Amarchand Mangaldas Delhi managing partner Shardul Shroff has filed legal action in the Bombay high court against his brother and Mumbai-region managing partner Cyril Shroff.
According to authoritative sources, Amarchand’s Mumbai office was served the legal notice this evening.
Bharucha & Partners is appearing for Shardul Shroff, according to the Bombay high court case status. Bharucha & Partners was started in 2008 by senior Amarchand Mumbai partners MP and Alka Bharucha.
Update: Federal & Rashmikant is representing Cyril and the other respondents, according to the Times of India.
Background
It is understood that the claim revolves around a conflict over the equity division between the two brothers after three months ago their mother, Bharati Shroff, passed away.
Bharati Shroff was the single largest equity holder at Amarchand.
According to sources, it is understood that the partnership deed envisaged her equity to be split evenly between the brothers in the event of her death.
However, it is understood that Bharati Shroff’s will allegedly conflicts with the deed.
We have reached out to Cyril Shroff and Shardul Shroff for comment.
Case status (Update-1)
There is a notice of motion and a declaratory suit, both under the Code of Civil Procedure, with the reference Shardul Suresh Shroff vs Cyril Suresh Shroff, Vandana Vyril Shroff, L Viswanathan, James Abraham, George Goulding, Ashwin Maheshwari and the firm M/S Amarchand and Mangaldas and Suresh Shroff and Co (NMSL/2559/2014 and SL/1072/2014, respectively).
There is also a petition for probate under section 5 of the Indian Succession Act (Law regulating succession to deceased person’s immoveable and moveable property, respectively), filed by Shardul Shroff against the estate of his later mother (TPL/1864/2014).
Viswanathan is a Mumbai-based equity partner and management committee member.
Goulding and Abraham are respectively former partners at UK law firm Slaughter and May and consultancy BCG, who are both part of the firm’s management committee as independent members who commit at least 40 days per year to help in managing the firm.
Maheshwari is the firm’s chief financial officer (CFO).
Amarchand is India’s largest law firm with around 700 lawyers and 86 partners, planning to grow to 1,000 lawyers and 100 partners by 2017.
Management at the firm is split between two regions – Mumbai, and Delhi – with Cyril Shroff in Mumbai overseeing the Bangalore, Chennai and Hyderabad offices, and Shardul Shroff in Delhi managing Kolkata, Ahmedabad and Gurgaon.
The possible crux of the dispute (Update-2)
CNBC-TV18 executive editor Menaka Doshi and founder of the TV show The Firm, has blogged that according to a source, Bharati Shroff held around 22 per cent equity, while each of the brothers held 17 – 18 per cent, with Bharati Shroff having willed her entire equity stake to the elder brother, Shardul.
With the disclaimer that she had not seen the petition and neither of the Shroffs had made a comment, Doshi wrote:
A Family Framework Agreement (FFA) in 2001 apparently codified 3 important principles.
- Branch equality and that no member of the family will act in any way to jeopardise branch equality
- That the Shroff family will vote at all times in a single block
- That, upon her death, Mrs. Bharati Shroff’s interest in the partnership will be divided equally between her 2 sons
I’m told all members of the family were signatories to this FFA and over the last decade the FFA became core to the partnership understanding in Amarchand as the firm expanded, reorganised and brought in more partners..
Mrs. Shroff’s decision to bequeath all her property, specifically her entire Amarchand partnership interest solely to Shardul Shroff is being interpreted as a breach of the FFA and partnership understanding. It apparently prompted Cyril Shroff to distribute her partnership units equally, in an effort to give effect to the FFA. Cyril’s decision to distribute the units equally between himself and Shardul was ratified by the Managing Committee at Amarchand. But Shardul Shroff has interpreted Cyril’s action as inter-meddling with the estate of his late mother, of which he is executor and sole beneficiary.
Hence he has filed a legal suit against Cyril Shroff in the Bombay High Court. At the same time he has also filed his mother’s will for probate.
