Delhi High Court Stays Mohit Saraf's Termination From L&L Partners Till Conclusion Of Arbitration

A single judge bench of the Delhi High Court today ruled in favour of Mohit Saraf in the Saraf v Luthra saga, noting that prima facie, Saraf's "termination from partnership by Luthra in terms of email dated Oct 13, 2020 is in violation of the Deed and the Partnership Act" in terms of Section 12 of the Partnership Act, "where a partner has the right to take part in the conduct of the business".

The court has further held that keeping Saraf away from the partnership business shall be to his prejudice, if he finally succeeds in the prospective arbitration proceedings. In light of the above, the Single Judge bench has stayed the operation of the email dated Oct 13, 2020 which was issued by Luthra terminating Saraf from the partnership till the conclusion of the prospective arbitration proceedings.

The Delhi High Court on Dec 9, had reserved its order in the case. The case began with Mohit Saraf - a senior partner at L&L Partners (previously Luthra & Luthra) taking Rajiv Luthra, the firm's founder and managing partner, to Delhi High Court after the latter removed him from the firm.

Both the partners are two equity holders in the firm, with Luthra owning a majority stake and the dispute between the two arose with an alleged disagreement over the sharing of the firm's equity with other partners.

Saraf was represented by Sr. Adv. Arvind Nigam, while Luthra was represented by Sr. Advs. Abhishek Manu Singhvi and Neeraj Kishan Kaul.

In his plea before the Delhi High Court, Saraf requested the court to stay Luthra's email notice, dated Oct 13 vide which Luthra had removed Saraf from the firm. He had further prayed for restoration of his access to the firm's offices. Alongwith his removal, not only was Saraf's office access barred, with guards posted outside the Delhi office, he also lost access to his official email ID, with his name removed from the management section of the website.

After the initial hearing in the case, and with the consent of both the parties, the court had directed the parties to participate in a mediation conducted by Sr. Adv. Sriram Panchu, however, with the mediation yielding zilch results the parties returned to court. Saraf's counsel had said that while they were open to work out differences, they wanted a status quo ante order from the court, i.e., a return to the previously existing state of affairs prior to the Oct 13 email notice.

The firm was re-branded in 2018 to L&L Partners in a bid to make it more representative of its partners.