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Mumbai source: Post ‘black Tuesday’ Amarchand break-up now most likely outcome after Zia, Birla, Parekh failed mediation before

A tale of two cities (Mumbai left, Delhi right)
A tale of two cities (Mumbai left, Delhi right)
The dispute between Amarchand Mangaldas managing partners and brothers, Shardul Shroff in Delhi and Cyril Shroff in Mumbai, would most likely result in a split of India’s largest law firm into two separate entities, said an authoritative source with close knowledge of the Mumbai side of the dispute.

“It would not even be wise to have a pretence in such a situation. Even if they do agree to go on together for a while, it would not be more than six months that they would be fighting again. Sometimes to part ways is the best,” said the source, who has close knowledge of the current state of the dispute but declined to be identified because the matter was sub judice.

“Maybe time will prove to be a good healer and on a personal front things will improve and restore to normalcy if they work separately. But the split of the firm in two firms seems the only way out with the direction in which the mediation is headed now.”

Several months of protracted mediation attempts between the brothers preceded Tuesday’s Bombay high court hearing, with unsuccessful mediators between the brothers having included HDFC chairman Deepak Parekh, Aditya Birla Group chairman Kumar Mangalam Birla, as well as AZB & Partners Mumbai managing partner Zia Mody.

Mody did not respond to an email seeking comment.

In court the parties eventually agreed on three new mediators to oversee their talks until 31 December: senior investment banking guru Nimesh Kampani, Shardul’s nominee ex-Supreme Court judge Justice BN Srikrishna, and Cyril’s nominee of senior counsel Harish Salve.

In Justice RD Dhanuka’s court on Tuesday, Shardul’s counsel P Chidambaram read out the contents of the will of the brothers’ late mother, Bharati Suresh Shroff, alleging ill treatment and neglect by Cyril during her lifetime, allegedly citing that as one of the reasons she disinherited the Mumbai side of the family in her codicil prepared in January 2014. It is understood that the mother prepared and video graphed the holographic will at the Deutsche Bank office in Mumbai.

Senior counsel Iqbal Chagla mentioned before the court that there has been suppression of material facts in the case and that they would file their reply before the court detailing how Shardul was “deeply involved” in making of the will.

According to several Mumbai sources, a number of Amarchand lawyers had blacked out their Blackberry or other instant messaging profile pictures as a sign of the prevailing mood in the firm, with one source calling it a “black day in the history of the firm”.

If a split were to happen, the logistics of disentangling multiple partnership firms, profit shares and books of business will not be easy. One Mumbai source did not believe that a split after mediation could include any non-compete provisions as had occurred in the will dividing the Ambani conglomerate between two brothers, and that therefore the two potential Shroff firms could compete for work and talent head as any other rivals.

Managerially and structurally, the around 700-lawyer and 80+ partner-firm is split between two regions – with the Mumbai region including the Bangalore, Chennai and Hyderabad offices, and Delhi containing Kolkata, Ahmedabad and Gurgaon.

Shardul and Pallavi Shroff in Delhi did not respond to an email seeking comment; Cyril and Vandana Shroff in Mumbai declined to comment when contacted.x

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