NCLAT to study London court order before decision

The National Company Law Appellate Tribunal (NCLAT) on Thursday said it would study the London Court of International Arbitration’s (LCIA’s) order, passed last week, before arriving at a decision on the ongoing dispute between McDonald’s India Pvt Ltd (MIPL) and Vikram Bakshi.

The matter will be heard on October 25, NCLAT Chairman Justice S J Mukhopadhaya said. It was important to understand whether the issue between the two joint venture (JV) partners was a case of operational mismanagement or an arbitral dispute, he added. Bakshi and MIPL have a 50:50 JV in India for the North and East regions. “We have to see if it is an operational mismanagement or arbitral dispute. The jurisdiction (of the NCLAT) would depend on that,” Justice Mukhopadhaya said.

Bakshi, the estranged MIPL partner, declined comment on the matter, saying he was awaiting the signed order.

MIPL stated it was reviewing the direction from the court.

The LCIA on September 13 had asked Bakshi to sell his stake in the JV company, Connaught Plaza Restaurants Ltd (CPRL), to the US-based fast-food chain after it upheld the latter’s position.

McDonald’s Corporation, the parent of MIPL, had moved the LCIA in December 2013 following a breakdown in ties between the two partners in July-August 2013. The LCIA matter pertained to the valuation of Bakshi’s holding in CRPL by McDonald’s, which the former had said was lower than what it actually was.

Bakshi had proposed to buy out McDonald’s stake in the 50:50 joint venture minus the brand, after he spurned the fast-food chain’s offer to buy out his stake for $7 million (~41 crore) in 2008.

He hired independent audit firm Grant Thornton to value CPRL. The audit firm arrived at a valuation of $331 million (~1,755 crore), which was rejected by McDonald’s.

On Wednesday, the National Company Law Tribunal had postponed the hearing pertaining to the show-cause notice issued to MIPL by it for contempt of court. MIPL was slated to respond to the notice, which will now be taken up on Tuesday (September 26).

NCLAT Chairman Justice S J Mukhopadhaya says the matter will be heard on October 25