McDonald’s India row: CPRL to pursue legal recourse against licence scrapping, says Bakshi

New Delhi: McDonald's estranged partner Vikram Bakshi on Monday said the board of CPRL, the franchisee of the US fast food chain for north and east India, has decided to continue full legal recourse against termination of licence.

The board of Connaught Plaza Restaurants Ltd (CPRL) had met on Sunday to discuss the future course of action following the termination of the franchise agreement by McDonald's India Pvt Ltd (MIPL) last month.

"The CPRL board has decided to pursue full legal recourse against the illegal termination by MIPL," Bakshi said.

Justice G S Singhvi has been appointed by NCLT as administrator on the board of CPRL.

The decision of the CPRL board comes against the backdrop of an international arbitration panel order last week asking Bakshi to sell his stake in the JV to MIPL at a fair valuation to be determined by experts.

CPRL is a 50:50 joint venture between MIPL and Bakshi. The company's board has equal representation of two directors each from the two parties.

However, in the previous board meetings of CPRL, the directors appointed by McDonald's have stayed away.

Asked if all the directors attended Sunday's meeting, Bakshi said: "The foreign directors on the CPRL board did not attend the meeting yesterday."

A query sent to McDonald's did not elicit any response.

CPRL operated 169 outlets of McDonald's in north and east India. The fate of these outlets has become uncertain following the spat between the two partners.

Already, 43 outlets of the fast food chain in the capital have been closed since June due to expiry of eating house licence.

Bakshi is already contesting at the National Company Law Appellate Tribunal (NCLAT) the termination of franchise licence by MIPL.

Appeals filed by both the parties are listed at NCLAT for hearing on September 21, which could possibly decide on the fate of the 169 outlets.

After McDonald's terminated the licence last month and barred CPRL from using its name and trademark from September 5, Bakshi said the outlets will continue to operate till the time the entire board meets and finds a resolution.

Bakshi has been at loggerheads with McDonald's since 2013 when he was removed from the post of MD of CPRL. He had approached the NCLT (National Company Law Tribunal), which in July this year restored him to his position.

It was challenged by McDonald's in the NCLAT where the appeal is pending.

Bakshi also challenged the termination of franchise licence by McDonald's at the NCLAT, but was refused any interim relief. Both the appeals are listed on September 21.