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Read the Shardul Shroff WhatsApp transcripts advising CAM Chennai team on exit strategies (but denies inducing them to do so) [UPDATE-1]

Did Shardul Shroff induce CAM Chennai to break their contracts over WhatsApp or was it just sound advice?
Did Shardul Shroff induce CAM Chennai to break their contracts over WhatsApp or was it just sound advice?

According to the allegations in the Bombay high court section 9 petition against former Cyril Amarchand Mangaldas (CAM) Chennai partner Dorothy Thomas, Thomas “in direct collusion with” Shardul Amarchand Mangaldas instructed associates to “extract confidential files” of CAM’s “in a systematic and pre-planned manner” from 26 September before she and her team had resigned from the firm.

When asked for comment on Saturday (15 October), Shardul Amarchand Mangaldas chairman Shardul Shroff, who is not a party to the petition, denied the allegation, saying that he had insisted that “no original documents or records, whether pertaining to litigation or transactions, was either consciously or inadvertently left in the possession of any lawyer who resigned. I had mentioned this for their own protection.”

Thomas and CAM managing partner Cyril Shroff declined to comment, with Thomas noting that the matter was subjudice and settlement talks were continuing.

The petition notes that on 3 October (with Thomas not yet having resigned), CAM “all of a sudden, received resignation letters” from Thomas’ team, which were “synchronized and identical in form and substance, were in the flagrant breach” of their CAM retainership agreements, and purported to take effect immediately “without following the 2 (two) months notice period”.

Thomas, allegedly “contemporaneously upon receipt of the said resignation letters” sent an email to CAM management representatives “feigning ignorance and helpless (sic) and asked the representatives for help”. CAM, according to its petition, responded by “rushing” partners to Chennai to convince Thomas’ team members to “serve their contractual notice periods”.

On 4 October, CAM discovered “files and vast amounts of confidential information belonging” to CAM, had allegedly been removed from the office, leading to protracted negotiations between Thomas, her team and CAM. Thomas denied that she had taken any files, according to the petition.

Thomas, according to the petition, “resigned with immediate effect” from CAM late on 5 October.

Nine cardboard boxes and some loose files and folders were allegedly returned by Thomas’ driver to CAM’s Chennai office on 8 October, after negotiations between the parties.

The WhatsApp conversations

Shardul Shroff has responded to us with a detailed emailed account of his perspective of the dispute, noting that he was only giving guidance to Thomas and her team who had approached him, after the “oppressive behavior by the management of CAM who had decided to shut down the operations of the Chennai office within 1 month, without in any manner thinking or caring for them”, threatening not to pay departing lawyers pro rated bonuses and increased salaries despite the office having met its targets.

He added: “I have not, and have never asked anyone of Dorothy or her team to leave CAM nor have I induced them in any manner.”

The petition cites purported WhatsApp conversations between Shardul Shroff and Thomas and her team, in which Shroff apparently counsels them on the best strategy on how to resign en masse, sending them a draft of their resignation letters, and exhorting them to secretly conduct “intense preparations” for departure and to keep discussions “totally confidential till the resignations go in”.

Shardul Shroff also advises Thomas and her team on WhatsApp to “keep them [CAM] guessing what will hit the press” by avoiding a video conference call with CAM partners L Vishwanathan and Arjun Lall, who would “fear… that you will speak to the press” and attempt to “brainwash” the team by “trying to remove a grievance to get bragging rights that the team left for extraneous reasons”.

We have not been able to confirm the substance of allegations that CAM had said it would not pay increments and pro-rated bonuses to the Chennai team, but it appears from the WhatsApp transcripts that CAM communicated that it would pay dues to associates around 3 October, after which Shardul Shroff wrote on WhatsApp: “He [Vishwanathan] will bind to team to sign a settlement with Camco not to speak. You need that market advantage that they announced closure and terrorised the associates by saying no appraisal and no arrears. Don’t give up that advantage. All of you consider my views and message me your views and instinct on this sudden white flag. Sau Chuhe kha ke billi Haj ko chali! [Hindi proverb: acting nobly now does not absolve hundreds of prior sins].”

