McDonald’s-Bakshi row: UK panel for fair valuation of JV
An international arbitration panel has directed appointment of experts to determine a fair value of the joint venture (JV) between McDonald’s India and Vikram Bakshi so that the US fast-food chain can buy out its estranged partner.
The partners had resorted to arbitration after McDonald’s in November 2013 issued a notice to terminate partnership with Bakshi for setting up and operating its popular fast-food outlets in northern and eastern India.
A three-member arbitration tribunal on September 12 directed determination of a fair market value and purchase price of share of Bakshi and Bakshi Holding in Connaught Plaza Restaurants Ltd (CPRL) for transfer to JV partner McDonald’s India Pvt Ltd (MIPL), persons familiar with the order said.
The determined value will be placed before the tribunal, which asked Bakshi to provide necessary cooperation and assistance in such determination, they said.
McDonald’s appointed London-based judge Ian Hunter on the panel while Bakshi had appointed Justice Vikramajit Sen. Albert Jan Van Den Berg was the chairman of the tribunal.
Sen did not sign the award, the persons said, adding that the two-one majority award asked Bakshi and the holding firm not to exercise any voting rights in the 145,600 shares held by them in CPRL.
The international arbitration tribunal in London has also rejected Bakshi’s claim that McDonald’s India did not validly terminate the JV.
Bakshi said that his side was looking into the “partial award” given by the international arbitration. He said: “We are carefully considering the partial award given by the tribunal, its implications as well as our legal options.”
Stressing that his side would “look to the rule of law to protect investment” of various parties involved in the fast-food chain business, Bakshi also said his side was ready “to collaborate with anyone in order to achieve a positive outcome for all stakeholders”.
CPRL operates 169 McDonald’s restaurants in north and east India. Of these, 43 outlets operating in Delhi are shut due to non-renewal of eating house licences.
As part of the licence termination, CPRL was asked to stop using McDonald’s name, system, trademark, designs and its associated intellectual property, among others, with effect from September 6.