MSM coverage (Update-3)
Two mainstream papers covered the dispute on Saturday morning. The Times of India carried a short article, reporting that Cyril Shroff has instructed Mumbai firm Federal & Rashmikant (hat-tip @superselector5 on Twitter).
The Economic Times in a detailed article, rich with apparent insider info, had a comment from Cyril Shroff:
I will never initiate any legal action which is public in nature, as it impacts the family and firm’s name. I have not yet decided as to whether I am accepting the will or not. We are more focused on our clients, partners and people working with us, and for them there will be business as usual.
An Amarchand Delhi spokesperson told ET that “this is an internal family matter and we do not wish to comment on such issues”.
The ET wrote that the the brothers’ jointly held around 60 per cent of equity in the firm and that a 1994 agreement between the family envisaged equal division of the late Bharati Shroff’s equity stake. Bharati Shroff also held a stake in the firm’s Delhi offices, held by a separate company, which was willed to Shardul.
According to ET:
The petition, which was filed on Friday, is the denouement of a dispute which has simmered for months and had become common knowledge in Mumbai’s corporate, banking and legal circles. Two of India’s top bankers and a number of top industrialists are said to have acted as mediators in an attempt to resolve the matter. These attempts appear to have failed, at least for now…
The ownership dispute has been discussed by members of Amarchand Mangaldas’ management committee, according to people familiar with the matter. Two independent members (the committee has seven members in all), George Golding and James Abraham, recently moved a resolution that there cannot be ambiguity in the ownership of the firm and on principle of equality, Bharti Shroff’s shares should be distributed equally between the two managing partners.
They also contended that family matters should not have any consequence for the firm. Sources said the resolution, which was circulated over email earlier this week, was passed 5:2 in Cyril Shroff’s favour. Cyril declined comment on the resolution.
MSM wave 2 (Update 4 & 5)
Two further mainstream publications, the Business Standard and the Indian Express, covered the dispute late yesterday and this morning, respectively.
The Express reported that the first hearing in the case is scheduled to take place in 14 days.
However, the cause list for the Bombay high court has listed it as the sixth matter on Tuesday, 18 November, in court number 8 before Justice RD Dhanuka (hat-tip @ProphetRafiki on Twitter).
Update 1: Case details added.
Update 2: Meenaka Doshi blog post added
Update 3 (15 November 10:21): MSM coverage details added
Update 4 (16 November): Express coverage and hearing in 14 days
Update 5: Corrected: Next hearing on Tuesday
Comments
Perhaps its best they go their separate ways. There is no way the next generation of the two family branches can manage the firm's affairs jointly in future.
Right now its a bicycle, for the next generation, it would become a tractor with 5 or more tyres. Over the next two decades the family bus would have had 9 tyres and steering wheels.
Probably for the best.
Moonshot-
If it splits and bombay amss decides to open up delhi office (hopefully not in gurgaon), it will be a nice new option in Delhi.
You, brother mine, that entertain'd ambition,
Expell'd remorse and nature, who, with Sebastian-
Whose inward pinches therefore are most strong-
Would here have kill'd your king, I do forgive thee,
Unnatural though thou art.
(William Shakespeare)
Civil Suit No. S(L) 1072 of 2014, Notice of Motion NMSL 2559/2014 along with Testamentary Petition No TPL/1864/2014 before the High Court of Judicature at Bombay.
Advocates on Record of Shardul Suresh Shroff: Baruch & Partners
Fun times.
Although would have preferred the matter before Gautam Patel J. !!
Ha ha ....
Achche din aane wale hain.....
God Bless India
How can Lalit Bhasin intervene in what is clearly a family dispute matter, you moron??
How can Lalit Bhasin intervene in what is clearly a family dispute matter, you moron??[/quote]
Clearly you don't have taste for sarcasm.
Cyril sues Shardul!
KCO & JSA... Good times!
Cyril sues Shardul!
KCO & JSA... Good times![/quote]
Shardul sues Cyril and not the other way
JSA is down.
Khaitan with its perseverance becomes leader of the pack.
Legal market opens up.
