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McDonald’s dispute: Bakshi mulling legal options after arbitration court order

LiveMint logoLiveMint 14-09-2017 Harveen Ahluwalia

New Delhi: Vikram Bakshi, the estranged partner of McDonald’s India Pvt. Ltd, said he is considering his legal options after the London Court of International Arbitration (LCIA) ruled that he sell his stake in Connaught Plaza Restaurants Ltd (CPRL), the McDonald’s franchise for northern and eastern India.

The London Court of International Arbitration (LCIA) on Wednesday called for the appointment of independent experts to determine a fair value of the joint venture so that the US-based fast food chain can buy out Bakshi, according to a report by the Press Trust of India.In a text message, Bakshi said that he is “carefully considering the partial award given by the tribunal, its implications as well as the legal options. We look to the rule of law to protect and safeguard theirs and our investment. We stand ready to collaborate with anyone in order to achieve a positive outcome for all stakeholders,” he said.

McDonald’s has been pursuing arbitration against Bakshi in LCIA since 2013. In 2013, the company had voted against the re-election of Bakshi as the managing director of CPRL, following which Bakshi challenged his removal in the Company Law Board (now National Company Law Tribunal or NCLT). Later in 2013, McDonald’s had revoked the joint venture agreement and invoked arbitration.

However, the National Company Law Tribunal on 13 July reinstated Bakshi as the managing director and also asked McDonald’s Corp. to refrain from interfering in the functioning of CPRL. McDonald’s challenge to the NCLT order is pending in the National Company Law Appellate Tribunal (NCLAT).

An MIPL spokesperson had said the company is pleased with the decision of the LCIA. “We are pleased with the decision in what has been a protracted legal dispute with a former partner. Our intention now is to take the appropriate steps to enforce the award, which we believe is right for the business and our customers,” the spokesperson said in an e-mailed response on 13 September.

The decision of LCIA comes in the backdrop of McDonald’s India terminating its franchise agreement with CPRL for 169 restaurants across north and east India on 21 August. According to the termination notice, Bakshi was supposed to cease using McDonald’s name, trademarks, designs, branding, operational and marketing practice and policies and food recipes and specifications from 6 September.

However, all McDonald’s outlets have continued to operate until now, except 43 restaurants in Delhi that were shut in June due to CPRL’s failure to renew the licence. The closure of the restaurants would affect 6,500 McDonald’s employees.

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