NCLT Rejects Vikram Bakshi’s Plea Against McDonald’s Decision To Scrap Franchise Pact
NCLT rejects Vikram Bakshi’s plea against McDonald’s move to terminate franchise agreement.
The National Company Law Tribunal rejected Vikram Bakshi’s plea challenging McDonald’s decision to scrap the franchise pact with his company for a third of burger chain’s outlets in India.
The NCLT advised Bakshi to file a plea at the National Company Law Appellate Tribunal. Bakshi, in an emailed statement to BloombergQuint, said he intends to move NCLAT. The board of Connaught Plaza Restaurants Pvt. Ltd. will meet on Wednesday amid uncertainty over the fate of 169 outlets it operated, he said. Bakshi had filed the contempt plea after McDonald's last month terminated licence of these outlets.
The burger chain, in an emailed statement to BloombergQuint, said, “The termination notice period ends today (September 5). Therefore, CPRL (Connaught Plaza) is no longer authorised to use the McDonald's system and its intellectual property...We are proceeding with exercising our legal and contractual rights.”
McDonald’s said it’s examining the NCLT order and does not have any comment at this point. The burger chain had over 450 outlets in India through two franchises till it ended partnership with Bakshi’s Connaught Plaza in the north and the east. Hardcastle Restaurants, a subsidiary of Westlife Development Ltd., runs over 250 McDonald’s outlets in west and south India.
The tribunal sent a contempt notice to McDonald’s on Bakshi’s second plea which alleged the fast food chain was interfering in the affairs of Connaught Plaza, according to Bloomberg. The dispute began in 2013 when Bakshi was removed as the managing director of Connaught Plaza. He moved the NCLT against his ouster, which reinstated him in July this year.
After McDonald’s terminated the franchise pact, Bakshi had said that the timing of the move was “hugely suspect” because it came on the morning of the first board meeting which was scheduled by the administrator – a former judge of the Supreme Court of India. Two foreign nominee directors of McDonald’s declined to attend, despite being given sufficient advance notice, he had said.
With inputs from PTI
(Updates an earlier version to add Vikram Bakshi’s response)