The Delhi High Court’s ruling to deny DreamFolks’ application for an interim restraining order against Encalm Hospitality is a significant step forward in the ongoing dispute over airport lounge services. DreamFolks had sought to restrain Encalm from engaging directly or indirectly with the banks and financial institutions, contending that its 2022 agreement granted it exclusive rights. The Court noted that the contract plainly permitted non-exclusive arrangements and DreamFolks had not shown any specific contractual language prohibiting Encalm from dealing with the banks. Consequently, the Court was not convinced that the petitioner had established a prima facie case for injunctive relief.
Rather than enjoining Encalm, the Court ordered Encalm to keep comprehensive records of every communication with the banks and financial institutions to provide the arbitration tribunal with all relevant information to determine any contractual violations. The Court’s comments were limited in scope, to an interim process, and were not intended to dismiss a final determination via arbitration. This signals the judiciary’s thoughtful balancing of the need to preserve contractual rights before restrictions on business relaxations are imposed.
The decision has immediate consequences in the commercial space. DreamFolks reported that it will discontinue domestic lounge aggregation services, although its international services and other actions will continue. Banks that used to rely on DreamFolks for lounge access for their customers have begun making alternative arrangements, with some banks already having transitioned to other lounge access providers. For customers, there may be temporary interruptions in service to access lounges, which demonstrates the practical effect of the legal dispute on end users.
From a legal perspective, the case highlights the importance of clear and precise drafting in contracts with particular regard for exclusivity provisions. Uncertainty or non-exclusivity greatly reduces remedies available for relief against restrictions, and especially businesses with exclusivity provisions in contracts must clearly articulate exclusivity in contracts.
In the end, the arbitration will ultimately outline whether Encalm’s conduct disclosed breaches of its contract obligations, and whether Encalm might be entitled to remedies, if so. In the meantime, the High Court’s decision is an important precedent for the enforcement of commercial contracts, which are limited by the nature of interim relief as well as highlighting the need to be clear in agreements governing clients and competitive relationships.
- Case Name: DreamFolks Services Ltd. v. Encalm Hospitality Pvt. Ltd.
- Citation: O.M.P.(I) (COMM.) 351/2025
- Court & Bench: Delhi High Court, Single Judge Bench – Hon’ble Mr. Justice Amit Bansal
- Judgment Date: 16th September, 2025
Click HERE for full judgment
Written By: Anushka Singh
Lawcutor 