New Delhi, August 11, 2026: Zostel has faced another setback in its long-running legal dispute with PRISM, the parent company of OYO, after the Delhi High Court dismissed its latest application as withdrawn, observing that the plea lacked merit.
The development comes just weeks after Zostel withdrew another application before the same court, adding another twist to the ongoing dispute between the hospitality companies.
Delhi High Court Finds No Merit in Latest Application
The latest application was briefly taken up by the Delhi High Court last week, when an issue surrounding Zostel’s legal representation came before the court.
Zostel’s previous counsel informed the court that their legal fees had not been paid. At the same time, Zostel had appointed new legal counsel to represent it in the recently filed application.
Following the development, the matter was adjourned to August 10. When the application came up again, the court found no merit in the plea, following which Zostel chose to withdraw it.
The latest development follows the withdrawal of another application by Zostel on July 8, making it the second such withdrawal in just over a month.
Dispute Stems From Earlier Arbitration Proceedings
The latest court development is part of a much longer legal battle between Zostel and PRISM.
In May 2025, the Delhi High Court set aside the arbitral award that had formed the basis of Zostel’s claims against PRISM. The court held that there was no concluded agreement between the parties.
Zostel subsequently filed a Section 37 appeal against the judgment, which remains pending before the Delhi High Court.
Interestingly, Zostel’s latest filing itself acknowledges that the arbitral award had already been set aside and that the broader dispute is currently at the appellate stage.
PRISM Responds to Zostel’s Latest Plea
Reacting to the latest development, a PRISM spokesperson said that the company viewed the withdrawal as another setback for Zostel.
The spokesperson pointed to the fact that Zostel had withdrawn another application only a month earlier and also referred to the earlier statement regarding unpaid legal fees.
PRISM maintained that the applications filed by Zostel were overlapping and not maintainable. The company also reiterated that the arbitral award on which Zostel’s claims were based had been completely set aside by the Delhi High Court in May 2025.
The spokesperson added that PRISM remains confident in its legal position and will continue to rely on the judicial process as the dispute moves forward.
What Happens Next in the Zostel-PRISM Dispute?
Despite the withdrawal of the latest application, the larger legal dispute between Zostel and PRISM is not over.
Zostel’s Section 37 appeal against the May 2025 judgment remains pending before the Delhi High Court. The outcome of that appeal could therefore play an important role in determining the next stage of the long-running dispute.
For now, the withdrawal of the latest plea represents another setback for Zostel, while PRISM continues to defend the Delhi High Court’s earlier decision to set aside the arbitral award.
The case remains closely watched by India’s hospitality industry, given the history between the two companies and the potential implications of the court proceedings for their long-running business dispute.
