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$34m L&L turnover revealed as Delhi HC won’t reinstate Saraf into Luthra, mediation to go till 1 Nov

Luthra revenues apparently at Rs 250 crores
Luthra revenues apparently at Rs 250 crores

The Delhi high court today did not interfere in the partnership dispute between L&L Partners co-founders Rajiv Luthra and Mohit Saraf, ordering both parties to continue mediating until 1 November, reported Bar & Bench.

Senior advocate Parag Tripathi argued for Saraf in court and tried to convince the court that his client should get access to his firm’s email account again and be reinstated as a partner:

What will be the disadvantage caused to them if I’m allowed access? Of course accounts can be maintained. Luthra is still running the show. Why should I be shut out? It is the money which will be paid to the firm. I’m not taking it.

I cannot suffer a civil death for the purpose of meditation.

Senior counsel Abhishek Manu Singhvi again appeared for Luthra, and said, according to B&B: “It is a strange case where we agreed to mediation. They agreed and no objection was made. Now there is complete rethink and review. They are asking for interim orders on each day after we agreed (otherwise).”

Justice V Kameswara Rao ultimately agreed with Luthra’s side’s arguments, ordering the parties to complete mediation by 1 November.

Rao also noted that if he were to grant interim relief to Saraf, Luthra would have to be given a right of reply, noting:

You argued, they also argued. You said you are ready for mediation, they also agreed. They say they have to file the reply. I recorded that you wanted status quo ante. It was expected that inter se disputes would be settled. To insist upon an interim order.. .you say that I don’t want mediation and I will ask for a reply.

Senior advocate AS Chandhiok, who we understand has been primarily handling the litigation strategy for Luthra, also appeared in court today.

Chandhiok said that if mediation was still ongoing by 1 November, Luthra could file a reply about Saraf’s request to be reinstated.

L&L turnover revealed

Also, in what is the first time that an Indian law firms’ turnover has been formally revealed, the court was told today that the firm had a turnover of Rs 250 crore (around $34m).

Tripathi said in court, according to an interesting comment B&B had picked up in its report: “This is a big firm. It has a reputation and total turnover of 250 crore. All the youngsters will leave the firm. They were handpicked by me. It is for the benefit of no one.”

Clarification 21:02: We have confirmed from a source with knowledge of the figure, as also suggested by Tripathi, that this is the “total turnover” for all the entire L&L Partners-branded firm. This includes all partnerships, including the corporate partnership, tax and intellectual property (IP) and the separate litigation partnership, in which Saraf is also an equity partner but which does not lie at the heart of the current dispute, as well as the separate Mumbai partnership.

Update 21:59: A second source with knowledge of the firm’s finances has confirmed that the Rs 250 crore figure includes the entire firm, across offices.

Update 22:19: Thanks to an eagle-eyed commenter for pointing out, Bar & Bench had live tweeted that Tripathi had said: “This firm was constituted in 1999. The corporate firm has a turnover of over Rs 100 crore. Saraf is doing over 12 cases and corporate restructuring work.”

Update 21:02: This is also of potential relevance to the dispute, in that under the corporate partnership deed Saraf was prima facie entitled to 15% of the firm’s annual turnover on termination. Assuming the corporate firm’s turnover to be around 50% of Rs 250 crore, that could come to around Rs 19 crores ($2.5m) potentially due to Saraf as a goodwill payment; we are not aware of termination provisions, if any, in the litigation firm’s partnership deed.

By comparison, we had reported last year that Khaitan & Co had posted a turnover of at least Rs 610 crores in 2018-19 (around $87m).

That is at least twice of L&L’s, which has a total of around 78 partners across its separate corporate, litigation and other partnerships, and around 322 fee-earners.

By contrast, Khaitan & Co had 127 partners in 2018-19, of whom 91 were equity partners, as well as nearly 600 fee-earners back in 2019.

Since then, Khaitan & Co has grown to 723 fee-earners.

Today's court order

Update 21:02: The court order of today (PDF) read that a new assistant mediator would also be appointed - Aparna Mukherjee - and that the case will continue on 2 and 3 November:

1. I have heard the learned Senior Counsels for the parties at length.

2. In the end, they all suggested that the mediation process be continued and permission be also granted to the parties to make submissions before the learned Mediator for making an interim arrangement / interim settlement. It is ordered accordingly.

3. The learned mediator shall make an attempt to complete the mediation process before November 01, 2020 and file a report before the Court for consideration.

4. For the said purpose matter shall be listed before Court on November 02, 2020.

5. It is prayed by the Ld. Sr. Counsels for the petitioner that if the mediation process fails, the prayers in the Section 9 petition be considered by the Court on November 3, 2020. It is ordered accordingly.

6. This Court also permits the learned Mediator to take the assistance of Ms. Aparna Mukherjee as a co-Mediator. The fee of the co-Mediator shall be fixed in consultation with both the parties and shall be shared equally by them.

Photo by Sohel Patel

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