The largest Indian law firm break-up ever is now official, after the Bombay high court today blessed the arbitral award arrived at after nearly six months of mediation between Amarchand Mangaldas Suresh A Shroff & Co managing partners and brothers, Cyril and Shardul Shroff.
Justice Gautam Shirish Patel today allowed the testamentary and civil suits brought in November 2014 by Shardul against his brother to be withdrawn, with Cyril filing an affidavit that he would not fight their late mother's will.
Cyril’s affidavit, dated 5 May, tendered to the court today stated:
With a view to preserve the family name and keep the reputation of the family unblemished, and in order to foster peace in the family, I have agreed not to contest and agreed for grant of probate of the will and Codicil of BSS, irrespective of whatever grounds I have to contest the Will and Codicil and the adverse statements made therein and SSS has agreed not to press the suit, in view of the arbitral award. I convey my no objection to the grant of probate to SSS [petitioner].
According to a press release by the mediators, JM Financial founder Nimesh Kampani, senior counsel Harish Salve and Justice BN Srikrishna, "the two branches of the family have agreed to split and bifurcate into separate entities independently carrying on the profession of law".
It added: "With a view to preserve the fair name and reputation of the family unblemished, and in order to foster peace in the family, Mr. Cyril Shroff agreed not to contest and agreed for grant of probate to the will and codicil of his mother, late Smt. Bharatiben Shroff, irrespective of whatever grounds he may have had to contest the will and codicil, and Mr. Shardul Shroff agreed not to press the suit, in view of the family settlement and arbitral award."
The mediators wrote that they had entered into a detailed family settlement to divide "family properties, professional practice and allocation of assets".
They wrote that they were pleased that they had been "successful in its efforts to stave off what threatened to be a long drawn out and bitter litigation" and to achieve a settlement in a "relatively short period of time considering the complexities involved".
This was achieved "in no small measure on account of the spirit of accommodation and keenness displayed by all the contending parties, and their belief in the need to compose amicably their differences and to arrive at a family settlement that would maintain peace and cordiality among he members of the family", they wrote.
The brothers' protracted mediation began after a Bombay high court hearing on 14 November 2014 at which senior counsel Iqbal Chagla and law firm Federal Rashmikant represented Cyril, and senior counsel P Chidambaram and law firm Bharucha & Partners acting for Shardul.
After that hearing the brothers agreed to mediate their differences under the three mediators, rather than fight it out in the courtroom.
Their dispute revolved around the will of Bharati Shroff, the brothers’ late mother, which allegedly bequeathed all of her assets, including the largest single equity stake in the Amarchand law firm to Shardul.
Cyril claimed that equity in the firm was not hers to bequeath, as the family’s equity holdings in the firm were governed by partnership and family framework agreements, while Shardul claimed primacy of the will.
During mediation, Mumbai-based Cyril and Delhi-based Shardul started executing plans, sanctioned by the mediators, to set up new partnerships and offices in each other's respective cities. Both have begun hiring partners for their new offices.
Live from Bombay high court earlier today
Amarchand Mangaldas, which has faced a protracted mediation since November 2014 over the future of the firm, will settle its dispute today in the Bombay high court which will result in a split of the firm.
Due to popular request from readers, Bapu Deedwania is reporting live again from Mumbai about the biggest law firm split probably ever, possibly anywhere.
However, it’s unlikely there’ll be significant arguments made today, since mediation ended yesterday, and we’re predicting it could all be over rather quickly.
13:45 Both Cyril Shroff and Shardul Shroff have been waiting for Justice Gautam Patel’s court for more than an hour. The matter was originally scheduled to be heard at 11:30 but other matters have kept the court busy and the Shroffs waiting.
Shardul has been waiting inside the courtroom, sitting face the bench since 11:30.
Cyril is waiting outside the courtroom while his wife and Amarchand partner Vandana Shroff is inside.
13:47 Cyril has entered the courtroom with Iqbal Chagla, sitting in a back row.
13:55 It’s started! Chagla is addressing the bench for Cyril.
Chagla says that the mediation panel between the brothers came to a settlement yesterday (5 May).
13:57 Justice Patel is reading, and allowing that the suit be withdrawn.
13:58 Now Chagla is tendering an affidavit by Cyril in the testamentary matter between them relating to the brothers’ late mother’s will. In the affidavit Cyril has agreed not to contest the matter relating to probate and codicil.
13:59 Justice Patel says that he will pass an order of the consent terms, with the department to issue probate on priority basis.
14:09 And, as expected, it’s already over. Update to follow soon. Hearing there is a pre-prepared press release to be issued soon.
14:31 Patel had dictated his order, allowing the suit to be withdrawn in light of the arbitral award in the mediation having been passed.
14:53 Awaiting official press release, which is understood to be released shortly.
15:02 The old Amarchand Mangaldas partnership will dissolve on Saturday 9 May, with separate partnership to be started by Cyril and Shardul shortly thereafter.
The official press release from the mediators has been released: