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Friday, July 30, 2021

Gujarat HC sends Oyo, Treebo and FabHotels back to CCI

The CCI in an order dated March 9 had ruled in favour of Treebo and FabHotels, directing MMT-Go that the two hotel chains be relisted.

Written by Sohini Ghosh | Ahmedabad |
June 15, 2021 4:35:19 am
Prohibition law challenge day 3: Arguments concluded on maintainability, order reservedThe Gujarat government on Wednesday submitted that right to privacy is not “like a bull in a china shop” and comparing state interference in controlling consumption of liquor cannot be equated to a hypothetical similar interference in individual food habits. (File photo)

In a dispute concerning an alleged nexus between online travel booking portals MakeMyTrip and GoIbibo with Oravel Stays Pvt Ltd (otherwise known as Oyo Rooms) that was allegedly skewing competition for other budget hotel franchises, a division bench of the Gujarat High Court on Monday directed Competition Commission of India (CCI) to afford Oyo Rooms an opportunity of hearing.

The Gujarat HC bench headed by Chief Justice Vikram Nath was hearing two appeals filed by two competing hotel chains — FabHotels, registered under the company name ‘Casa2 Stays Pvt. Ltd.’ and Treebo, registered as Rubtub Solutions Pvt. Ltd — and also set aside a CCI order of March this year that had ruled favourably for FabHotels and Treebo.

The two chains had been delisted from the online booking platform portals of MakeMyTrip (MMT) and GoIbibo (Go) in 2018 following which, the two hotel chains had approached CCI in 2020, with applications before the regulatory body seeking interim relief that they be relisted on the online platforms.

It was the case of both FabHotels and Treebo before the CCI that a “prima facie case” was made out that MMT-Go is a dominant entity and “has abused its dominance/ market power to…discriminate between similarly placed players in the market for franchising budget hotels in India, …deny market access to FabHotels and cause market foreclosure, and… enter into arrangements with OYO…”, further adding that a large chunk of revenue and bookings for Treebo and FabHotels came through the two online portals.

The CCI in an order dated March 9 had ruled in favour of Treebo and FabHotels, directing MMT-Go that the two hotel chains be relisted. However, while adjudicating on the applications seeking interim relief, Oyo Rooms was not made a party, was not issued any notice and was not heard.

The CCI order was soon challenged by MMT-Go before the National Company Law Appellate Tribunal (NCLAT) whereas Oyo Rooms too moved Gujarat HC in March, seeking a stay on the CCI order. It was the case of Oyo that the CCI “had interfered with the contractual commercial arrangement arrived at” between Oyo and MMT-­Go, by CCI directing MMT-­Go to list the inventories associated with Treebo and FabHotels, on MMT-­Go platforms. A single-judge court of Gujarat HC had granted interim relief to Oyo, staying the CCI order directing MMT-Go to relist Treebo and FabHotels.

On Monday, Treebo and FabHotels argued against the stay on the CCI order by the single-judge, before a division bench of the Gujarat HC. During the course of the hearing, a consensus was arrived at by Oyo, Treebo and FabHotels, that Oyo can be afforded an opportunity of hearing in the applications by Treebo and FabHotels before CCI seeking their relisting on MMT-Go platforms.

The bench in its order disposing of the matter and returning it back to CCI with specific instructions, noted, “Consensus has been arrived at between the counsels…(of Oyo, Fab Hotels and Treebo) that CCI may proceed to pass a fresh order after affording an opportunity of hearing to…Oyo… within a fixed time frame so that the issue of opportunity is also duly satisfied…”

In light of setting aside of the CCI order, the appeals against it by MMT-Go before NCLAT, now stands infructuous, as was recorded by the court.

The bench also clarified that its order directing for an opportunity of hearing to a purportedly aggrieved party, that is Oyo, “has been passed in peculiar facts and circumstances of the case and…as such it may not constitute a precedent and would remain applicable for the present case only.”


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