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After gloves came off in Bombay HC Shroff vs Shroff, Amarchand brothers agree to mediate with Salve, Justice Srikrishna, Kampani

Shroff family firm turns family feud
Shroff family firm turns family feud
Live from Bombay high court court room number 10 today, before Justice RD Dhanuka, with Bapu Deedwania reporting from Bombay high court.

11:38 Matter number five is on – the sixth scheduled is Shardul Suresh Shroff v/s Cyril Shroff & 6 others that everyone (who’s a lawyer and not there for their own case) is waiting for.

11:41 P Chidambaram is sitting in the first row. Not sure if he’s acting for either of the Shroffs, here for another matter or just chilling here out of curiosity.

11:46 Confirmed: Senior advocate Chidambaram is acting for Shardul Shroff against his brother.

11:49 Priyal Guliani @PriyalGuliani of Bloomberg TV tweets:


Amongst family Cyril Shroff, Vandana Shroff & Pallavi Shroff present in the courtroom says @PriyaSheth7

P Chidambaram for Shardul Shroff, Iqbal Chagla for Cyril Shroff

12:10 Two reports now that Darius Khambata is also acting on for Cyril Shroff (presumably alongside Iqbal Chagla)

Sajeet Kesav Manghat @sajeetkm:  And Darius is appearing for Cyril Shroff

12:21 The hearing has begun…

12:26 P Chidambaram (“PC”) says that Bharati Shroff’s will was videographed.

12:29 PC said: However unfortunate this may be, the fact is that defendant number 1 [e.g. Cyril Shroff], has been disinherited.

Iqbal Chagla (IC) interrupts for Cyril, saying that there had been a suppression of facts.

PC takes back initiative: Let me have the privilege of addressing the court…

12:34 PC argues for Shardul that the managing committee’s overriding of the will and deciding to divide Bharati Shroff’s equity evenly between the brothers, was unprecedented in the history of the firm.

PC says that never before had a decision been taken by resolution but only ever unanimously, and that while the mother was alive, she was consulted in all decisions.

12:37 PC says that two members of the management committee took a decision and passed it in respect of 52,000 “units” of the firm – units presumably referring to the equity points of Bharati Shroff, which are equivalent to a 22.5 per cent stake in Amarchand.

PC is reading an email by Abraham and Goulding (see background below), which they allegedly circulated in the capacity of managing committee members.

PC is objecting that Abraham and Goulding have taken upon themselves the role of the probate court as far as the will of Bharati Shroff was concerned. PC is contesting that they can do so and how they could have assumed that role.

[Readers may recall from earlier story, that the management committee allegedly decided to overrule the will and split the inherited equity equally between the brothers – click here for more details]

12:41 PC says that the best way to deal with the matter would be to put the 52,000 units of equity bequeathed by Bharati Shroff in suspension.

12:53 Bharati’s will reads: “I have made a conscious decision with the specific intention to keep Cyril and his family out of the management of my estate”.

Her will adds that her relationship with Cyril had been strained since 2003 and had never been fully repaired.

13:01 The gloves really are off in Delhi - a lot of personal massala being spilt here in open court from Shardul Shroff’s side. On the facts, for now: the will was dated June 2012, a codicil to the will was made on 25 January 2014.

13:15 According to PC, the will allegedly says that Cyril and his family were abusing and neglecting Bharati Shroff. More to follow…

13:18 Personal massala aside, getting to the crux of the matter, some legal arguments first for now: PC argues that the legal issue is whether a pre-will document in any way impact her testamentary and dispositive power.

PC says that things were moving in the right direction in mediation, but ended in great disappointment alas.

13:21 PC finished arguing, now Iqbal Chagla (IC) is up.

13:27 Actually, Darius (Khambata) is also joining in – seems he’s appearing on behalf of the two independent foreigners (George and James). He says that he’s upset that allegations of “inter meddling” were made by PC. He is saying that an internal email of 12 November has been suppressed, in which the two had an assurance that they would not be “inter meddling” by sending the email that PC took objection to.

Arguing on behalf of the two “independent professionals”, Darius says that they passed a resolution that was ratified by the majority.