Not an unfair question and I think the smaller firms (not just the ones mentioned) will keep growing in their areas of specialisation.
but have worked with BCG and the likes. their billings would put lawyers to shame.
having said that, at this level, money will not been the main issue. So yes, sympathies and best wishes for the new bentley to the consultants.
Although there were no family relations among them!!
maybe as an anony blog ?
Hope there is still a chance of not splitting the Firm. Hope they still can salvage this and go back to sanity.
Hope there is still a chance of not splitting the Firm. Hope they still can salvage this and go back to sanity.[/quote]
Spare us with your emotional atyachar!
But seriously, I think it's far too early to conclude they will definitely split.
The possibility that they will split is real of course, but so is the pragmatism that has kept the bicycle working so long and as well as it has been.
I think the split is imminent now, given that the publicity this issue has got. Its just a matter of time. RIP AMSS
Wooohooo! Foreign law firms will come in now!
Wooohooo! Foreign law firms will come in now!
Very happy at this news. May all such feudal family law firms fall apart.
I want more than a drink. May be, a part of the equity that they are fighting over!
For those who are ready to talk a little bit of sense, I think it's far too early to write off the Shroffs, let alone Amarchand. Warts and all, they have built an institution that is nearly unrivalled in the market.
The brothers are also too shrewd and have smart enough people around them to just throw all that away.
Granted, the bad blood runs deeply, but my guess is that common sense will ultimately prevail here.
1. I hope you are right.
2. I have neither any information nor any knowledge of the facts other than what's been reported by Kian and Menaka.
3. I am not from Amarchand.
Here is why I think a split is inevitable now:
The dispute is about stake in the partnership and if Shardul gets 22% more he will be at 40% to Cyril's 22%. It's common knowledge that Mumbai region (Mumbai +Hyderabad + Bangalore) contributes much more to the revenue than the Delhi region. If Shardul gets the injunction today or on Monday, then essentially Cyril will be earning most of the money and yet he would have to give Shardul 22% more than what he can give himself. Why would he do that? Even for a single day. Any invoices outstanding which come into the firm now will actually be subject to a dispute. So, Cyril, the smartest of them all, shouldn't be expected to expose himself to the situation.
Will be surprised if Cyril doesn't split the Firm before Monday and makes sure that no client pays any more money into the existing Firm.
Hope it doesn't happen but it looks inevitable and imminent.
"Lawyers need to know shroffs... Indian lawyers need to know when are you filing some winding up petitions...:p"
trolling without reading or understanding. *more slow clap*.
More options for Junior lawyers. Rise. You have a chance to get out of the trenches. Your time has come.
Cyril is on the ascendancy because of the Adanis and Modi etc.. Shardul had his time with PNB [...] - but has no 'real' political clout left (no point in being a Trustee on an Ex-PM's Trust, eh?!?).
So, please read the writing on the wall, Big Brother!
As for your whispering to Horse/s, only a Donkey would find the "not be good for the legal profession in India" appealing..
but here's a doubt.
Law is many times about things apart from justice and who gets it.
The interpretation of the relevant partnership clause would affect all partners perhaps.
The legal relationship if any between the family arrangement and partnership deed is not known to us. Perhaps the partnership deed acknowledged and accepted the over-riding applicability of the family arrangement. Though this is unlikely. The family arrangement might not have been disclosed to non family partners.
I am starting to wonder if non family partners could claim a part of Bharti Shroff's equity.
I by the way am the lawyer who commented earlier that I had the best legal brains in the country.
Now the question is does the partnership agreement contain adequate guidance on who will get Bharati Shroff's share or is it silent? Does the Family arrangement specify this? Is the family arrangement binding on the surviving partnership?
If the partnership agreement does not specify how Bharati Shroff's share will be divided, then all partners (family and non family) might be entitled to a proportional share. Hows that?
The interpretation of the relevant partnership clause would affect all partners perhaps.[/quote]
Wo sab to thik hai bhai saab par aapne law kahan se kiya hai?
But except for a few good teachers, I consider myself self-taught, recall reading British law text books from British Council library during LLB years, and then taught myself on the job
Good brain, good language skills, clear thinking, good comprehension, enjoy reading, so law khudi seekh liya.
