NCLAT hearing today to decide fate of McDonald’s employees
New Delhi: The fate of 169 McDonald’s restaurants and its 6,500 employees hangs in the balance as the National Company Law Tribunal (NCLT)-appointed administrator has asked McDonald’s India and its estranged joint venture partner Vikram Bakshi to wait till Thursday for the decision of the appellate tribunal before shutting the restaurants.
This means that all McDonald’s outlets in the north and east India, which were supposed to be shut from 6 September, will remain open till Thursday.
On 21 August, McDonald’s India had terminated its franchise agreement for 169 restaurants across north and east India with Connaught Plaza Restaurants Pvt. Ltd (CPRL), a joint venture between the former and Bakshi. According to the termination notice, Bakshi is no longer authorized to use McDonald’s names, trademarks, designs, branding, operational and marketing practice and policies and food recipes and specifications.
Bakshi had moved the National Company Law Appellate Tribunal (NCLAT) on Wednesday with a fresh appeal to seek relief against the termination, a day after NCLT dismissed his plea challenging the termination and asked him to approach the appellate tribunal.
However, the tribunal denied immediate relief and said that the matter will be heard on Thursday.
In a board meeting held on Wednesday morning, administrator Justice G.S. Singhvi said that since the appeal is due for hearing in NCLAT on Thursday, both sides should wait for the decision.
“The administrator on the board of CPRL, in the board meeting on Wednesday, asked both sides to await NCLAT’s decision tomorrow. I am resolute in my determination to fight this injustice that will affect the livelihoods of thousands of Indians,” said Bakshi, who was also re-elected as the managing director of CPRL in the board meeting.
Asked about the details of the board meeting, a McDonald’s India spokesperson declined to disclose specifics. “The McDonald’s India -nominated directors attended the CPRL board meeting today. However, we won’t discuss the specifics of our internal meetings,” said Barry Sum, director, corporate relations, Asia Foundational Markets, McDonald’s Corp.
Separately, NCLT had also issued a showcause notice to McDonald’s Corp. on Tuesday, in a contempt application filed by Bakshi alleging that the termination of franchise agreement was in conflict with an NCLT order of 13 July 2017, which asked the American fast food chain to refrain from interfering in the smooth functioning of CRPL and all its 169 restaurants.
The legal battle between Bakshi and McDonald’s goes back to 2013, when the latter had voted against the re-election of Bakshi as managing director of CPRL.
Following that, Bakshi had challenged his removal at the Company Law Board (now NCLT), accusing McDonald’s of mismanagement and oppression. NCLT had reinstated Bakshi as the managing director on 13 July and restrained McDonald’s from interfering in the functioning of CPRL.