How can it be alleged that the family arrangement or partnership agreement was breached? he asks.

Both George and James acted in accordance with those contracts.

It’s fine if Shardul doesn’t want to honour that agreement, says Darius, but don’t make wild allegations of a breach.

Was this allegation necessary, asks Iqbal, fully agreeing with Darius.

13:31 Iqbal then asks, possibly rhetorically, for what purpose has this suit been filed?

Justice Dhanuka doesn’t take it as a rhetorical question and answers: Maybe to find a solution?

What a judge. Gotta give it to him, he’s certainly keeping his cool.

13:33 Iqbal is arguing that the partnership agreement is an arrangement that should have been at the forefront, and it is sad that Shardul’s counsel have gone into the details of an un probated will.

However, IC says that the Bombay side is still ready for mediation.

13:43 What would we mediate on, asks IC? The suit of course!

PC plays nice, and says they’re ready to mediate on the suit, which he also said in the beginning.

IC asks why his learned friend (PC) is being so guarded – why had he not spoken of the allegedly suppressed email of 12 November?

PC proposes that the profit from those 52,000 units that belonged to Bharati Shroff, be kept in a separate account.

13:37 Justice Dhanuka interjects with a stinging sizzler: Don’t you think spending time with clients will help you earn more than spending time here?

Everyone laughs. Whoever said family disputes can’t be fun?

13:51 Chidambaram, Iqbal and Darius talk mediation.

PC makes a statement unreservedly accepting that we will not act in respect of the 52,000 units of equity.

Darius says both warring brothers should come to a settlement.

PC complains that Darius is acting beyond his brief.

Darius disagrees and says that the parties must ALWAYS look at a settlement and says that we must act beyond our brief.

PC responds that there is no atmosphere as of now for mediation, so let’s begin somewhere (by freezing those 52,000 units), right now.

Iqbal says that there need to be two mediators – one from commerce and one from the legal fraternity, to solve the entire problem, rather than come up with a piecemeal solution.

PC says that the Delhi Shroffs would come, then asks for the court to adjourn until 3pm.

PC and Iqbal discuss with each other, and takes permission to return at 3pm.

Court grants permission.

We’ll keep updating bits and bobs and will be back at 3pm in any case.

14:36 Long massala update on Shardul’s arguments, via Chidambaram (PC)

Some more detail on the less legal parts of counsel’s arguments so far. PC basically read out most of the will (and later codicil to the will in court).

The codicil and the will was videographed, holographed and attested before witnesses, said PC.

PC, reading out the will and codicil, said that Bharati wrote that she was “reduced to a mere showpiece” to be brought out by her younger son, Cyril, only when he wanted to show the world how nicely he treated her. Otherwise, she was upset that she was left completely unattended in the family residence in Mumbai and treated as though she did not exist – for “days on end” there would be no conversation, she wrote.

According to PC, she wrote that she had to hire an old cook for an hour even to get her meals cooked, which at one point in time were cooked in another building without Cyril or his wife’s knowledge. According to PC, she was told to “eat what there is or make your own meal”.

She wrote that her relationship with Cyril had allegedly been strained since 2003, and he continued abusing and neglecting her, and that he was “non-transparent”, “irrational” and “immoral”.

The original will made in 2012, stated that her 52,000 equity units in Amarchand Mangaldas, the firm, could be bought out by each brother with the proceeds to be held by a specified charity.

However, importantly, in the codicil to the will made in January 2014, Bharati Shroff stated, according to PC, that she was disinheriting Cyril and his entire family because the above incidents had disturbed her to the core.

PC said that according to the will, Cyil and his family’s arrogance and selfish behaviour crossed all boundaries, and that she had made a holographic will to establish the fact that the expressed intention of hers to disinherit the Bombay side of the family of all shares, movable and immovable property, was not to be doubted.

She was also upset, she wrote, that Cyril had wrongly attributed statements to her, in front of his in-laws (Samdhi), that were accusatory.

PC argued that Goulding and Abraham’s circulation of the board resolution that Bharati’s 52,000 equity units be split equally among the brothers, was the first ever non-unanimous decision of the management board and was meddling with the will and assuming the role of a probate court.

