The Company Law Board (CLB) on Tuesday reproached fast-food chain McDonald’s India for moving a dispute with a joint venture partner in India to the London Court of International Arbitration, saying the matter needs to be addressed here first. .
While setting a date of December 16 to hear McDonald’s India’s pleas for arbitration, the CLB Bench questioned the multinational’s move to simultaneously approach the London Court.
McDonald’s told the CLB Bench that it had a contractual right to move the case to the London court. In October, McDonald's India had pleaded before the CLB that the dispute over the reinstatement of Vikram Bakshi as the Managing Director of Connaught Plaza Restaurants Ltd (CPRL) should be referred to the Court of International Arbitration in London.
CPRL is a 50:50 joint venture between Bakshi and McDonald’s India, which operates the burger chain in northern and eastern India. On August 30, McDonald’s had announced that Bakshi had ceased to operate as the managing director of CPRL by July 17.
McDonald's India had moved an application under the Arbitration and Conciliation Act, pleading that according to the joint venture agreement, any unresolved dispute will have to be referred for arbitration. CPRL has earlier stated in an affidavit that Bakshi’s appointment as the managing director was made at a board meeting and the same was not a subject matter of any arbitration agreement.
Meanwhile, the Delhi High Court has dismissed McDonald’s request for a receiver for Bakshi’s shares. The Court order recognised their ongoing hearing at the CLB and Bakshi’s intention of not selling his stocks.