Entry of Foreign Lawyers and Law Firms in India
Introduction
The Supreme Court of India
clarified the debatable issue as to whether International Lawyers/
International Firms can practice law and whether they can advice the clients in
India. The Supreme Court vide its
judgment dated 13th March, 2018 titled as BAR COUNCIL OF INDIA v. A.K. BALAJI AND ORS (CIVIL APPEAL NOS.7875-7879 OF 2015) held that foreign firms, companies and law firms are allowed
to practice foreign laws on casual visit and can advice Indian clients on ‘fly
in and fly out’ mode on foreign law or on their own system of law and on
diverse international legal issues.
The said matter had already been
addressed before the Hon’ble Madras High Court and the Hon’ble Bombay High Court .The Bar Council of India
(“BCI”) had filed an appeal against the Madras High Court decision, while
Global Indian lawyers challenged the Bombay High Court decision before the Hon’ble
Supreme Court of India.
Issue Involved:-
- Whether International Lawyers/International Firm can practice Law in India.
- Whether International Lawyers/International Firms can open an office in India.
- Whether Foreign Advocates shall be allowed to fly-in-fly-out in India to provide legal advice to its Clients.
- Clarified that meaning of “practice the profession of law”.
DECISION OF THE MADRAS HIGH COURT
A writ petition was filed before
the Hon’ble Madras High Court to seek direction to Union of India, RBI and BCI
to take action against 32 foreign law firms which had been allegedly practicing
in India.
The main issue which had been addressed in the said matter was the principle of reciprocity and to whether
Foreign Advocates shall be allowed to fly-in-fly-out
in India to provide legal advice to its Clients.
Hon’ble Madras Court held that:
- The Court had restrained foreign law firms and lawyers from practicing as an Advocate in India. However, it stated that foreign lawyers could visit India for a temporary period on a ‘fly in and fly out’ basis to render legal advice regarding foreign law or their own system of law and on diverse international legal issues as there is no specific provision in the Advocates Act to prohibit a foreign lawyer from visiting India for a temporary period to advice his or her clients on foreign law.
- Foreign Lawyers were allowed to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration.
- Business Processing Outsourcing (BPO) providing wide range of customized and integrated services and functions to its customers were not included within the purview of the Act or the Rules. However, in the event of any complaint made against these B.P.O. Companies violating the provisions of the Act, the Bar Council could take appropriate action against such erring companies.
Supreme Court's verdict
The Supreme Court of India heard
over 30 law firms hailing from the United Kingdom’s, United States of America, France
and Australia on the aforesaid issues. The Supreme court of India modified
Madras High Court order wherein, the Hon’ble High Court though had restrained
foreign law firms and lawyers from practicing as an Advocate in India but however
had allowed foreign lawyers to visit India for a temporary period to render
legal advice. The court had adopted the concept of flying in and flying out (FIFO).
Vide this order The Supreme Court
of India held that:-
Foreign Lawyers were allowed to fly-in-fly-out on casual basis
The concept of Flying in Flying Out had been clarified that foreign lawyers have
been allowed fly in and fly out of India on casual basis for rendering legal services on offshore laws and
diverse international legal issues. It shall include drafting instruments and
being part of discussions on the issue. Hon’ble Supreme Court of India observed
that ‘fly in and fly out’ may amount to practice of law if, done on a regular
basis, and concluded that whether a particular visit qualifies to be a frequent
visit, or a casual visit has to be determined on a case to case basis, and Bar
Council or Union of India have been directed to frame appropriate rules in this
regard.
Allowed to practice Law with prior permission
Had clarified in respect of the law on the
interpretation of words ‘practice the
profession of law’ whereby allowing foreign lawyers to practice foreign law
in India only with prior permission of the court or tribunal, authority or
person before whom proceedings are pending. It had held that “practice the
profession of law’ includes both litigation as well as non-litigation practice
such as giving of opinion, drafting of instruments, participation in
conferences involving legal discussion as well.
Allowed to conduct Arbitration Proceedings
Foreign lawyers have not been completely barred from coming to India for conducting
arbitration proceedings in disputes involving international commercial
arbitration, but they would be subject to the code of conduct applicable to the
legal profession in India. Rules of institutional arbitration will apply to
them.
Non- Applicability of The Advocates Act, 1961 on Business Processing Outsourcing (BPO)
The Supreme Court of India also modified the
Madras High Court ruling stating that the BPOs, providing customised and
integrated services, do not come within the purview of the laws regulating the
legal profession provided their activities do not amount to practice of law. The
Hon’ble Madras High Court had ruled that services such as word processing,
secretarial support, transcription services, proof reading services, travel
desk support services, etc., do not come amount to legal practice and did not
come within the purview of the Advocates Act, 1961.
Conclusion
The Supreme Court of India vide
this judgment had allowed foreign lawyers
- To fly in and fly out of India and give advice on international legal issues which would be casual in nature.
- To conduct arbitration proceedings in respect of matters regarding international commercial arbitration, but they shall be required to adhere to the code of conduct applicable to the legal profession in India.
The Ruling of Supreme Court of
India had a shown path towards opening up the Indian legal market to the
foreign contemporaries for which Bar Council of India has been directed to
frame Rules governing the practice of law in India by foreign lawyers and law
firms.
The presence of foreign law firms
will increase competition in the legal
sector by making young lawyers of India being exposed to
diverse international legal laws and will provide
more employment opportunities for young lawyers. While Supreme Court has
not expressly restricted foreign lawyers but has however acknowledged Bar
Council’s right to regulate legal profession.
Presently the Government of India
is trying to make India a Global
Arbitration Hub in order to adopt more liberalization,
the presence of global law firms will, in fact, reassure foreign investors
to India.