Am now the smartest legal brain in the country. Always was.
Actually the Hindu law teacher (one Mr Gupta, i think) was also good.
A few teachers were average & boring, [reading from copious pre-prepared notes which everyone else copied down in class (but not me)], though they did not make fools of themselves.
The rest were jokers, the IP law classes had me in splits for things like "loin" instead of "lion".
Actually the Hindu law teacher (one Mr Gupta, i think) was also good.
A few teachers were average & boring, [reading from copious pre-prepared notes which everyone else copied down in class (but not me)], though they did not make fools of themselves.
The rest were jokers, the IP law classes had me in splits for things like "loin" instead of "lion".[/quote]
Why are you tooting your own horn?
the only person who has [made a mistake is Bharati Shroff]. why have such random contradictions between will and agreement. From that moment this was bound to happen, as will the split eventually now (as there will be loss of face for shardul if he settles, and loss of revenue for cyril if he doesn't).
One day its Salve, or Cyril, or Nariman, or Zia etc etc etc
Just that they are low profile and don't go about promoting themselves aggressively ..but brilliant nonetheless.
Cyril challenges will. Framework agreement overrides will. Framework agreement enforced- 22 pc split bw the two. AMSS remains one in name. with distinct partnerships with the minimal cross partnership to retain nexus. This cross partnership will be structured in some way without any voting rights. Geographical practice to be retained. No/minimal referrals. No one opens an office in others city but free to do matters or approach clients. Goes back to pre-BCG era. Mumbai does better than Delhi and for obvious reasons.
#justsaying
and best person indeed. Must know that partnership deed inside out.
MP is like Vibhishan", Ghar Ka Bhedi Lanka Dhaye....
AB to MP: Oh wow! whose the client?
MP: Hildul
AB: cough cough! what!! Sadhubaba?! whats he coming to us for? Be careful, it must be a ploy!These Shroffs I tell you!
MP: Dont worry, us hildul ko maine (h)alka mein nahi liya hai! S is suing C!! Evil laughter!! For their equity! haha, the one which we had! par gabbar ne mere haath kaat liye!
AB: Ok..koi nahi...Jai aur Veeru ko bulate hai...oops, Jai to chala gaya! Par Veeru kaun banega?
Scene 2: Junior B enters Justin to the scene.
JB: Mein banunga Veeru! Mein aapke khoon ka badla lunga! (does the chandler dance)
MP: AB Darling, can someone get me my cigar?
AB: Oh come on! lets uncork a champagne! Ajj MPuing
MP: How about some apple pie to go with that?
VPB: I'm so done with that pun! Uggh..
(curtains)
Ambani brothers fight did not affected to Reliance's growth and story will get repeated for Amarchand as well. At Amarchand also Growth is Life.
Wasn't there news sometime back that Shardul was planning some international arbitration center in delhi? May be he realized the pitfalls of it all
Yes, what is happening at Luthra? Why are things so quiet at that end?
Just like that --- seems to be the fashion here.. troll luthra
Just like that --- seems to be the fashion here.. troll luthra[/quote]
Why are we trolling Luthra all the time?
The bad news for the rest of the top firms is that the two Amarchands are going to furiously undercut each other, driving down fees for the rest as well. At least in the short term.
then that Jain chap will do a Truth or Hype on SSS's Congress connections and Cyril's Sangi roots!
That a client of AMSS has advice for the Shroff brothers brings them full circle. Go elsewhere!
both AMSSes, post split would fill themselves with sycophants.
What makes you think that a split would breed merit ?
I wonder again - greed, for a lack of better of word, is good.
I think a complete split would be better for both - and the profession - contrary to what people here have commented that the split would lead to the end of "feudal" culture and what not?
Even seven decades of independence has apparently not reduced one bit, the proclivity of the Indian to lie prostate before the firang. For these pathetic creatures salvation lies in entry of foreign firms.
I hope those firms do come...and these paralegal coolies attain nirvana - like the techno-coolies have in IT.
