McDonald's India, Vikram Bakshi go for out-of-court settlement in dispute

Patch up brings end to nearly 6-year old tussle, terms to be submitted to NCLAT by May 13.

Fast-food chain McDonald’s India and its estranged partner Vikram Bakshi (pictured) have opted to go for an out-of-court talks to settle their six-year-old dispute, the two parties informed the National Company Law Appellate Tribunal (NCLAT) on Monday. 

The terms and date of the settlement as well as any other development in the case can be conveyed to the NCLAT by lawyers from any side, the appellate tribunal said.

“Counsel for the parties’ submits that they are negotiating for settlement but the impugned order may come in their way. In the facts and circumstances, we allow the parties to reach settlement uninfluenced by any of the order passed by the Tribunal or this Appellate Tribunal,” the NCLAT order said. The appellate tribunal will now consider their request on May 13.

Bakshi had in 1995 inked a deal with McDonald’s to open its outlets in India. The partnership was a 50:50 venture between McDonald’s India and Bakshi’s Connaught Plaza Restaurant (CPRL), wherein the latter would be responsible for opening and managing outlets of McDonald’s in northern and eastern India.

In 2017, McDonald’s India terminated the franchise deal of 169 outlets managed by CPRL citing non-payment of royalties, and asked suppliers to stop dealing with the latter. The suppliers of CPRL included Vista Processed Foods, Schreiber Dynamix Dairies, Cremica Foods Industries and Amrit Foods. Earlier in 2013, McDonald’s India had ousted Bakshi from the post of managing director of CPRL.  However, he was restored to his position in July 2017. Subsequently, McDonald’s India had also challenged the use of the McDonald’s trademark by Bakshi’s CPRL.

The two parties have also approached the Delhi High Court, pleading that two earlier court orders be modified allowing Bakshi to sell his CPRL shares to McDonald’s India. The parties have also pleaded that the 2013 court order be amended so that CRPL is able to issue equity shares worth Rs 6.34 crores to Bakshi Holdings. 

The court will consider these matters on May 20. In the southern and western regions, McDonald’s outlets are run by Amit Jatia-led Westlife Development.

How the case unfolded

1995: McDonald’s India and Vikram Bakshi’s Connaught Plaza Restaurants sign deal to open the food chains’ outlets in India 

2013: McDonald’s ousts Bakshi as MD of Connaught Plaza Restaurant

2017: McDonald’s terminates contract with Bakshi, asks suppliers not to supply to his company

• McDonald’s files case against Bakshi’s Connaught Plaza using the food chain’s trademarks
• NCLT reinstates Bakshi as MD of Connaught Plaza Restaurants