McDonald’s action ‘not due to hygienic issues’

McDonald’s local franchisee Rusi Pestonjee is to challenge the ex-parte enjoining order against him over a dispute concerning the sale of shares.

Pestonjee owns a 98% stake in International Restaurant Systems Ltd., the local franchisee of McDonald’s.

Colombo Commercial High Court Judge Sumith Perera last week issued an enjoining order preventing Pestonjee from using the name McDonald’s in any way and from selling its food menu in 11 outlets until 4 April.

The court made this order consequent to a lawsuit filed by McDonald’s Corporation, US, seeking the court’s jurisdiction under the provisions of the Intellectual Property Act, No. 36 of 2003.

The plaintiff stated that it has terminated the defendant’s right to use the name McDonald’s or any name similar to it and to use any name that would convey to the public that the said restaurants/outlets are connected to McDonald’s.

The plaintiff stated that the basis of the Development Agreement entered into in August 1997 has ceased to exist due to the defendant’s actions.

The plaintiff further stated that the plaintiff does not desire the defendant to be a franchisee or operate any McDonald’s restaurant.

Dr. Romesh De Silva PC, instructed by Sanath Wijewardane, appeared for the plaintiff.

A spokesperson for the franchisee said that McDonald’s action is related to the sale of shares and not due to hygienic issues as widely reported.

“As per the agreement, Pestonjee is required to sell only up to 50% of the local franchise entity, but McDonald’s is demanding 100%. We will be contesting the enjoining order,” the spokesperson added.