Vikram Bakshi challenges termination by McDonalds

Vikram Bakshi, the ousted JV partner of McDonald’s in India has taken legal recourse against the fast food giant’s decision to terminate the JV with his company.

On  December 13, Bakshi had filed an application with the Company Law Board (CLB) challenging McDonald Corporation's decision to terminate its 50:50 JV with Bakshi's firm Connaught Plaza Restaurants (CRPL).

On Dec 3, Bob Larson, senior VP & international relationship partner, McDonald’s APMEA — Greater Asia had sent an email to CRPL's employees in Delhi, informing them that the 1995-incorporated JV has been terminated.

In a hearing before the CLB bench on Monday, Bakshi’s lawyers requested the CLB to pass an injunction order to restrain McDonalds' from terminating the JV.

Bakshi's lawyers argued that McDonalds' had given no indication of its intention to terminate the JV earlier and that the notice was an illegal way to 'elect to purchase' the shares that Bakshi owned in the JV to gain control of the company.

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They also argued that the notice was an attempt to interfere in the judicial process and is “illegal and void”

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Maintaining that the termination notice was also disobeying the CLB's earlier orders to maintain status quo, Bakshi’s application -- a copy of which CNBC-TV18 has reviewed -- stated: “It is clear the termination notice is an afterthought and is a blatant attempt to try and circumvent the orders of status quo that is subsisting. The termination is part of the scheme and design adopted by the respondents (McDonalds’) to try and usurp the absolute control of the company (CRPL), illegally at the expense of the petitioner (Vikram Bakshi)”

Bakshi’s lawyers also requested the CLB to pass an injunction order against the arbitration proceedings that McDonalds has initiated at the London Court of International Arbitration (LCIA) through a notice dated 29 Nov. Bakshi’s lawyers argued that both Vikram Bakshi and Mcdonalds India Private Limited (MIPL) are residents of India. Since MIPL has invoked the Delhi HC under section 9 of the Arbitration and Conciliation Act, 1996, it has unconditionally admitted that the judicial seat of arbitration should be India, and Indian laws should apply. Therefore, the decision to move LCIA is merely a pressure tactic, and a way to compel Bakshi to expend large sums of money on litigation in the UK, argued his lawyers.

The CLB is yet to give its orders on the facts presented by Bakshi’s lawyers.