McDonald’s moves London court in feud with Vikram Bakshi

NEW DELHI: US-fast food chain McDonald’s Corporation has approached the London Court of International Arbitration (LCIA) even as India’s Company Law Board or CLB is yet to give its verdict on whether the dispute between Vikram Bakshi and the US company can be referred for arbitration.

The joint venture agreement of Connaught Plaza Restaurants Ltd (CPRL), in which Bakshi is an equal partner, refers to a clause that states, “Any unresolved dispute which may arise with the paragraphs 35-39 of the JV Agreement, shall be submitted for arbitration in the LCIA.” Bakshi has been asked to submit a response within 30 days on receiving the notice for arbitration.

“What we have filed in the London Court of International Arbitration is an independent claim and we have a right to do that,” Sudipto Sarkar, counsel for McDonald's, told CLB on Tuesday. CLB has been hearing arguments on the tenability of McDonald’s plea to refer the dispute with its Indian partner to arbitration in the LCIA.

The high-profile dispute began when the two McDonald's nominees on the four-member board rejected a proposal to re-nominate Bakshi as MD at an August 6 meeting. On August 30, McDonald's India issued a public notice saying Bakshi had ceased to be managing director of the joint venture.

McDonald’s also obtained a Delhi High Court order that Bakshi not be allowed to sell his shares in the joint venture until an interim order had been issued in the CLB proceedings. McDonald’s has also stated that it has the right to buy the stake in case the joint venture is terminated.

The high court order said that status quo should be maintained with regard to Bakshi’s shareholding until interim orders are issued by the CLB.

Bakshi has alleged that McDonald's has made several attempts in the past to acquire his stake in the venture.