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SC bars foreign law firms from opening offices in India

Team SoOLEGAL 13 Mar 2018 4:10pm

SC bars foreign law firms from opening offices in India

The Supreme Court today barred the foreign law firms from practicing, setting up offices in India.

However, the bench headed by Justice AK Goel and Justice UU Lalit allowed foreign lawyers to render legal advice to clients in India on foreign laws on a casual, temporary period on a ‘fly in fly out’ basis.

Further, the court said that foreign lawyers could participate in International Commercial Arbitration, subject to institutional rules.

Justice AK Goel, while pronouncing the verdict, said that even for the limited purposes foreign law firms would be subject to the Bar Council of India’s (BCI) Code of Conduct.

The SC Bench has also directed the BCI and the Centre to frame rules in this regard.

The court verdict came during a hearing of a batch of pleas filed against judgments of Madras and Bombay High Courts.

Background

The Bar Council of India appeal against the Madras High Court judgment sparked off the debate over foreign law firms entering India. The Madras High Court in its judgment in A.K.Balaji v. Bar Council of India, dated February 21, 2012, made the following submissions:

(i) Foreign law firms or foreign lawyers cannot practice the profession of law within the territory of India either on the litigation or non-litigation side, unless they fulfill the requirement of the Advocates Act, 1961 and the Bar Council of India Rules.

(ii) However, there is no bar either in the Act or the Rules for the foreign law firms or foreign lawyers to visit India for a temporary period on a ‘fly in and fly out’ basis, for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues.

(iii) Moreover, having regard to the aim and object of the International Commercial Arbitration introduced in the Arbitration and Conciliation Act, 1996, foreign lawyers cannot be debarred to come to India and conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration.

(iv) The B.P.O. Companies providing wide range of customised and integrated services and functions to its customers like word-processing, secretarial support, transcription services, proof-reading services, travel desk support services, etc. do not come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules. However, in the event of any complaint made against these B.P.O. Companies violating the provisions of the Act, the Bar Council of India may take appropriate action against such erring companies.”

While delivering the judgement in Lawyers Collective v. BCI and Ors in 2009, the Bombay High Court reaffirmed the Madras high court's verdict that foreign law firms cannot practice in India. However, the court also made the following submissions:

 (i) The RBI was not justified in allowing foreign law firms (in this case White & Case, Chadbourne & Parke, and Ashurst) to open liaison offices in India.

(ii) Foreign law firms could carry on their liaison activities in India only on being enrolled as advocates under the Advocates Act, 1961.

(iii) Moreover, the expression “to practice the profession of law” is wide enough to cover persons practicing in litigious matters as well as persons practicing in non-litigious matters in India.

The judgment passed by the Bombay High Court remained unchallenged for six years, until Global Indian Lawyers Association moved the Supreme Court challenging the Bombay High Court verdict in 2015.

The case came up for final hearing after the Central government filed an application for early hearing of the matter.

Tagged: Supreme Court   fly in fly out   Justice AK Goel   Justice UU Lalit   foreign lawyers   Bar Council of India   foreign law firms  
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