Bakshi moves court for stay on foreign arbitration by CPRL

In a suprise move, Vikram Bakshi, the ousted managing director of Connaught Plaza Restaurants (CPRL), on Wednesday moved the Delhi High Court seeking a stay on the arbitration proceedings initiated by McDonald’s India (MIPL) in a foreign tribunal.

According to sources, the ex-MD of CPRL has filed an application in the High Court seeking an injunction against MIPL from pursuing arbitration in the London Court of International Arbitration (LCIA) in respect of the unresolved disputes between the two.

The move comes as a suprise as the former MD had in January this year nominated retired Justice JK Mehra of the Delhi High Court to represent him in the arbitration proceedings before LCIA whereas MIPL had earlier nominated one Ian Hunter QC to represent it.

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The court has put up the matter for further hearing on April 3. Incidentally, another hearing concerning Bakshi’s offer to buy MIPL’s stake in CPRL is also listed on Thursday before the CLB.

The partnership between the US fast-food chain and Bakshi is housed in Connaught Plaza Restaurants (CPRL), a 50:50 joint venture that runs 150 outlets in northern and eastern India. The JV was formed way back in 1995.

Bakshi?s term as managing director of CPRL expired on July 17. Soon after, problems between the partners surfaced.

On August 30, McDonald?s issued notices in select newspapers saying Bakshi had ceased to be the MD of CPRL. In early September, Bakshi moved the CLB for his reinstatement as MD of CPRL.

In January, Bakshi had offered before the Company Law Board (CLB) to buy out MIPL’s stake in CPRL on a valuation based on the company?s net asset, excluding the value of the ?McDonald’s? brand name.

Responding to the proposal, MIPL had made a counter-proposal to buy out the ex-MD’s stake at the earlier offered valuation of $7 million.

Accordingly, CLB had granted time to both the parties and asked them to submit their stand on the mutual proposed buy-out.

Last year, on December 30, CLB had also dismissed Bakshi’s plea seeking a stay on foreign arbitration proceedings instituted by MIPL in the LCIA. The dispute submitted for arbitration to the foreign tribunal also includes the question of Bakshi’s reinstatement as the managing director of CPRL.