Another hotelier drags Oyo to court; Madras High Court asks firm to respond by August 12

The Madras High Court directed Oyo Hotels & Homes to respond to a breach of contract case filed by Hotel Sakthi Park before its next hearing on August 12.

The hotel, which is around 100 km south of Chennai, had filed a case against Oyo in the Madras High Court on July 10 for non-payment of minimum guarantee. The case was filed under Section 9 of the Arbitration and Conciliation Act, 1996.

The hotel is now seeking relief and is requesting for a compensation of Rs 75 lakh from Oyo Hotels & Homes.

According to advocate B Raghupathy, who is representing Hotel Sakthi Park in the case, the company was in a contract with Oyo that guarantees minimum income per month for three years despite its performance. The hotel, he said, had also spent significantly in renovating the place, catering to Oyo’s standards in turn for a minimum guarantee.

G Vairava Subramanian, another lawyer representing the hotel, said the hotel entered into an agreement with Oyo in July 2019 for a three year lock-in period. While Oyo had paid six month advance rent till November 2019, the hotel did not receive payment after that.

This is not the first case filed against Oyo for breach of contract. Recent times have seen Oyo being dragged to court by multiple hoteliers in states such as Bengaluru and New Delhi.

"The matter is sub judice and hence we cannot comment. While we will defend the matter in the court, we endeavour to resolve all issues with a one on one mutual engagement," an Oyo spokesperson said in an earlier statement to Moneycontrol on July 13.