PracticeConsultingAndersen feud nears climax

Andersen feud nears climax

New York federal court moves Arthurs/Consulting dispute on to the arbitration stage. Phillip Inman reports

Arthur Andersen moved a step closer to a final confrontation with itsitration stage. sister firm Andersen Consulting following a judgement in a New York federal court last week. The judge’s decision clears the way for both sides to take their long-running dispute to arbitration.

Andersen Consulting filed a series of complaints last December with the Paris-based International Chambers of Commerce after a two-year battle between the two organisations. Observers said last week’s ruling could lead to a settlement of the dispute because relations between top executives in the two organisations had now reached ‘rock bottom’.

Andersen Consulting is attempting to establish claims that Arthurs has broken agreements preventing it from setting up a rival consultancy unit.

Consulting also alleges that its sister firm has poached consultancy staff and unfairly skimmed off millions of dollars from Consulting’s profits to fund the new unit.

The allegations sparked a counter allegation from Jim Wadia, worldwide head of Arthur Andersen, who claimed that Consulting was in breach of the firm’s rules in its attempts to gain autonomy.

Andersen Consulting went to court after a board meeting of Andersen Worldwide, the umbrella organisation that oversees both sides. It claimed Arthurs, which has a built-in majority on the Worldwide board, forced through a vote that backed Arthurs with the aim of undermining the arbitration process.

Judge John Keoltl refused Consulting’s request for an injunction, but only after he heard from Arthur’s representatives that the vote was merely a recommendation which had not resulted in irreparable harm to the organisation.

Arthurs has yet to put forward its counter claims to the arbitrators.

It has asked for two extensions to the process.

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