Vikram Bakshi, the estranged partner of McDonald’s Corporation, on Monday moved the National Company Law Tribunal (NCLT) seeking to initiate contempt proceedings against the US fast food chain for terminating franchise licence agreement to run 169 outlets in the north and east India. Accusing McDonald’s of mismanagement and oppression, Bakshi also alleged interference by the US firm into the affairs of their 50:50 joint venture — Connaught Plaza Restaurant (CPRL).
A NCLT bench headed by chairman Justice M M Kumar reserved its order on both the contempt pleas and is likely to pronounce its order on Tuesday.
During the proceedings, Bakshi’s counsel Tejas Karia submitted that by terminating the agreement with CPRL, McDonald’s has violated the NCLT order of July 13, the day when it restored Bakshi as the MD of CPRL and restrained McDonald’s Corporation, the parent company of McDonald’s India (MIPL), from interfering in the functioning of CPRL.
Karia urged the bench to pronounce its order as soon as possible since it has time till just September 6 to function and operate the outlets, post which it will have to stop using McDonald’s name and trademark.
However, senior advocate Iqbal Chagla appearing on behalf of McDonald’s said that licence was terminated because of the unpaid royalty. “The American company has no role to play as the licence was granted by MIPL to whom they (CPRL) have not paid and have cancelled it,” he said, adding that it was a contractual right. CRPL is responsible for operating 169 McDonald’s outlets in North and East India. Bakshi was removed as the managing director of CPRL in August 2013 and since then McDonald’s and Bakshi have been at the loggerheads over control of CPRL.
At the National Company Law Appellate Tribunal (NCLAT), the US fast food giant had on August 30 informed the that there is no possibility of mutually settling the dispute with its estranged Indian JV partner Connaught Plaza Restaurants (CPRL) head Vikram Bakshi.