Back to Court Over Office Lease Dispute

Oyo Hotels and Homes Pvt Ltd has once again locked horns with Lenskart Solutions Pvt Ltd, this time in the Delhi High Court, as per news reports. The fresh legal move is aimed at challenging parts of an arbitration award arising from an early termination of a coworking space lease during the COVID-19 pandemic.

Background Of The Dispute

The disagreement stems from a lease agreement dated July 30, 2019, under which Lenskart, then operating as Alcott Town Planners Pvt Ltd, rented the first floor of Subharam Complex on MG Road, Bengaluru, from Oyo. The lease was for six years with a 36-month lock-in period.

In March 2020, shortly after the pandemic hit, Lenskart stopped paying rent for 15 days, citing force majeure. By 24 May 2020, it terminated the lease and sought a ₹1.21 crore refund of its security deposit.

Oyo's Stand

Oyo claimed the termination was both premature and unlawful. The company sought over ₹7.8 crore for the unexpired lock-in period, along with late payment charges. Oyo’s position was that the force majeure clause only applied in case of damage or destruction of the premises, not a pandemic-related disruption.

Arbitration Proceedings

A sole arbitrator was appointed in September 2021 by the Delhi High Court. After extensive hearings, the tribunal sided with Oyo on the force majeure clause, ruling that the pandemic did not meet its criteria. However, the arbitrator reduced the compensation for the lock-in period and made rulings on interest and stamp duty that Oyo disputes.

Fresh Petition In Delhi High Court

On Tuesday, the matter came before Justice Amit Bansal, who issued notice to Lenskart and sought its response. Represented by DMD Advocates, Oyo is now seeking to have the High Court set aside the award’s findings on 3 points:  the reduced compensation for the lock-in period, the award of interest, and specific observations on stamp duty.

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Conclusion

In effect, Oyo won parts of the arbitration but did not secure the full amount it was seeking. The High Court will not rehear the entire case but can alter or strike down parts of the award if legal errors or procedural lapses are found. This next phase will determine whether Oyo can recover more than what was granted in arbitration.

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