High Court restrains association of hoteliers from boycotting OYO

New Delhi: The Delhi High Court has restrained various hoteliers' welfare associations from issuing any notices or boycotting and banning hospitality company OYO. The court, in an interim order, said it appeared that the act of hotelier associations was pushing other hoteliers and service providers to act in breach of contract between them and Oravel Stays Private Limited, which operates under the name of OYO.

The court noted that OYO has an appropriate agreement with other hoteliers and service providers and the associations act of calling for boycotting the company prima facie would be illegal. "The plaintiff (OYO) has made out a prima facie case. The defendants (Hotelier Welfare Associations) are restrained from issuing notices or calling to hoteliers/ service providers seeking boycott or ban of the plaintiff in any manner whatsoever till further orders.

The defendants will also not press any such notice that may have been already issued," Justice Jayant Nath said in the interim order. OYO approached the court seeking an ex-parte injunction to restrain the association and its members from giving effect to any "threats" advanced through its undated notice and as mentioned in news articles.

It also sought to restrain the association from boycotting or banning the company in any manner by "lobbying and colluding with one another" during pendency of the suit. The court said a perusal of the notice allegedly issued by the association showed that it has given a call to all hotels to support nationwide protest against OYO by boycotting and blocking OYO rooms from June 20. It issued notice to the associations on the suit and listed the matter for further hearing on August 5.

OYO submitted before the court that it is a hospitality company and in the business of standardising unbranded budget hotels, bed and breakfast and guest houses as per its specifications through online and offline channels. It said it enters into business arrangements with service providers/ hoteliers who agree to permit OYO to have full control over pricing and any booking brought in by the hotel, and give full authority to it to determine and publish room tariffs on its website and mobile application.

The suit alleged that the association has been "illegally conspiring and colluding with other similar associations... to come together and protest and coerce the plaintiff to submit to the unwarranted, illegal demands, thereby making its business halt and causing grave inconvenience/ unrest to public at large".

It also claimed OYO has more than 1.35 lakh bookings across India in the present period and this may affect the travellers. It also said that the defendants were earlier the business partners of the plaintiff and now have formed an association and have been acting against it.