New Delhi: The National Company Law Tribunal (NCLT) on Wednesday issued a final warning to American fast food chain McDonald’s Corporation and asked the company to file a reply to its estranged partner Vikram Bakshi’s contempt plea by 17 February.
A bench headed by NCLT president M.M. Kumar said that this will be treated as the last opportunity for McDonald’s Corp. as the matter has been pending with the tribunal for close to six months.
Bakshi, who is the managing director of the McDonald’s north and east India licencee Connaught Plaza Restaurants Pvt. Ltd (CPRL), had filed the contempt plea in September 2017. McDonald’s India had terminated its franchise agreement with CPRL in August last year.
In his plea, Bakshi had alleged that the termination of franchise agreement was in conflict with an earlier order of NCLT dated 13 July 2017, which had asked McDonald’s Corp to refrain from interfering in the smooth functioning of CPRL and all its 169 McDonald’s outlets in north and east India. Following this NCLT had issued a show-cause notice to McDonald’s Corp. in September.
The matter has been kept in abeyance in NCLT for the past few months as McDonald’s India had challenged NCLT’s right to issue a contempt notice to its US parent in Delhi high court. While a single-judge bench allowed NCLT to proceed with the contempt plea earlier in January, McDonald’s India appealed high court’s order yet again on 29 January.
“We are not waiting for the high court. This (direction to file a reply) will be treated as the last opportunity as the matter is pending in this tribunal for the last many months," said the NCLT president, during the hearing on Wednesday.
The matter will be heard next on 23 February.
The Bakshi-McDonald’s feud goes back to 2013, when the latter had voted against Bakshi’s re-election as managing director of CPRL, following which Bakshi challenged his removal at the Company Law Board (now NCLT). NCLT reinstated Bakshi as managing director on 13 July. McDonald’s challenge to NCLT’s order is pending in National Company Law Appellate Tribunal.
Separately, Delhi HC is also hearing McDonald’s India’s plea against CPRL for the alleged violation of its intellectual property including its trademarks, designs and branding, by continuing to sell their products in the name ‘McDonald’s’ even after the termination of the franchise agreement.