June 12, 2021

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Delhi HC orders Rajiv to pay Rs 77 cr (pending further dispute resolution) in exchange for Saraf exit

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The Delhi high court bench of justices RS Endlaw and Sanjeev Narula hearing the long-running dispute between Rajiv Luthra and Mohit Saraf, the two co-founders of L&L Partners, has ordered the Luthra to pay Saraf in compensation while Saraf could exit and set up his own firm, Bar & Bench has just reported.

We have reached out to both parties for comment.

Saraf said: “This is an interim relief. Final relief will be decided by the arbitration tribunal.”

According to B&B, the court held:

  • Luthra would pay Rs 52 cr to Saraf as well as an irrevocable and unconditional bank guarantee of Rs 25 cr for Saraf, as effective surety for an eventual and possible relief in the ongoing arbitration between them. Profit shares and other such details should also be decided in arbitration.
  • Saraf should surrender any right to be reinstated to any of the L&L partnership firms, though talks with respect to how their shares in the litigation firm would be divided should and will continue.
  • However, Saraf could start a new law firm (without the fetter of any non-competes for clients, fee-earners or staff); Saraf would be entitled to call himself as a former L&L partner but not include L&L or Luthra in the name of the new firm.
  • The move of any data relating to any clients moving with Saraf should also be moved with him by L&L (though Saraf’s L&L email address should be blocked after Saraf had received the pay-off).

According to B&B:

The data of clients going to Saraf would be shared, he added. Further, he submitted that while Saraf can take credit for the work he has done, he cannot take credit for what the firm has done.

However, the Court responded, “It is difficult to draw lines like that. When you are Partners, everything you do is attributable to the firm.”

Being updated.

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