Ownership dispute at India's biggest law firm Amarchand Mangaldas.
It’s more sad than ironical that the firm that lawyered the most famous business family split in India, is now in the throes of a similar dispute. Amarchand Mangaldas, India’s biggest law firm, is one partnership, predominantly owned and run by 2 the Shroff brothers.
Cyril Shroff runs the Mumbai branch (that includes Bangalore, Chennai, Hyderabad) . Shardul Shroff runs the Delhi branch (including Calcutta, Ahmedabad). And while the Mumbai business dwarfed the Delhi business many years ago, both clock similar revenues nowadays, maybe 55-45.
A few months ago the Shroff brothers lost their mother. She had lived mostly with Cyril and family in their Worli sea face home in Mumbai. Mrs. Shroff held a substantial interest in the Amarchand partnership. One source says it was 22 percent, whereas the brothers each owned in the region of 17-18 percent. It turns out Mrs. Shroff willed her entire partnership interest to Shardul Shroff. And therein lies the dispute.
Because 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.
A source indicates the will casts an unpleasant light on the relations between various family members. If the will contents become public, they will probably overshadow the ownership dispute and smear a well reputed family. Worse still, it spells uncertainty for the over 90 partners and over 700 lawyers that work at Amarchand across the country. And drag through the mud the good name of a firm whose business is to keep others clean.
Important Disclaimer: I have not yet seen the legal suit filed by Shardul Shroff. Nor is any Shroff family member willing to make a comment. This story was written on the basis of information shared with me by a source at Amarchand. It may need correction once I read the legal suit. If either side believes the story does not accurately represent their facts, I will be happy to carry their clarifications here.