Delhi High Court Upholds Arbitral Award Directing Zreyah To Supply Switches, Refund ₹2.84 Crore To OYO

The Delhi High Court has ruled in favour of OYO Hotels and Homes Pvt. Ltd. in a dispute over the supply of electronic switches. The Court upheld an arbitral award directing Zreyah Semiconductors Private Limited to deliver 11,000 switches to OYO and refund Rs 2.84 crore with interest. It said the arbitrator's conclusions were plausible and did not call for interference.

The case was heard by Justice Avneesh Jhingan. The court agreed with the arbitrator's reading of the contract. It refused to re-examine the evidence. “The finding recorded by the arbitrator suffers from no factual or legal error much less perversity,” the court said.

The dispute dates back to a purchase order placed by OYO in September 2019. The order covered 52,360 electronic switches valued at over Rs 10.34 crore. The companies had worked together earlier.

For this transaction, they signed a fresh vendor agreement in December 2019. Under that agreement, Zreyah had to source key components from vendors identified by OYO, assemble the switches, and supply the finished products. OYO paid 50% of the order value in advance. The switches were never delivered. Arbitration followed.

Before the High Court, Zreyah argued that it was only an assembler and not a manufacturer. It said it could not procure components without a full advance payment. OYO opposed the claim. It relied on the written vendor agreement. OYO said the agreement replaced all earlier arrangements. It also said payment was due only after delivery and acceptance of goods.

The court accepted OYO's case. It said the vendor agreement was clear on payment terms. “The only possible interpretation of the VA is that payment was to be made by the respondent to the petitioner after acceptance of the goods,” the judge observed.

The court also noted that no switches were supplied at all. In those circumstances, there was no contractual basis for demanding a full advance. Finding no patent illegality or perversity, the court dismissed Zreyah's petition and upheld the arbitral award.

For Petitioner (Zreyah Semiconductors Pvt. Ltd): Advocates Ashish Dholakia, Gautam Bajaj, Akash Panwar, Meghna Jandu, Lakshay Nagpal & Ms. Saumya.

For Respondent (OYO Hotels and Homes Pvt. Ltd.): Advocates Sumant Nayak, Ankit Premchandani & Smriti Shukla