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McDonald's to get full control of 165 outlets run by Vikram Bakshi as former partners hint at clinching a settlement soon

McDonald's will get the full control of about 165 outlets in India after the US burger giant and its former Indian partner gave indications of a settlement a couple of days ago following a decade- long dispute between them.

McDonald's will take over the operations of around 165 outlets now being run by its partner Vikram Bakshi's Connaught Plaza Restaurants (CPRL) in North and East India, according to The Times of India.

"The handover process is in progress. McDonald's will look to renovate and refurbish the outlets and rework the supply chain," the report said citing a senior industry executive aware of the development.

On Monday, estranged partners McDonald's and Bakshi told the National Company Law Appellate Tribunal  (NCLAT) that they were working towards an out-of-court settlement to end their over the five-year-old dispute.

 McDonalds to get full control of 165 outlets run by Vikram Bakshi as former partners hint at clinching a settlement soon

Representative image. Reuters.

Counsels for McDonald's India Pvt Ltd and Bakshi told a two-member NCLAT bench, headed by Chairperson S J Mukhopadhyay, that they were trying to work out a settlement.

The bench directed that either of the parties may file an affidavit including the terms of the settlement being arrived at on the next date of hearing on 13 May.

In December 2017, Bakshi alleged that McDonald's followed "different standards" for India compared with other countries and continuously ignored the food quality concerns raised by him for the past four years, reported PTI.

Bakshi's response came after McDonald's India earlier alleged lapses in food quality and safety level by "all facets of the supply chain".

"It appears that McDonald's have global standards for food safety and supplies, and they have a very different set of standards for countries like ours which is a clear double standard," Bakshi alleged.

In September 2017, the London Court of International Arbitration (LCIA) had asked Bakshi to sell his stake in the JV firm CPRL to the US-based fast food chain, reported PTI.

In its 2:1 majority award, the arbitration panel has asked Bakshi to transfer his 1,45,600 shares in the 50:50 joint venture CPRL to McDonald's India at a fair valuation in accordance with their JV agreement.

In August 2017, McDonald's had terminated franchise agreement for 169 out of its 430 fast food outlets operated by Bakshi-led CPRL in north and east India, alleging breach of contract terms and payment default by the operator. This had created an uncertainty for over 10,000 staff directly and indirectly employed at these outlets.

Bakshi was at loggerheads with McDonald's since 2013. Later, he had approached the NCLT after McDonald's removed him from the post of Managing Director (MD) of CPRL in 2013. In July, 2017, the tribunal restored him to his position. It was challenged by McDonald's in the NCLAT.

With PTI inputs

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Updated Date: May 08, 2019 15:19:47 IST