Following termination of the franchise agreement notice, which has already become effective, Bakshi moved NCLT, which dismissed his plea and asked him to seek relief from the appellate tribunal.
In the wake of the London Court of International Arbitration’s (LCIA’s) previous week’s order asking McDonald’s estranged partner Vikram Bakshi to sell his stake in Connaught Plaza Restaurants (CPRL), the National Company Law Appellate Tribunal (NCLAT) on Thursday refrained from pronouncing any order, saying it will have to study the LCIA award to proceed further in the ongoing tussle. The NCLAT bench, headed by chairperson SJ Mukhopadhaya, said it will look into the LCIA award to analyse its impact on both appeals – Bakshi’s plea seeking a stay against termination of the franchise agreement by McDonald’s and the fast food chain’s appeal challenging the National Company Law Tribunal’s (NCLT) order reinstating Bakshi as CPRL’s managing director. “We have to see whether it is an operational mismanagement or arbitral dispute. Jurisdiction will depend on that,” Mukhopadhaya said and listed the matter for hearing on October 26. If it is a case of operational mismanagement, arbitration will not be binding. If this is an arbitral dispute, the tribunal has no power to pass any order. CRPL, in which Bakshi and McDonald’s India have 50% stake each, operates 169 McDonald’s restaurants in northern and eastern India. McDonald’s terminated its franchise agreement with CPRL on August 21 alleging non-payment of royalties as the primary reason.
Following termination of the franchise agreement notice, which has already become effective, Bakshi moved NCLT, which dismissed his plea and asked him to seek relief from the appellate tribunal. Meanwhile, it is business as usual at most of the CPRL restaurants. Bakshi was ousted from his position as CPRL managing director in August 2013. However, on July 13, Bakshi was reinstated as managing director and had also asked McDonald’s Corp to refrain from interfering in the functioning of CPRL. This led McDonald’s to move NCLAT. While hearing the two pleas, the appellate tribunal on September 7 did not pass any interim order.