The National Company Law Appellate Tribunal set aside the settlement agreed to by McDonald’s India and Vikram Bakshi by asserting that -
“As we find that the parties have reached an agreement, which has not been approved by this Appellant Tribunal and is prima facie against the order of the Debts Recovery Tribunal, we are of the view that the parties should not implement such agreement and not leave this country without intimating the Debts Recovery Tribunal or this Appellate Tribunal. However, pendency of the appeals or this interim order will not come in the way of the Debts Recovery Tribunal to modify its order, if Vikram Bakshi and others who are parties before the Debts Recovery Tribunal satisfy the order of the said Tribunal”
A two judge Bench chaired by Hon'ble Mr. Justice S. J. Mukhopadhaya and Hon'ble Mr. Justice Bansi Lal Bhat found merit in the contentions raised by the counsel for HUDCO that the settlement reached by McDonald’s India and Vikram Bakshi in violation of the authority of the Debts Recovery Tribunal.
OVERVIEW OF DISPUTE BETWEEN MCDONALD’S AND VIKRAM BAKSHI
The main issue in the dispute is the contract between McDonald’s India and Vikram Bakshi the MD of Connaught Plaza Restaurants (CRPL).
Under the Contract, it is a joint 50:50 partnership between McDonald’s Pvt Limited (MIPL) and CRPL for a term of 25 years from 1995 itself.
In 2008, MIPL tried to breach this share mandated by the contract had tried to buy the 50 percent shares of Vikram Bakshi.
In 2013, the Company ousted Vikram Bakshi as the MD of CRPL but he was later reinstated by the NCLT in a 2017 judgement that prevented MIPL from further interference. MIPL however sent a notice of termination of contract to CRPL on 21st August 2017 for non-payment of royalties.
This contract has resulted in a long legal battle between MIPL and Vikram Bakshi that has led to Vikram Bakshi filing suits in the London Court of Commercial Arbitration, (LCIA) , The National Company Law Tribunal (NCLT) , National Company Law Appellate Tribunal (NCLAT) and even the Supreme Court itself.
A settlement was reach on May 10th 2019 but however in light of this recent judgement we can clearly say that litigation in the present matter is far from over.