In 1995, McDonald's signed a 25-year partnership agreement with the Indian entrepreneur Vikram Bakshi to develop the brand in northern and eastern India. The structure chosen, Connaught Plaza Restaurants Pvt Ltd (CPRL), was owned in strictly equal shares - 50/50 - by McDonald's India and Bakshi's entities.
2013: the ousting
In 2013, Vikram Bakshi was removed as managing director of CPRL by the joint venture's board of directors. He challenged the decision before the Indian Company Law Board, the body then competent in company law matters.
Four courts, six years
The dispute went on for six years, moving from one forum to another as the Indian judicial system was reorganised: from the Company Law Board to the newly created National Company Law Tribunal (NCLT), then on appeal before the National Company Law Appellate Tribunal (NCLAT), with forays before the Delhi High Court and the Supreme Court of India on procedural questions.
In July 2017, the NCLT issued a decision in Bakshi's favour, worded in severe terms regarding McDonald's management of the joint venture. The brand appealed to the NCLAT.
The outcome: a buyout, not a judgment on the merits
The case would never be decided on the merits by a higher court. In May 2019, McDonald's and Bakshi announced an out-of-court settlement: McDonald's bought the entire 50% stake held by Bakshi and his entities in CPRL, for an undisclosed amount. At the joint request of the parties, the NCLAT set aside the NCLT's July 2017 decision and ended the appeal proceedings - a contractual outcome, not a judgment.
The episode recalls, in the context of a joint venture rather than conventional franchising, a question that this case file encounters elsewhere in other forms: what becomes of a local operator when McDonald's Corporation decides to take back control of a market it helped to develop - whether, as here, through a buyout of shares, or, as in Marseille, through the end of a lease-management agreement.