Dispute between Rajiv Luthra and Mohit Saraf over equity referred to mediation

Dispute between Rajiv Luthra and Mohit Saraf over equity referred to mediation

The Delhi High Court referred to mediation the dispute between founder of Luthra & Luthra Partners Rajiv Luthra and former Senior Partner Mohit Saraf over the firm's equity. This order was passed after all the parties agreed to try to mediation, with Senior Advocate Rajeev Virmani acting as the mediator.

"Counsel for all the parties submit that they would like to attend a resolution of the claims raised by the petitioner under the partnership deed dated April 1, 2002, by mediation. For this purpose, they request that a mediator be appointed," the Court said.

In the event the mediation fails, the matters will be referred to arbitration under former Supreme Court judge, Justice Deepak Gupta, who is already seized of a dispute between Luthra and the heirs of late Partner Vijay Sondhi. The Court requested Justice Gupta to defer entering into the arbitration reference until October 1.

The Court also made it clear that it would not enter into any controversy between the parties and all issues including those with regard to maintainability of the claims were being left open for adjudication by the arbitrator.

The present petition was filed by Saraf after the litigation arm of the firm, which was set up by him along with Luthra, Chandhoke, Sharma and the late Sondhi in 2003, was dissolved. It was submitted that the partners acted together and "wrongfully and illegally expelled" him from the firm, thereby preventing him from conducting its business and affairs.

In March 2021, Safar served arbitration notice to the respondents and Sondhi suggesting that the arbitral tribunal constituted in relation to disputes between him and Luthra be invited to adjudicate the disputes that have arisen in relation to the L&L Partners litigation firm as well.

The following month, the Partners sought settlement discussions with Saraf, however after the passing of Sondhi in January 2022, the Partners delayed the same following which another notice was sent to them. It was stated that the partners had illegally distributed the profits of Luthra & Luthra Law Offices Litigation without settling Saraf's claims and that there was an attempt to distribute his shares in the firm.

Saraf further said that the according to information available with him, Chandhoke and Sharma acquired a new office in South Delhi, were actively soliciting clients, and were attempting to transfer the existing business and property of the firm to the new office, which directly affects his rights.

At this juncture, Sondhi's legal heirs approached the Court staking a claim to be inducted into the firm's equity partnership. They had also prayed that the 18.5% equity stake held by Sondhi not be diluted by the existing Partners. A judgment was passed in that matter appointing Justice Gupta as the sole arbitrator.

The Court suggested referring the dispute to mediation and in the event that it is unsuccessful, the dispute shall further be referred to arbitration.

On the consensus of all parties to this suggestion, the Court passed the order.