The firm’s CFO, Ashwin Maheshwari, was one of the defendants, explained PC, because the next quarterly profit distribution, which is due to happen on 10 December, should not happen under the 50-50 split but should be frozen, with the profits for the late mother’s 52,000 units placed in a separate account.

14:55 Reconvening shortly at 3pm with both sides hopefully having come to an agreement about the two mediators who can fix this, frankly, rather undignified mess. (If there is anything left to salvage that is other than a separation of the two brothers, possibly Ambani style with certain no-go areas that would no doubt lead to more disputes down the road.)

15:01 Cyril has been very composed throughout the hearings so far, and has not said a word, letting counsel do the able talking. Shardul, we understand, is not present in court, though his wife Pallavi Shroff is.

15:02 Update: A junior rushes into the courtroom and asks for five more minutes time as the seniors are still discussing a way to mediate (or not).

15:06 While you wait, might also want to check CNBC’s The Firm’s Twitter feed (in reverse chronological order), which just published a bulletpoint highlight summary of the first half the proceedings and arguments.

15:26 We’re back.

Iqbal Chagla (IC) is telling the court that they are seeking time to file their reply and to inform the court that mediation is on.

Despite that, complains IC, his learned friend Chidambaram had gone on to discuss the contents of the will, which is being criticised by many. He shouldn’t have done that, says IC.

Cyril talks quietly to his wife Vandana, standing by his side in court.

15:34 Chagla tells the court that both brothers have agreed on one mediator but are trying to figure out the other two mediators.

Chagla tells Justice Dhanuka that he hopes his writing is legible.

Chidambaram quips that Chagla’s writing is always legible.

15:38 Justice Dhanuka has heard no objections to Iqbal’s proposal and tells the parties to enter into time-bound mediation within the framework of the family agreement.

15:43 There seems to be agreement on the Shroff mediators: Investment banker & JM Financial founder Nimesh Kampani was the pick from both sides. Cyril proposed senior counsel Harish Salve, who was accepted by both parties, and Shardul nominated Justice BN Srikrishna, which again both parties agreed on.

15:53 The court ordered mediations to finish by 31 December 2014, and the next hearing for 19 January.

15:56 An update from earlier – apparently, according to PC, the family partnership agreement spells out in great detail exactly what is to happen in the case of the death of either or several of the three family members.

Does anyone have a copy we can see (rhetorical question).

18:13 Update: Just noticed something in our notes that we missed. In closing, Chagla told the court that the Mumbai Shroffs would be filing an affidavit within three weeks showing the “deep involvement” of Shardul in the will.

Looks like this one isn’t over…

18:21 And here’s a tweet from the Indian Express of P Chidambaram leaving the Bombay HC after a hard day’s work

18:51 We’ve just published a short news story summarising today’s hearing with a little foreshadowing in the lead.

Doesn’t seem like the Mumbai side will take today’s allegations lying down.

20:42 The Bombay high court's short order can be accessed here. Something to be said for Bombay efficiency!

1:19 Unlike over the weekend, when only a handful of papers have reported the dispute, after the high court hearing it's all become fair game for the mainstream media and there's a raft of stories. And even TV, with ET Now's suitably breathless coverage, has jumped on the Shroff vs Shroff story.

All said, if you believe any publicity is good publicity, maybe it's doing the Amarchand brandname some good?


As first reported by Legally India on Friday, Shardul Shroff filed three petitions in the Bombay high court, with one probate petition and two petitions against his brother Cyril Shroff, his wife Vandana Shroff, non-family equity partner and management committee member L Viswanathan, external management committee members James Abraham and George Goulding (respectively former senior members of BCG, and Slaughter and May), Amarchand’s CFO Ashwin Maheshwari, and the firm itself.

At issue is the brothers’ late mother’s will, who allegedly granted all her property on her death three months ago, including her at least 22 per cent equity stake in the firm, to Shardul alone. This could have upset the power balance between the two brothers, with Cyril and Shardul respectively managing the firm from Mumbai and Delhi with roughly equal profit shares and control.

Bombay high court photo by Michael Siegel

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