NCLAT upholds OYO’s INR 169 billion fine from CCI
- ByStartupStory | November 23, 2022
On Tuesday, the National Company Law Appellate Tribunal (NCLAT) blocked the Competition Commission of India’s Rs 169 crore fine against Oravel Stays Ltd. (CCI). The Oyo trademark is used by Oravel Stays Ltd. However, a two-member NCLAT bench instructed to deposit 10% of the penalty amount within six weeks while admitting the appeal filed by Oravel Stays Ltd (OSL).
“The appeal is accepted with the condition that 10% of the penalty amount be paid within six weeks as a deposit. The deposit must be made in the form of an FDR payable to the Registrar, NCLAT, “the command read. The subject is to be listed for the next hearing on April 11, 2023, according to the appeal tribunal. The NCLAT noted that “in the meanwhile, Counsel for the parties are permitted liberty to submit pleadings, which must be finished before the first week of February 2023.”
OSL has also invited the Federation of Hotel and Restaurant Associations of India (FHRAI), Ibibo Group, MakeMyTrip India, Ruptub Solutions, and Casa2 Stays as parties in addition to the fair trade regulator CCI. The CCI’s orders are subject to appeal before the NCLAT. For unfair business practices, the CCI fined MakeMyTrip, Goibibo, and hospitality services provider OYO a combined total of more than Rs 392 crore last month. Make My Trip-Goibibo (MMT-Go) and OYO each received fines of Rs 168.88 crore and Rs 223.48 crore, respectively. It was claimed, among other things, that MMT-Go required pricing parity in their contracts with lodging partners.
According to such agreements, the hotel partners are not permitted to offer their rooms for sale at a lower price on the platforms of the two entities or on any other platform. The Competition Commission of India (CCI) has also ordered MMT-Go to “appropriately modify its agreements with hotels/chain hotels to remove/abandon the price and room availability parity obligations imposed by it on its hotel/chain hotel partners with respect to other OTAs (Online Travel Agencies)” in addition to imposing fines. CCI had also requested that certain exclusivity clauses be removed from contracts. In October 2019, the authority commanded a thorough investigation into the situation.
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