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NCLAT to study London court order before further
decision in McDonald's case:
The National Company Law Appellate Tribunal (NCLAT)
on 21st September, 2017 said
it would study London Court of International Arbitration’s (LCIA’s) order,
passed last week, before arriving at a decision on the ongoing dispute between
McDonald’s India Pvt Ltd (MIPL) and Vikram Bakshi.
The matter will be heard on October 25, NCLAT Chairman
Justice S J Mukhopadhaya said. It was important to understand whether
the issue between the two joint venture (JV) partners was a case of operational
mismanagement or an arbitral dispute, he added. Bakshi and MIPL have
a 50:50 JV in India for the North and East regions.
“We have to see if it is an operational mismanagement or
arbitral dispute. The jurisdiction (of the NCLAT) would depend on that,”
Justice Mukhopadhaya said.
Bakshi, the estranged MIPL partner, declined
comment on the matter, saying he was awaiting the signed order.
MIPL stated it was reviewing the direction from the
court.
The LCIA on September 13 had asked Bakshi to sell his stake
in the JV company, Connaught Plaza Restaurants Ltd (CPRL), to the US-based
fast-food chain after it upheld the latter’s position.
McDonald’s Corporation, the parent of MIPL, had moved the
LCIA in December 2013 following a breakdown in ties between the two partners in
July-August 2013. The LCIA matter pertained to the valuation of Bakshi’s
holding in CRPL by McDonald’s, which the former had said was lower than what it
actually was.
Bakshi had proposed to buy out McDonald’s stake in the 50:50
joint venture minus the brand, after he spurned the fast-food chain’s offer to
buy out his stake for $7 million (Rs 41 crore) in 2008. He hired independent
audit firm Grant Thornton to value CPRL. The audit firm arrived at a valuation
of $331 million (Rs 1,755 crore), which was rejected by McDonald’s.
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