BackAmarchand Mangaldas row ends in amicable break-up
HC accepts arbitral award reached after six months' mediation between brothers Cyril and Shardul Shroff
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Mumbai: It’s official. The Bombay high court on Wednesday gave its approval to the break-up of India’s largest law firm, Amarchand and Mangaldas and Suresh A. Shroff and Co. The court accepted the arbitral award arrived at after almost six months of mediation between the firm’s managing partners, brothers Cyril and Shardul Shroff.
Justice Gautam Shirish Patel allowed the suit brought in November 2014 by Shardul Shroff against his brother to be withdrawn after Cyril Shroff filed an affidavit saying he would not contest some parts of their late mother’s will.
“The two branches of the family have agreed to split and bifurcate into separate entities, independently carrying on the profession of law," according to a statement issued by the mediators, JM Financial founder Nimesh Kampani, senior counsel Harish Salve and former Supreme Court judge B.N. Srikrishna.
It added: “With a view to preserving the fair name and reputation of the family, and in order to foster peace in the family, Cyril Shroff agreed not to contest and agreed for grant of probate to the will and codicil of his mother, Bharati Shroff, irrespective of whatever grounds he may have had to contest the will and codicil, and Shardul Shroff agreed not to press the suit, in view of the family settlement and arbitral award."
The mediators said the brothers had entered into a detailed family settlement to divide “family properties, professional practice and allocation of assets".
The settlement was achieved “in no small measure on account of the spirit of accommodation and keenness displayed by all the contending parties, and their belief in the need to compose amicably their differences and to arrive at a family settlement that would maintain peace and cordiality among the members of the family", the mediators said.
The protracted mediation began after a Bombay high court hearing on 14 November 2014 at which senior counsel Iqbal Chagla and law firm Federal Rashmikant represented Cyril, and senior counsel P. Chidambaram and law firm Bharucha and Partners acted for Shardul.
The dispute between the two brothers relates to a June 2012 videographed holographic will of Bharati Shroff and a January 2014 codicil, a document that amends a previously executed will. In those documents, she willed her entire assets and equity in the firm to Shardul.
Cyril claimed that the firm’s equity was not hers to bequeath, as the family’s equity holdings were governed by partnership and family framework agreements. Shardul insisted on the will’s primacy.
Bharati Shroff, who died in August, was the single largest shareholder of the law firm, holding a 22.5% stake, according to court filings. That represented 52,000 units or shares worth about ₹ 7.4 crore.
According to Bloomberg data, Amarchand Mangaldas was India’s top law firm in 2014 in terms of the value of deals in which it was involved as a legal advisor. During the year, it was part of 61 deals (mergers and acquisitions) that had a combined value of $17.52 billion, representing nearly 35% of all deals in 2014. Another law firm, AZB and Partners, managed more deals—80—but the cumulative value was less than that of Amarchand Mangaldas. Khaitan and Co. and J Sagar Associates managed 51 and 55 deals, respectively, in 2014.
“Till about 2pm today, it (Amarchand Mangaldas) was India’s biggest law firm. The goodwill of the law firm gets impacted by such splits. Clients will definitely consider whether the firm will still have the power to pull off big deals like it did earlier as the network has now shrunk. Both the brothers have already started poaching lawyers to build their respective firms. One will have to wait and watch how things unfold based on the terms of the mediation," said a Supreme Court lawyer on condition that he was not named.
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