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Luthra-Saraf mediation proves fruitless, contentious litigation to resume from 6, 9 Nov, then arbitration

Surprising very few people, the mediation between the co-founding partners of L&L Partners, Rajiv Luthra and Mohit Saraf, has apparently yielded no constructive results, as the Delhi high court on Monday ordered Saraf’s Section 9 petition to proceed on Friday (6 November) and Monday (9 November).

According to Delhi high court Justice V Kameswar Rao’s order, Luthra should file a reply to Saraf’s petition by 5pm tomorrow (5 November), after having reviewed a copy of the mediators’ report.

Saraf had originally asked the court to force Luthra to undo his unilateral termination of Saraf, including posting armed guards outside the offices and locking Saraf’s email account.

According to Monday’s order, Saraf’s counsel also requested the deletion all six respondents who were not Luthra (a variety of administrative staff and accounting staff at the firm).

The judge ordered:

To come up for arguments on behalf of petitioner on November 06, 2020 and for the arguments on behalf of the respondent on November 09, 2020.

I take on record that the copy of the report of Ld. Mediator has been filed in the Registry vide diary No.983323/2020. The date of November 03, 2020 stands cancelled.

The road ahead: Potentially long

What this means is that on Friday Saraf’s counsel will again attempt to convince the court that it should restore status quo ante - e.g., declare Luthra’s termination of Saraf ineffective.

On Monday, Luthra’s lawyers will then argue why Luthra had the right under their partnership deed to unilaterally terminate Saraf (which Saraf had contested, claiming that Luthra had actually voluntarily resigned from the partnership).

The court will then pass an order, most likely either declining to pass any interim orders or restoring Saraf to the partnership.

After that, the substance of their dispute and how to separate the two sole equity partners in the corporate partnership would most likely proceed to arbitration, as specified in their partnership deed.

Unless, that result swings things sufficiently one way or another to make either or both parties want to settle rather than continue fighting this through ad hoc arbitration with no clear end in sight (much as the US presidential elections, at present).

Meanwhile, for L&L non-equity partners and fee-earners, the uncertainty continues since Saraf’s purported termination nearly a month ago now, on 13 October.

But at least for L&L fresher hires from college, the long wait will likely be over before the dispute, with most due to join by 12 November).

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