The brothers managing India's largest law firm Amarchand & Mangaldas & Suresh A. Shroff & Co. (AMSS) are caught in a bitter feud over ownership and assets of the firm. Elder brother Shardul Shroff had filed a case against Cyril Shroff, his wife Vandana Shroff, partners L Viswanathan, James Abraham, George Goulding, Ashwin Maheshwari and the law firm itself.
The dispute is over the implementation of Bharati Shroff’s (mother of Shardul and Cyril) will. She had reportedly willed her equity in the firm to her elder son, Shardul, though an earlier agreement indicated that the family’s equity holding would be equally divided.
In the latest hearing at the Bombay High Court, the two parties have agreed to go in for a mediation which will be presided by Justice BN Srikrishna, senior counsel Harish Salve and notable investment banker Nimesh Kampani. According to Bombay High Court's proceedings, the mediation process should be complete by December 31, 2014 but it could be extended if mutually decided by both parties. The next High Court hearing is on January 19, 2015.
Calls and messages sent to both the parties did not elicit a response.
The two brothers are managing partners at the law firm and together own around 60 per cent in the firm with the rest being held by non-family equity partners. Former Finance Minister and senior counsel P Chidambaram is arguing the case on behalf of Shardul while his brother, Cyril has engaged senior counsel, Iqbal Chagla.
In the latest hearing on Tuesday, Chagla has told the High Court that Cyril has not accepted the will and in due course will put in his defence. One of the main arguments of Cyril is that his elder brother was deeply involved in the preparation of the will and as such it not their mother’s will at all.
Elder brother, Shardul has stated that a two-member managing committee (consisting of Abraham and Goulding) of the company overrode the will of late Bharati Shroff. Shardul's lawyers have stated that the members took a decision and passed a resolution in respect of 52,000 units of equity bequeathed by Bharati, which are equivalent to a 22.5 per cent stake of the law firm.
Shardul's lawyer, Chidambaram mentioned to the High Court that the best solution to deal with the issue was to put the 52,000 units of equity in a suspense account and also set aside the profits attributed to these in a separate account.
Media reports say that Chidambaram read out portions of Bharati Shroff’s will according to which he said, the mother had talked about a strained relationship with Cyril since 2003 and that she was allegedly “reduced to a mere showpiece”.
He said that the original will dates back to 2012, and in that she had said that the 52,000 equity units in her name in Amarchand & Mangaldas, could be bought out by each brother with the proceeds going towards charity. However, in the codicil to the will made in January 2014, she said that that she was disinheriting Cyril and his family because of the ill-treatment meted out to her, said Chidambaram.
Although the two brothers lead charge of the law firm separately in Delhi and Mumbai, the question doing the rounds is whether the two would continue to run the top tier national law firm together or it may see a split while retaining a common brand.
Shardul manages the business of the law firm in the Delhi region which includes Delhi, Gurgaon, Kolkata and Ahmedabad. He was the one who set up the Delhi office for the law firm. Cyril Shroff manages the law firm's business in the Southern and Western region which includes Mumbai, Bangalore, Hyderabad and Chennai.
AMSS is the country's largest law firm with over 600 lawyers and more than 80 partners. The firm was started in 1917 by Amarchand Shroff, the grandfather of Shardul and Cyril. They took charge in 1994 after the death of their father, Suresh.
(Edited by Joby Puthuparampil Johnson)