The problem is that law firm quality is individual specific because quality across law firms is patchy. So you either go for a big brand (in the hope that you will get a good lawyer) or you go for a specific individual (and hope and pray that he does some work or at least keeps himself informed about what is going on instead of just dumping it on someone else after attending the first few meetings).
Usually, a bigger brand means quality across the firm is less patchy. Usually. That's the hope.
Unfortunately, there are too many incompetent people in law firms across the country (even at partner level). Sad, but true. So, as the adage goes, you, "pays your money and you takes your chances".
Lets hope the Brothers maintain dignity and the preserve the Institution that they built so painstakingly in the last two decades. And I am confident, THEY WILL.
Dear Stats guy,
Please use COME ON instead of "common".
Thanks,
Common Sense
Sharduls is pc Rohit kapadia navroz
Should be fun
A juicy fight and lots of entertainment for all
The entire legal fraternity is backing him
As is most of corporate India and general public
Good luck Cyril ? Everyone is with you . Fight this injustice from a mean older brother
Or isn't it the situation that Cyril is disrespecting his mother's wishes.
We have properly crossed into personal territory now.
Whatever it is, this entire scene is going to be a market changer.
'What did you do in your lifetime'.
'i was a partner at india's largest law firm'.
The pan wala outside peninsula won't know their names.
Second line of thought, if the will actually prevails, will cyril's lieutenants actually stay with him if he doesnt have the amarchand name. Where does that leave cyril?
Btw, how are the wives taking it?
To respond, untill consummated, an agreement to gift (presumably that is what you are suggesting the FFA to be) continues to be in the domain of contract law. Ttherefore section 37 of the partnership act may apply to this situation (I may be wrong!).
Or the firm should sack him
Even the firms worst enemies could not do as much damage as he has caused to its reputation
the rest of your comment is also very off. But its okay. LI ke liye theek hai.
Its incredible that a law firm could air these things publicly. Can this be resolved without a split?
Read more at: http://www.moneycontrol.com/news/current-affairs/amarchand-mangaldas-dispute-the-caseshroff-vs-shroff_1229816.html?utm_source=ref_article
ITEM NO.24 REGISTRAR COURT. 1 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
BEFORE THE REGISTRAR PANKAJ BHANDARI
Petition(s) for Special Leave to Appeal(C)No(s).17150-17154/2012
BAR COUNCIL OF INDIA Petitioner(s)
VERSUS
A.K. BALAJI & ORS. Respondent(s)
Date : 21/08/2014 These petitions were called on for hearing today.
For Petitioner(s)
Mr Aviral Shukla, Adv.
Mr. Ardhendumauli Kumar Prasad ,Adv.
For Respondent(s)
Mr P.V.Saravana Raja, Adv.
Mr. Bijoy Kumar Jain ,Adv.
Ms Neha Agarwal, Adv.
Mr. E. C. Agrawala ,Adv.
Mr. Hari Shankar K ,Adv.
Mr. Nikhil Nayyar ,Adv.
Mr. Rakesh K. Sharma ,Adv.
Ms Tine Abraham, Adv.
Mr. Sakya Singha Chaudhuri ,Adv.
Mr. Subramonium Prasad ,Adv.
Mr Robin R David, Adv.
M/s. Dua Associates ,Adv.
Ms. Meera Mathur ,Adv.
UPON hearing the counsel the Court made the following
O R D E R
Despite undertaking given on 1.7.2014 vakalatnama has
not been filed on behalf of respondent Nos. 22, 29 and 36
though counter affidavit has been filed by the earlier
counsel.
Service is complete on the remaining respondents.
Signature Not Verified
Let the matter be listed before the Hon'ble Judge in
Chambers.
Digitally signed by
Hema Joshi
Date: 2014.08.23
12:51:13 IST
Reason:
(PANKAJ BHANDARI)
Registrar
Btw, lets not paint Shardul as the evil elder bro : that is nonsense. He is trying to enforce a valid will and that doesn't suit Cyril! (Just fyi, Del ofc earns more revenue than Mum - not sure what the pic is on a consolidated basis tho, i.e., with other offices in the region.)
