SC dismisses Vikram Bakshi plea against arbitration

By: | Updated: August 30, 2016 8:10 PM

The Delhi High Court, on July 21, had held that the dispute between McDonald's and Bakshi needed to be resolved through arbitration before the London Court of International Arbitration.

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The Supreme Court today dismissed an appeal filed by Vikram Bakshi, an estranged partner of McDonald’s India Pvt Ltd, against a Delhi high court order allowing the US-based fast-food major to pursue arbitration.

The Delhi High Court, on July 21, had held that the dispute between McDonald’s and Bakshi needed to be resolved through arbitration before the London Court of International Arbitration.

A bench of justices J Chelameswar and A M Sapre, while rejecting the appeal, said it was upon the arbitrator to examine whether the claims of McDonald’s were tenable or not.

The High Court had set aside the decision of a single judge bench of December 22, 2014 restraining arbitration proceedings between the two as ordered by the Company Law Board (CLB).

McDonald’s had terminated the contract of its franchise for North India to the Connaught Plaza Restaurants Private Limited, which was incorporated pursuant to the joint venture between Bakshi and the US-based fast food major.

Earlier, allowing the appeal of McDonald’s by examining the issue, the division bench had said, “there is now a mandate to refer the parties to arbitration unless the court finds that prima facie no valid arbitration agreement exists. This is clearly not the case here.”

It had said that in any eventuality, in the facts and circumstances of the case, the single judge could not have restrained the appellant from pursuing arbitration proceedings before the arbitral tribunal.

The high court had also said the finding of the single judge that the arbitration agreement in the case was incapable of performance or inoperative because of the pendency of the proceedings in the CLB, was clearly out of line.

It said while courts here have the power to injunct arbitration proceedings, they should use this power rarely.

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