[Breaking] Delhi High Court sends Rajiv Luthra v. Mohit Saraf to mediation before Sriram Panchu

The Delhi High Court today ordered for the dispute between L&L Partners Senior Partner Mohit Saraf and Founder Rajiv Luthra to be decided by mediation..The mediation will be conducted by Senior Advocate Sriram Panchu..The matter was heard by a Bench of Justice V Kameswara Rao. .After hearing the parties at length today, Justice Rao said,."We'll put it for mediation..if it doesn't work out, come back. I'll decide the petition."Justice V Kameswara Rao.As per the Court's order, the mediation will take place virtually either tomorrow and day after, as per Panchu's convenience. .The Court also clarified that the fee payable to Panchu shall be shared equally by Luthra and Saraf. .At the outset of today's hearing, Senior Advocate Arvind Nigam, appearing for Mohit Saraf, said that this was not a matter that should have come to court..Nigam then took the Court through the partnership deed of the firm and highlighted the clauses on termination and dissolution of partnership, induction of new partners, dues payable to a partner who exists etc. .While dealing with the clause on induction of new partners to the firm, Nigam stated,"If the two [Saraf and Luthra] don't agree to induction of a partner, Luthra may give away part of his own profit to the new partner. However, this new partner will have no rights.".When the Court reconvened after the lunch break, Nigam submitted that Luthra had given notice of his withdrawal from the firm on January 6 this year. .This notice period was extended on April 4, April 30 and then again on August 30. It was last extended till October 31, he said. .Nigam said that finally, on October 12, Luthra's withdrawal from the firm was accepted by Saraf. He went on to argue,."I never wanted dissolution and termination of the firm. I wanted to induct new partners. Luthra has practically been a sleeping partner this year."Arvind Nigam.Speaking of Luthra's decision to remove Saraf from the partnership, Nigam argued,"There is no consent on dissolution of firm...not only has he terminated (me), he has removed my name and removed my access to my email, papers. Entire IT infrastructure is blocked......I accepted his resignation but I did not block his access. A partner remains a partner till accounts are settled. He has barred me from the assets of the firm, which he cannot do. He has published it in the newspaper.".Stating that Saraf has approached the High Court to challenge this decision, Nigam said,"Irreparable damage would be caused to all the lawyers in the firm and the clients. The balance of convenience is in my favour."He thus sought that Saraf's access to the firm and its infrastructure be restored, and that the bouncers deployed at the office be removed..Revealing that Luthra's decision was brought to Saraf's attention through a client, Nigam concluded,"I am sorry that this matter has come to court. It should have been mediated and settled..I am willing to go to a time-bound mediation...subject to status quo ante.".Senior Advoate Dayan Krishnan also appeared with Senior Advocate Nigam. .Senior Advocate Neeraj Kishan Kaul then made submissions on behalf of Luthra. He was later joined by Senior Advocate Abhishek Manu Singhvi. .Accusing Saraf of leaking confidential information of the firm and sharing private WhatsApp communication with third parties, he said,"The way out is that you [Saraf] go out. We will give what he is entitled to.".Saraf's conduct was unbecoming of a lawyer, Kaul said. .Taking the Court through the clauses of the partnership deed, Kaul said,"The deed is replete with clauses which give power to Mr Luthra and the person who has to leave is Mr Saraf...In the event of disagreement, the decision of Luthra was final...The only person who has the right to induct new partners in case of disagreement is Luthra and not Saraf.".Kaul thus argued that in the matters of termination, the ultimate power vested with Luthra and not Saraf. ."It is not a partnership at will and only Luthra has the right to terminate or withdraw", he said. .Kaul submitted that given the circumstances, Luthra was left with no option but to terminate the partnership of Saraf. Referring to Luthra, he said,."Here is a man who is hurt..He has always taken people along with him. He has mentored three generations of lawyers.".Asserting that Saraf's case was based on a misreading of several Whatsapp exchanges, Kaul clarified that as per the partnership deed, the only way that Luthra could exit was either through retirement or withdrawal..Senior Advocate Abhishek Manu Singhvi, appearing for Rajiv Luthra, raised an objection at the very outset. He said,"He (Saraf) has made persons who are not party to the arbitration agreement as parties.".Singhvi submitted that to say that Luthra intended to retire was a complete red herring. .Singhvi reiterated that in all crucial matters, including termination, the power belonged to Luthra and not Saraf. ."We are paying Rs 15 crores without being liable to pay", he said. .Both the counsel opposed passing of any orders at this stage. .They nonetheless agreed that the dispute be sent to mediation. .The two senior-most partners at L&L Partners have been embroiled in a tiff over the dilution of the firm's equity for weeks now.The main contention in Saraf's plea before the Delhi High Court is that he cannot be summarily thrown out of the firm using strong-arm tactics..Even as Saraf rejected Luthra's proposal that all partners holding equity dilute their stake in the firm, the latter went on to induct two equity partners into the firm..Eventually, Saraf wrote to the corporate partners stating that he had accepted Luthra's earlier offer to retire and withdraw from the firm. He also alleged that there were "material breaches of the partnership deed" by Luthra..[Exclusive] L&L Senior Partner Mohit Saraf announces exit of Rajiv Luthra, reconstitution of partnership, and promotions.In response, Luthra not only denied retiring from the law firm, but also terminated Saraf's partnership on account of the latter's "clumsy strategy" on equity dilution..L&L Partners saga rages on as Rajiv Luthra terminates Mohit Saraf from partnership for "clumsy strategy" on equity dilution.On September 24, a firm-wide Zoom conference turned a bit ugly, with Luthra and Saraf both making allegations against each other. Luthra openly spoke against Saraf and his future plans with regard to the firm, while Saraf retaliated and made some nasty remarks against Luthra.During the call, equity partners from the Litigation Practice at L&L (Litigation Partnership) showed their support towards Luthra..With a view to coming clean about the partnership to the lawyers at L&L, Saraf subsequently sent an email to members of the firm highlighting important clauses of the partnership deed of L&L Partners..Is L&L Partners heading towards a split? Mohit Saraf apologizes to firm's lawyers after ugly spat with Rajiv Luthra on Zoom call.Read the Order: