Economy

United Kingdom arbitration court instructs Vikram Bakshi to sell CPRL stake to McDonald's

United Kingdom arbitration court instructs Vikram Bakshi to sell CPRL stake to McDonald's”

The London Court of International Arbitration has directed the appointment of experts to determine a fair and mutually agreeable valuation of the shares held by Vikram Bakshi in an equal joint venture with McDonald's so that the U.S. restaurant chain can buy out its estranged partner's stake, two people aware of the developments said. The arbitration panel had ruled in favour of the fast-food company in a dispute over the termination of Bakshi as managing director of their joint venture.

The London Court of International Arbitration (LCIA) on Wednesday called for the appointment of independent experts to determine a fair value of the joint venture so that the US-based fast food chain can buy out Bakshi, according to a report by the Press Trust of India.In a text message, Bakshi said that he is "carefully considering the partial award given by the tribunal, its implications as well as the legal options".

The case pertains to the valuation of Bakshi's holding in the joint venture company Connaught Plaza Restaurants (CRPL) by McDonald's, which the former had said was lower than what it actually was.

The worldwide 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. Subsequently, the burger chain slapped CPRL with a notice terminating its franchise licence last month, citing non-payment of royalty to which Bakshi said McDonald's executives on CPRL's board were in the know.

"As the master franchisor in India, earlier this week MIPL informed CPRL's suppliers that we have terminated our franchise agreements with CPRL for all 169 restaurants in north and east India", a McDonald's India spokesperson was quoted by PTI as saying.

As part of the license termination, CPRL was asked to stop using McDonalds's name, system, trademark, designs and its associated intellectual property, among others, with effect from September 6. Of these, 43 outlets have been shut. However, McDonald's challenged this order in the National Company Law Appellate Tribunal (NCLAT) where the appeal is pending.

McDonald's has been pursuing arbitration against Bakshi in LCIA since 2013.

The estranged Indian partner of McDonald's, Vikram Bakshi today asked the United States food major to return all the prime properties leased to it for running.

Vikram Bakshi, who was removed by McDonald's Corp as the head of its India joint venture four years ago, has got a shot in the.



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