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McDonald’s India appeals against Delhi HC order allowing NCLT for contempt proceedings

McDonald’s India and Vikram Bakshi, managing director of the burger chain’s north and east India licencee Connaught Plaza Restaurants Pvt. Ltd, had landed in court in 2013, after the former voted against his re-election as the MD of CPRL. Photo: MintPremium
McDonald’s India and Vikram Bakshi, managing director of the burger chain’s north and east India licencee Connaught Plaza Restaurants Pvt. Ltd, had landed in court in 2013, after the former voted against his re-election as the MD of CPRL. Photo: Mint

McDonald's India's appeal comes a few days before the burger chain's parent is supposed to file a reply to the contempt plea filed in September 2017 by Vikram Bakshi

New Delhi: McDonald’s India Pvt. Ltd (MIPL) on Monday moved the Delhi high court against an order by a single-judge bench allowing the National Company Law Tribunal (NCLT) to proceed with contempt proceedings against the burger chain’s parent McDonald’s Corp. on a petition filed by its estranged joint venture partner for north and east India.

Justice A.K. Chawala recused himself and directed that the matter be listed before an appropriate bench on 1 February. Apart from Justice Chawla, the division bench comprised Justice Ravinder Bhatt.

Justice R.K. Gauba had on 9 January dismissed McDonald’s India’s plea against NCLT’s right to issue a contempt notice.

This comes a few days before McDonald’s Corp. is supposed to file a reply to the contempt plea filed in September 2017 by Vikram Bakshi, managing director of the burger chain’s north and east India licencee Connaught Plaza Restaurants Pvt. Ltd (CPRL).

CPRL, a joint venture between McDonald’s India and Bakshi, operates 169 McDonald’s restaurants. McDonald’s India had terminated the franchise agreement last year, according to which Bakshi was supposed to shut all restaurants from 6 September.

In his petition to NCLT in September, Bakshi had alleged that the termination violated an earlier NCLT order of 13 July 2017, which had asked McDonald’s Corp. to refrain from interfering in the smooth functioning of CPRL and its restaurants.

Following this, NCLT had issued a showcause notice to McDonald’s Corp. The tribunal, in a hearing after the Delhi high court’s decision to allow contempt proceedings, had asked McDonald’s Corp. to file a reply to the contempt plea.

So far, all restaurants have continued to operate. McDonald’s India’s petition challenging the NCLT order of 13 July 2017 is pending before the National Company Law Appellate Tribunal, or NCLAT.

Separately, the Delhi high court is also hearing McDonald’s India’s plea to enforce a London arbitration court award that had asked Bakshi to sell his stake in CPRL. Bakshi has filed an appeal challenging the arbitration order.

McDonald’s India and Bakshi had landed in court in 2013, after the former voted against his re-election as the managing director of CPRL. Bakshi challenged his removal at the Company Law Board (now NCLT), accusing McDonald’s India of mismanagement and oppression. NCLT reinstated Bakshi as managing director in July 2017.

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