McDonald had filed a petition in Delhi High Court, which was to challenge the order issued by National Company Law Tribunal. Delhi High court has rejected the petition.The Previous NCLT order directed the McDonald to answer, as to why did they terminate the contract with the CPRL(Connaught Plaza restaurants limited).
The legal battle between two companies has been going on since 2013 when The US Burger King decided to remove their Indian Partner Vikram Bakshi. The company said the termination of the contract was due to mismanagement of funds and non-payment of royalty to the US company for over two years.
CPRL is a partner in North and East India, where it operates the US company’s franchisee. Also, the shutdown of the 43 restaurants in Delhi due to non-renewal of food license. CPRL operates 169 restaurants in north and east India. NCLT order asked the Vikash Bakshi to continue as managing director of the company.
While the McDonald asked the CPRL to remove its brand name after the cancellation of the contract, CPRL moved to NCLT. The legal battle has ensued in this matter. Both the companies are utilizing their legal remedies to make their case stronger.
This has resulted in the dark future for the employees for the company in India. The case seems to be going nowhere and people working there are finding themselves in the lurch. According to media reports, the spokesperson for the company said they are seeing all the legal remedies available after their petition was rejected.
While the US company is no mood to develop the contract further and it has already said that it is looking for another partner for India franchise. This may take some time but once the process is complete, they will announce a formal agreement with the press. While the Vikas Bakshi’s Lead CPRL looks to maintain the legal tussle to finally win this contract.
The McDonald In India
Since, this a 50:50 joint venture between both the companies, they have been exercising their rights to have a better deal. While the brand McDonald takes a dip in this ongoing controversy of legal battle but it is not something new for the company which has faced many such actions and situation in its glorious history.
What would happen to the Indian partner is in the hands of the legal road? Last year, both the companies were involved in the battle over a share of CPRL after the McDonald India Private Limite filed a petition in the London Court of International Arbitration (LCIA), which asked Bakshi to transfer his 1,45,600 shares in CPRL to the US company. Many ordeals of a legal tussle between the two companies have been going on for long. And, it seems highly unlikely that the peace between two companies can be found soon.
But, what it goes on to prove is the quality and environment in doing a business in the Indian scenario. While CPRL is confident of its win in the court, we are hopeful that a solution is soon found between both the companies. The biggest effect is on the staff and workers and suppliers of the company in India, who remain entangled between both the companies.