Mcdon­ald’s says will not set­tle out of court with Bak­shi over fran­chise is­sue

Mint ST - - CORPORATE - BY HARVEEN AH­LUWALIA harveen.a@livemint.com NEW DELHI

Mcdon­ald’s In­dia Pvt. Ltd (MIPL), the In­dian sub­sidiary of the Amer­i­can fast food chain, has told the Na­tional Com­pany Law Ap­pel­late Tri­bunal (NCLAT) that it does not want an outof-court set­tle­ment with es­tranged fran­chise part­ner Vikram Bak­shi.

MIPL’S stand was taken on record by NCLAT, which had, on 25 Au­gust, asked both par­ties to try and set­tle the dis­putes that had led to the es­trange­ment and keep the 169 Mcdon­ald’s out­lets they op­er­ate in north and east In­dia open and run­ning while the talks are on.

“We in­formed NCLAT to­day that we wish to pro­ceed with the ap­peal,” said Barry Sum, di­rec­tor, cor­po­rate re­la­tions, Asia Foun­da­tional Markets, Mcdon­ald’s Corp.

The tri­bunal is­sued no­tices to both par­ties and asked them to file their replies within a week.

“With­out go­ing into the ques­tion as to who is in de­fault, we un­der­stand that there is no chance of am­i­ca­ble set­tle­ment,” said NCLAT chair­per­son S. J. Mukhopad­haya dur­ing the hear­ing.

NCLAT is hear­ing two sep­a­rate ap­peals.

One was brought by Mcdon­ald’s In­dia against a Na­tional Com­pany Law Tri­bunal (NCLT) or­der of July re­in­stat­ing Bak­shi as man­ag­ing di­rec­tor of Con­naught Plaza Restau­rants Ltd (CPRL), the fran­chise arm.

Bak­shi has filed an ap­peal re­quest­ing a fair val­u­a­tion of the burger chain’s out­lets in north­ern and east­ern In­dia.

“We filed a sep­a­rate plea so that in case the two par­ties can’t reach a set­tle­ment, the NCLAT chair­man has a right to or­der a fair val­u­a­tion for one part­ner to buy the stake of another. After to­day, there is no op­tion for us but to pro­ceed with fur­ther lit­i­ga­tion. We will fig­ure out to where to get a stay or­der,” said Bak­shi.

Mcdon­ald’s In­dia, on 21 Au­gust, ter­mi­nated its fran­chise agree­ment with CPRL for all 169 out­lets, cit­ing non-pay­ment of roy­al­ties as the rea­son. CPRL is sup­posed to shut the out­lets down within 15 days of ter­mi­na­tion (by 6 Septem­ber).

In 2013, Mcdon­ald’s had voted against the re-elec­tion of Bak­shi as man­ag­ing di­rec­tor of CPRL, fol­low­ing which Bak­shi chal­lenged his re­moval at the Com­pany Law Board (now NCLT), ac­cus­ing Mcdon­ald’s of mis­man­age­ment and op­pres­sion. NCLT re­in­stated Bak­shi as the man­ag­ing di­rec­tor on 13 July and re­strained Mcdon­ald’s Corp. from in­ter­fer­ing in the func­tion­ing of CPRL.

The case will be heard next on 21 Septem­ber.

Priyanka Mit­tal con­trib­uted to this story.

AB­HI­JIT BHATLEKAR/MINT

Vikram Bak­shi, man­ag­ing di­rec­tor of Mcdon­ald’s In­dia fran­chisee CRPL.

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