The London Court of International Arbitration has asked Vikram Bakshi, the estranged partner of McDonald’s in India, to sell his stake in the joint venture firm Connaught Plaza Restaurant Ltd to the fast food chain, PTI reported on Thursday.
The arbitration panel asked Bakshi to transfer his 1,45,600 shares in the 50:50 joint venture to McDonald’s India, the report said. Connaught Plaza Restaurants Ltd based in Delhi owns and operates McDonald’s outlets in North and East India.
The ruling is in a dispute that began four years ago over the US chain dropping Bakshi as the managing director of the Connaught Plaza Restaurant Ltd. However, the verdict may have no bearing on a separate legal case being heard in India, according to The Economic Times.
The international arbitration tribunal rejected Bakshi’s claim that McDonald’s India did not validly terminate the joint venture and that the agreement remains in force and effect.
“We are pleased with the decision by the tribunal in what has been a protracted legal dispute with a former partner,” a McDonald’s spokesperson was quoted as saying by PTI. There were no immediate comments from Bakshi.
On August 21, McDonald’s India had cancelled its licence agreement with Connaught Plaza Restaurant Ltd. The fast food giant said it had been forced to end the partnership as its partner had “materially breached terms of the respective franchise agreements relating to the affected restaurants and failed to remedy the breaches”.
The joint venture between McDonald’s and CRPL first hit a roadblock when Bakshi was ousted as the managing director in 2013 after McDonald’s voted against his re-election. Bakshi challenged his removal in the tribunal and was reinstated to the post in July.
On September 7, the National Company Law Appellate Tribunal denied Bakshi’s petition filed for interim relief from the termination of the franchise agreement by McDonald’s. The tribunal will hear two appeals in the case on September 21.