Opening up a new front in its battle with estranged partner Vikram Bakshi, McDonald’s India Pvt Ltd (MIPL) filed an application in the Delhi High Court on Monday pressing for enforcement of the September 13 order of the London Court of International Arbitration (LCIA).
The LCIA case pertains to the valuation of Bakshi’s holding in the joint venture (JV) company Connaught Plaza Restaurants Pvt Ltd (CPRL) by McDonald’s, which the former said was lower than what it actually was. Bakshi had proposed to buy out McDonald’s stake in the 50-50 JV minus the brand after he spurned the fast food chain’s offer to buy out his stake for $7 million (Rs 41 crore) in 2008.
Bakshi had got independent audit firm Grant Thornton to value CPRL. The audit firm arrived at a valuation of $331 million (Rs 1,755 crore), which was rejected by McDonald’s, who approached the LCIA in December 2013.
The September 13 order upheld what McDonald’s had said about Bakshi’s valuation, asking the latter to sell his stake to the US-based fast food chain. In its 2-1 majority award, the arbitration panel had asked Bakshi to transfer his 1,45,600 shares in CPRL to McDonald’s at a fair valuation in accordance with their JV agreement.
In a statement on Monday, MIPL said that it would continue with its appeal in the National Company Law Appellate Tribunal (NCLAT) as it pursued the new case in the Delhi High Court.
“MIPL has filed an application in the Delhi High Court to progress the enforcement of the partial award rendered in its favour by the London Court of International Arbitration. At the same time, MIPL will continue to take all other measures and steps to exercise its legal and contractual rights in related matters,” the statement said.
CPRL operates 169 stores in the north and east of India. Last week, the JV company had reopened 18 stores in Delhi after their health licences were renewed.
A total of 43 McDonald’s outlets in New Delhi-National Capital Region were forced to shut down following lapse of their eating-out or health licences in June. This development had acted as a trigger in the latest round of legal battles between Bakshi and MIPL, which has been on since 2013.
Bakshi declined to comment on the Delhi High Court matter. The case hearing has been posted for Tuesday.
Source: Business-Standard 