Feuding brothers and managing partners of India’s largest law firm Amarchand Mangaldas & Suresh A Shroff & Co. – Shardul Shroff and Cyril Shroff have decided to go in for a mediation to try and settle a dispute over ownership and assets of the firm.
The two parties told the High Court of Bombay at a hearing on Tuesday that they were agreeable to a mediation to be presided by Justice B N Srikrishna, Senior Counsel Harish Salve and prominent investment banker Nimesh Kampani, one of the most trusted bankers across corporate houses. The hearing on Tuesday relates to the suit filed by Shardul against Cyril, Cyril’s wife Vandana Shroff, partners L Viswanathan, James Abraham, George Goulding, Ashwin Maheshwari and the law firm.
Today’s proceedings were lit up with the appearance of former Finance Minister and Senior Counsel P Chidambaram who argued on behalf of Shardul while his brother, Cyril who is battling his elder brother had engaged another high profile Senior Counsel, Iqbal Chagla.
Chidambaram argued that a two-member Managing Committee of the company over rode the will of Bharati Shroff, mother of the Shroff brothers. He said that the two members, Abraham and Goulding, by deciding to divide Bharati Shroff’s equity evenly between the brothers, took the role of a probate court. He said that the members took a decision and passed a resolution in respect of 52,000 units of equity bequeathed by Bharti, which are equivalent to a 22.5 per cent stake in Amarchand Mangaldas.
Calling it “inter-meddling”, Chidambaram read out an e-mail sent out by the two members which they allegedly circulated in the capacity of managing committee members. “Two partners of the management committee cannot decide on their own,” said Chidambaram.
According to Chidambaram, the best way 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.
Chidambaram also read out portions of Bharati Shroff’s will according to which he said, the mother had said that her relationship with Cyril had been strained 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.
Chagla and Senior Counsel Darius Khambata, who appeared for the two managing committee members, took strong objection to Chidambaram reading out from the will. Chagla said his client was willing to “stay his hand”, but choosing to read from an “un-probated” will was not called for.
Khambata argued that the two “independent professionals” had passed a resolution that was ratified by the majority.
“The entire address has been made to create prejudice. We know we are not a probate court,” said Khambata.
Chagla also told the HC 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.
After the arguments concluded, the parties arrived at an agreement to go in for mediation. Justice Dhanuka told them to to complete the mediation process by December 31, 2014 and said any further extension would be decided mutually by both parties. He also granted three weeks time to Chagla to file a reply and posted the next hearing on January 18, 2015.
The dispute centers around the implementation of Bharati Shroff’s 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. The two brothers jointly hold close to 60 % of the firm’s equity now. The firm was started in 1917 by Amarchand Shroff, the grandfather of Shardul and Cyril, who are the two Managing Partners. They took charge in 1994 after the death of their father, Suresh.
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