New Delhi: Vikram Bakshi, the estranged joint venture partner of McDonald’s India Pvt. Ltd, approached the Delhi high court on Wednesday, challenging a London arbitration court award that had asked him to sell his stake in Connaught Plaza Restaurants Ltd (CPRL) to the US burger chain.
The London Court of International Arbitration (LCIA), in an award passed on 12 September, had asked Bakshi to sell his stake in CPRL, the McDonald’s franchisee for northern and eastern India. LCIA had also called for the appointment of independent experts to determine a fair value for the joint venture, so that the US-based fast-food chain could buy out Bakshi’s stake.
CPRL, a joint venture between Bakshi and McDonald’s India, operates 169 restaurants. While McDonald’s had filed an appeal in the Delhi HC to enforce the LCIA award in September, Bakshi has filed a petition challenging the award, a person familiar with the development said on condition of anonymity.
Separately, Bakshi’s counsel informed the National Company Law Appellate Tribunal (NCLAT) of the development, earlier in the day.
In light of the matters pending in Delhi high court, the tribunal adjourned related hearings to 16 November. The tribunal has been hearing two different appeals.
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 managing director of CPRL, following which Bakshi challenged his removal at the Company Law Board (now National Company Law Tribunal or NCLT). In 2013, McDonald’s revoked the joint venture agreement and invoked arbitration.
NCLT 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 India did not respond to an e-mail seeking comment.
The latest development comes in the backdrop of McDonald’s India terminating its franchise agreement with CPRL on 21 August for all 169 McDonald’s outlets in northern and eastern India, citing non-payment of royalties as the primary reason. Bakshi was supposed to shut the restaurants from 6 September.
Up until now, all McDonald’s outlets have not only continued to operate, but Bakshi has also reopened 21 out of 43 outlets in Delhi that were shut in June due to the company’s failure to renew eating house licences.