And yes, I agree with Curious Cat. AMSS (and all the Big 6 law firms) have some very ordinary partners and lawyers who can simply not justify the sky-high fees. For every outstanding lawyer, AMSS (both Del and Mum) has some supremely ordinary ones. Hence, a lot of clients are shifting to smaller firms : the likes of TTA, S&R, UUA, Platinum, Phoenix etc...in the hope of getting individual attention from the partner. Makes sense to me!
Also both brothers should get ready for a new firm . New offices? Lots of recruitment all around . The industry will change shape again in a fundamental way
Sisterly advice: Unless you are aching for money try elsewhere. If you are aching reaaaaaalllly bad try KCo, they pay better.
They should. Do it ASAP . Also m p Bharucha will ensure it does even if the brothers do not. . Revenge for him ( and of course utter lack of ethics)
I do not think that MP actually needs to learn ethics from the Shroffs...
1. It seems SSS went to court only after CSS got the firm MC to divide the equity in half against the will.
2. Post Harry Chawla, Delhi region hadn't nominated his replacement in the MC. That seems to hurt Shardul.
3. The Delhi office actually earns more. So Bombay earning more is not really correct.
Anyway, this has the making of a great legal battle.
Winner number 2 foreign law firms ( their entry is now certain)
Winner number 3 clients as there will be more competition and intense price pressure
Loser no 1 Shardul for being established as the prize fool we already knew he was
Loser no 2 BharatiShroff as she will be remembered very negatively . A career wiped out
Loser no 3 Amss
Loser no4 Cyril for destruction of his dream and as someone who his family hates
It's a side show but just shows him in very poor light
Anyway.............
Back to the point, nothing prevents an advocate from litigating a matter where he is not a beneficiary- there is no lack of ethics
Talking of professional ethics- [...]
Those of us who know MPB are appreciative at least of the fact that Justin had to go through the grind and not immediately get established in a cabin-
Mr. Realistic, please spend some time with your law books, you really need to. I wont stoop to the level of calling you an idiot or any such thing- thats self evident...
I'll have my popcorn ready. Oh wait, I think I would be sleeping at that time :p
I often do long for the days of London BigLaw and it's more humane working hours... ;)
We are just revising our business plans
Signed
Zia Haigreve rajiv Rohit Ajay tri legal nishith etc
he can't swoop on your phones - citrix doesn't take over the system - go ahead and keep spilling
It must have been a terrible decision for her. [...] So much for family and values.
On a separate note, I believe it was high time that the cycle learnt from the non family driven firms. So unprofession.. and to guise it under all that cog-wheel nonsense! This baniya shop culture in the face of globalisation won't work. If nothing else, learn from the downfall of the Congress! Rather than promoting your own version of RaGa.. anyone notice the uncanny resemblance!
Thank god I'm not a lawyer. Lawyers are such idiots!
http://www.hindustantimes.com/india-news/bhopal/bhopal-kapil-steals-show-with-7-medals/article1-1286683.aspx
The Ad-interim is to probably prevent Cyril from disposing of property till the suit is adjudicated. That's tomorrow. The real thing to watch is the probating of the will. Cyril needs to protest the will if he is to get his share. Other issues will arise is under Family Law, was the property held by the Late Mrs. Shroff actually hers to will away or was it common property. Another key element would be the Family Agreement, if the family agreement provided for a manner of partitioning shares, was her will even valid? As in were the shares free from encumbrances at the point they were willed to the Mr. Shardul Shroff. Interesting questions of law in this. Very interesting questions.
More importantly, tomorrow if C.Shroff appears before the HC and undertakes that the suit property won't be disposed off until the matter is settled or adjudicated upon, I'd have to look far to find a judge why would not take C.Shroff at his word and issue the injunction notwithstanding.
2. Status quo will be maintained and in the process there would be two firms in the very near future .
There is enough and more for both sides . Matter being in Bombay will take for ever to decide .
But will bea fun spectacle