The Delhi High Court has disposed of a fresh application filed by Zostel Hospitality in its ongoing legal dispute with Oravel Stays, the parent company of OYO (now PRISM). A division bench comprising Justices Nitin Wasudeo Sambre and Amit Sharma recorded that the application was "not pressed" by Zostel in view of the court's earlier order dated March 14, 2022. The bench accordingly disposed of the application. The court also directed that Zostel's pending appeal (FAO(OS) (COMM) 124/2025) be listed for hearing on August 12, 2026. The July 8 order does not adjudicate the merits of the dispute and only records that the fresh application was not pressed while keeping the main appeal pending. In a statement, a Zostel spokesperson said OYO had accepted the binding effect of the Delhi High Court's March 14, 2022 order and reaffirmed that it would transfer 7% equity in OYO, or the equivalent value, to Zostel if it succeeds in the pending appeal. The spokesperson added that the Division Bench has listed the appeal for hearing on August 12, 2026, and described the proceedings as "a significant reaffirmation of Zostel's continuing rights", which it said are now set to be adjudicated on merits. The development comes days after Zostelapproachedthe Securities and Exchange Board of India (SEBI), alleging that Oravel Stays' updated draft red herring prospectus (UDRHP) for its proposed IPO does not adequately disclose the long-running legal dispute between the two companies. It urged the regulator to examine whether the disclosures comply with the SEBI Act and ICDR Regulations. The dispute dates back to 2015, when OYO signed a non-binding term sheet to acquire Zostel's business. In May 2025, the Delhi High Court set aside an arbitral award in Zostel's favour, holding that the term sheet did not create enforceable rights. Zostel's appeal against that judgment remains pending before the Delhi High Court. Last month, Oravel Stays filed an updated draft red herring prospectus with SEBI to raise Rs 6,650 crore through a fresh issue of shares, with no offer-for-sale component. Bareback Media has recently raised funding from a group of investors. Some of the investors may directly or indirectly be involved in a competing business or might be associated with other companies we might write about. This shall, however, not influence our reporting or coverage in any manner whatsoever. You may find a list of our investorshere.
