Shardul versus Cyril; India’s first legal family embroiled in inheritance dispute before Bombay High Court (Updated)

A dispute over the will of Bharati Shroff, one of the founding Partners of Amarchand Mangaldas Suresh A. Shroff, may lead to one of the biggest legal battles of the year. Shardul Shroff, Managing Partner at the firm’s Delhi office, has initiated legal proceedings against his brother and Mumbai Managing Partner, Cyril Shroff.

It is understood that the dispute stems from the will of their mother, the late Bharati Shroff. Under this will, Bharati Shroff had bequeathed her properties and her majority stake in the firm to elder brother Shardul Shroff. 

The two brothers had been negotiating over the will for the last two months; failure of these talks leading to Shardul Shroff approaching the Bombay High Court.

According to sources in Mumbai, Bharati Shroff’s will was filed for probate in Bombay today together with a suit for injunction. The Delhi Managing Partner has subsequently filed a plaint seeking an injunction prohibiting Cyril Shroff from indulging in any “pilfering of the estate”.

Amarchand breakaway, Bharucha & Partners’ MP Bharucha and Alka Bharucha are representing Shardul as per information available on the Bombay High Court’s website.

The plaint lists six respondents apart from Cyril namely,

– Vandana Shroff

– L Vishwanathan (Equity Partner)

– James Abraham (Former BCG Consultant Partners)

– George Goulding (Former BCG Consultant Partners)

– Ashwin Maheshwari

– The firm itself 

Speaking to Bar & Bench, Vandana Shroff said,

“We are shocked. We are trying our best to make sure that clients don’t suffer and its business as usual. We will deal with things as and how things unfold.”

As per Maneka Doshi, the executive editor at CNBCTV18 news,

Mrs. Shroff held a substantial interest in the Amarchand partnership. One source says it was 22%, whereas the brothers each owned in the region of 17-18%. 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

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. Bharati 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. 

Speaking to ET, Cyril Shroff said that he had not yet finalised his legal strategy.

“I will never initiate any legal action which is public in nature, as it impacts the family and firm’s name. I have not yet decided as to whether I am accepting the will or not. We are more focused on our clients, partners and people working with us, and for them there will be business as usual.”