He advises the team to engage with CAM in writing instead, and that the basis of their “unprecedented collective action” of resignations without notice took place under the principle of “anticipatory breach of contract”, due to CAM having “failed in their duty to pay arrears, give appraisal and bonus”. However, he cautions against an alternative approach apparently suggested by an associate (but not included in the petition), which CAM “will turn around and twist this and say it’s blackmail by the team. They will try and play victims instead of the wrongdoers they factually are”.

Shardul Shroff on WhatsApp appears to counsel Thomas and her team in detail on the public relations perspective in exit negotiations with CAM, saying that “they will try to turn the tables on you to look good in the press. A whole office resigning is unprecedented. Don’t loose its impact”. Shardul Shroff also advises them to use as leverage in the CAM exit negotiations the threat that a notice by CAM would “leak to legally india” and that the “whole world will know how badly they have behaved”.

Excerpts from CAM’s petition and Shardul Shroff’s responses

We have re-published unredacted excerpts from CAM’s petition, a copy of which we have obtained, and Shardul Shroff’s responses below, in the order they originally appeared in the petition and Shroff’s response. However, we have split up the petition and responses for readability purposes and to roughly correspond to respective allegations, sections and chronology.

CAM’s petition against Thomas alleges:

Shardul Shroff commented:

As you are aware I am presently overseas in the middle of marriage festivities. As you are further aware, neither Shardul Amarchand Mangaldas & Co (SAM) nor I are parties to the proceedings filed by Cyril Amarchand Mangaldas (CAM) against Dorothy.

I am not aware of the context in which purported whatsapp messages have been produced in the Section 9 proceedings. I would like to repeat and reiterate that I have not, and have never asked anyone of Dorothy or her team to leave CAM nor have I induced them in any manner.

The petition then alleges:

Shardul Shroff denies that he colluded to documents being removed from CAM, but had only guided the team on issues related to their resignation, upon request. Shardul Shroff commented:

Dorothy and her team had approached me after they had decided to leave CAM on account of the oppressive behavior by the management of CAM who had decided to shut down the operations of the Chennai office within 1 month, without in any manner thinking or caring for them. In view of CAM’s decision to close down their Chennai operations, these lawyers wanted to pursue their legal careers with SAM.

It is the Chennai team that sought my guidance on issues of their resignation etc which I guided them on.  They had decided to leave and I insisted that no original documents or records, whether pertaining to litigation or transactions, was either consciously or inadvertently left in the possession of any lawyer who resigned. I had mentioned this for their own protection.

You have sent to me unconnected paras 4, 5 and 6 from what you say is an extract of the Section 9 application between CAM and Dorothy. The allegations made in the said paragraphs relating to SAM or me personally are totally false and incorrect and I am sure that Dorothy in her reply to the proceedings will bring the true facts to light.

The petition then cites extracts from a WhatsApp group ostensibly created by Shardul Shroff with Thomas and her team, called “Dorothy team” and “SAM Joinees” created from 26 September 2016 to allegedly “mastermind the whole criminal operation like a general” (underlined emphasis added by CAM in its petition to the WhatsApp transcripts):

Shardul Shroff commented on Saturday (15 October) to Legally India, that he only responded to Thomas reaching out to him to join SAM Chennai, after CAM decided to close the Chennai office and focus only on Mumbai, Delhi and Bangalore. Shardul Shroff also commented that CAM had denied the team increments and pro rata bonuses (CAM denies this elsewhere in the petition, claiming that the firm had offered Thomas and her team pro rata bonuses and increments):

I had advised you yesterday “you would indeed be curious to receive off the record background about why CAM came about the situation of en masse leaving, but I did not want to comment since I was not a party nor SAMCo a party to the proceedings.” I had also told you that settlement talks between CAM and Dorothy were on going and my talking at this stage would not be appropriate or helpful. However, I need to set the record straight for myself.

