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OYO Approaches Delhi High Court Challenging Arbitral Award In Co-Working Space Lease Dispute Against Lenskart
Mohd Talha Hasan
13 Aug 2025 12:00 PM IST
Oyo has filed a section 34 petition before the High Court of Delhi, challenging a few portions of an arbitral award passed in the dispute between Oyo and Lenskart (“Oyo Hotels and Homes Pvt Ltd v. Lenskart Solutions”) pertaining to the termination of a co-working space lease during the COVID-19 pandemic. In the arbitral proceedings, Oyo was partially successful and has filed the...
Oyo has filed a section 34 petition before the High Court of Delhi, challenging a few portions of an arbitral award passed in the dispute between Oyo and Lenskart (“Oyo Hotels and Homes Pvt Ltd v. Lenskart Solutions”) pertaining to the termination of a co-working space lease during the COVID-19 pandemic. In the arbitral proceedings, Oyo was partially successful and has filed the Section 34 petition to set aside the arbitral tribunal's finding concerning compensation for the lock-in period under the lease agreement, the award of interest, and observations concerning the issue of stamp duty.
The dispute arises from a lease agreement dated 30.07.2019, under which Oyo had leased the first floor of Subharam Complex, MG Road, Bengaluru, to Lenskart for six years with a 36-month lock-in period.
It is the case of Oyo that Lenskart took possession of the leased property; however, in March 2020, in light of the COVID-19 pandemic, it invoked the force-majeure clause to stop paying the rent owed to OYO for 15 days. The lease was terminated by Lenskart on 24.05.2020, and a refund of ₹1.21 crore, which was paid to Oyo towards the security deposit, was sought from Oyo. However, Oyo maintained that terminating the lease agreement dated 30.07.2019 was unlawful and premature. Furthermore, Oyo demanded over ₹7.8 crores as rent for the unexpired lease term and the late payment charges.
The dispute was referred to arbitration in September 2021 after a sole arbitrator was appointed by the Delhi High Court u/s 11(6) of the A&C Act. The arbitral proceedings also witnessed multiple extensions of the tribunal's mandate.
Justice Sanjeev Narula on 21.12.2023, u/s 29(A) of the A&C Act, extended the tribunal's mandate till 31.08.2024, after observing that Oyo's evidence and cross-examination were underway. Justice Jasmeet Singh extended the tribunal's mandate until 20.02.2025 after observing that the arbitral proceedings were at the stage of final arguments and involved voluminous records.
In the impugned arbitral award, the arbitrator observed that the COVID-19 pandemic did not trigger the lease's force-majeure clause, which only applies if the premises were damaged or destroyed. Furthermore, the tribunal restricted Oyo's claim concerning the compensation for the lock-in period. The tribunal further made observations on interest and stamp duty that Oyo now seeks to set aside by the Section 34 Court.