UK arbitration court tells Vikram Bakshi to sell CPRL stake to McDonald's: Sources

The London Court of International Arbitration has asked Vikram Bakshi to sell his stake in the JV firm CPRL to the US-based fast food chain, said sources.

Published: 14th September 2017 01:30 AM  |   Last Updated: 14th September 2017 01:30 AM   |  A+A-

A McDonalds outlet in New Delhi. (File photo | Associated Press)

By PTI

NEW DELHI: The London Court of International Arbitration (LCIA) has asked Vikram Bakshi, the estranged partner of McDonald's in India, to sell his stake in the JV firm CPRL to the US-based fast food chain, said sources.     

In its 2:1 majority award, the arbitration panel has asked Bakshi to transfer his 1,45,600 shares in the 50:50 joint venture Connaught Plaza Restaurant Ltd (CPRL) to McDonald's India at a fair valuation in accordance with their JV agreement, they said.     

The LCIA directed appointment of independent experts to determine fair market value for McDonald's to buy out Bakshi's stake, they added.     

The international arbitration tribunal in London has also rejected Bakshi's claim that McDonald's India did not validly terminate the JV.     

The CPRL, a JV between Vikram Bakshi and McDonald's India Pvt Ltd (MIPL), operates 169 McDonald's restaurants in north and east India. Of these, 43 outlets have been shut.     

As part of the licence termination, CPRL was asked to stop using McDonalds's name, system, trademark, designs and its associated intellectual property, among others, with effect from September 6.     

The LCIA also noted that all shares held by Bakshi are liable to be transferred and registered in McDonald's India upon payment of price determined in accordance with the methodology set out by the JV agreement, according to sources.     

The arbitrator appointed by McDonald's and the Chairman, who was selected jointly by the both parties, have ruled in favour of McDonald's India, while Bakshi's nominee had a dissenting opinion, they added.   

The LCIA has also rejected Bakshi's relief seeking a declaration that the JV agreement remains in force and effect, they said. It has also asked Bakshi to co-operate with McDonald's in obtaining all approvals under applicable law.     

Commenting on the development, a McDonald's spokesperson said: "We are pleased with the decision by the Tribunal 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."   

There were, however, no immediate comments from Bakshi.     

Bakshi is at loggerheads with McDonald's since 2013. Later, he had approached the NCLT after McDonald's removed him from the post of MD of CPRL in 2013. In July this year, the tribunal restored him to his position. It was challenged by McDonald's in the National Company Law Appellate Tribunal (NCLAT) where the appeal is pending.     

Simultaneously, Bakshi also challenged the termination of franchise licence by McDonald's at the NCLAT but was refused any interim relief. Both the appeals filed by the parties are listed for hearing on September 21.     

As part of the licence termination, CPRL was asked to stop using McDonalds's name, system, trademark, designs and its associated intellectual property, among others, with effect from September 6.

Except the 43 outlets in the national capital that were shut in June due to non-renewal of eating house licences, the remaining ones continue to operate. 

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL2018