On the 24th of September 2016, Dorothy and her colleagues, intimated to me their desire to en masse leave CAM as:

(i) since mid-August, Cyril Shroff, Vandana Shroff, L Vishwanathan and Arjun Lall had communicated to her and her entire team that the management had taken a decision to shut down the Chennai operations with a view to concentrate only on 3 offices of Mumbai, Delhi and Bangalore;

(ii) despite their having exceeded their targets for a 6 month period, CAM had not reset their retainers and salaries, not promoted the retainers and not paid pro rata bonus for the extra ordinary performance; and

(iii) she was unwilling to run a solo operation which involved financial obligations 4x beyond her livelihood and the associates wanted to work with a known brand. Dorothy expressed that at meetings in Mumbai, they had already been told that if they did not fall in line, they would be given one month’s notice and asked to leave.

She expressed that her entire team was with her and that they would like to speak with me on Sunday (25 September 2016) via Skype.

I was informed of the aforesaid facts during a Skype call on 25th September 2016 on which all entire Chennai team participated. They expressed that they were very disappointed with the management of CAM unilaterally deciding to shut down the Chennai operations, without concern of the fact that the market had been single-handedly developed by their team. They informed me that they had decided to participate on the Skype call as each of them had already decided to leave CAM and wanted to explore their options with SAM, which had just opened its office in Chennai.

Shardul Shroff further commented that he had insisted that the “process of handover must be orderly” and all assets should be returned to CAM, and phone numbers on firm-provided mobile phones should be copied onto their personal phones:

On the Skype call, each of them expressed that they would tender a joint resignation to CAM, however, since there were individual retainerships with CAM, individual letters of resignation had to be issued. In this context, the Chennai team sought my guidance on termination of the retainerships and arrangement with CAM and to that extent I guided them. Further, unless they had resigned on the basis of what they had narrated to me, the question of providing them a retainer at SAM would not have arisen.

On the call they expressed their strong desire to join SAM and requested for draft retainership agreements.

I had clearly indicated that this process of handover must be orderly and every single asset that was in the custody or control of the individual lawyers should be made over to CAM. Since they had official mobile phones that had to be surrendered upon their suo moto resignation from CAM, they were requested to copy their phone directories on their personal phones.

I believe that on 3rd October 2016, all the Chennai associates who had decided to leave CAM before they reached out to me, tendered their resignations and I am told by Dorothy that she had told her Bangalore colleagues to come down and take possession of the Chennai office. I further understand that on the 4th of October, Dorothy met Arjun Lall, Arun Prabhu and another partner of CAM. She handed over what was delivered to her by her associates.

In my communications with all the lawyers who had decided to leave, I had clearly exhorted them to ensure that no original documents or records whether pertaining to litigations or transactions is either consciously or inadvertently left in their possession, as I did not want anything from CAM.

The petition quoted the following additional WhatsApp messages from Shardul Shroff, referencing CAM senior partner L Vishwanathan (Lvv), Bangalore-based South India head Arjun Lall (Arjun) and a video conference (VC) scheduled between them and Thomas:


Shardul Shroff commented:

I was informed by Dorothy that, at 7.30AM on the 5th of October she had received a threatening e mail from Cyril intending criminal action against her. I do know that Dorothy tendered her resignation on the evening of the 5th of October, due to the events that occurred on 4th and 5th of October with immediate effect as she was being severely harassed. I am unaware whether CAM has filed the e mails of the 5th of October between Cyril and Dorothy in the proceedings.

I am indeed surprised at CAM’s management intimidating a single mother who headed their office in Chennai, and who is pursuing her career elsewhere after CAM’s decision to shut down their Chennai operations.

I trust this clarifies the circumstances of the en masse exit from CAM Chennai.

The CAM petition’s WhatsApp transcripts conclude with:

Read the full section 9 petition here

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