Entry of Foreign Law Firms allowed in India on reciprocal basis with restrictions
By Ssangeeta Sharma
As the Bar Council of India gave a green signal to foreign lawyers and foreign law firms to set up a base in India, the long-delayed issue of their entry into the Indian legal landscape was finally resolved, albeit with conditions.
The Bar Council of India (BCI) on March 10 notified the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Law Firms in India, 2022 (Rules).
The Rules enable international lawyers and arbitration practitioners to advise clients in India on foreign and international law.
Foreign lawyers and law firms were required to register with the BCI to undertake their activities in India and even set up their offices in the country under the new Rules.
On the other hand, the Indian lawyers were permitted to practice in the UK. They only need to register as Registered Foreign Lawyers (RFL), if they are in partnership with solicitors in England and Wales. In any case, they would remain under the regulatory remit of their Home Bar, which is BCI.
The foreign lawyers who wish to practice in India will also be subjected to the rules of BCI as well as their own country. BCI has categorically said that foreign lawyers cannot do Litigation and appearing before courts and tribunals is not allowed, adding that it has drafted certain rules for the areas where they can practice.
Justice V.R. Krishna Iyer said that in India, the legal profession was treated as a noble profession, not as a commercial activity or service. There should not be any commercial competition or procurement associated with this profession. Stating that law was not a trade and briefs were no merchandise, he said the leaven of commercial competition or procurement should not vulgarise the legal profession.
In the opinion of the Bar Council of India, the legal profession in India has to rise to the occasion to meet the global changes in Legal Arena, as people were migrating from one country to another on such a large scale, which had not been witnessed in earlier days. It said the world was becoming a global village.
As per the Council, International trade and commerce was advancing at a great pace. It said the demand for an open, receptive and responsive legal professional dispensation mechanism in India from clients or public who operated in international and cross-country business, was becoming severe by each passing day.
It added that growth in international legal work sphere and globalisation of legal practice and internationalisation of the law was increasingly becoming relevant to the growth of legal profession and practices in India.
The Council had initially objected to the entry of foreign lawyers and foreign law firms in the country in any form.
The legal fraternity of the country, however, in the years between 2007 to 2014, authorised to explore the potential and prospects of opening the law practice in India to foreign lawyers in the field of practice of foreign law and diverse international legal issues in non-litigious matters on the principle of reciprocity.
The decision was taken in Joint Consultative Conferences of the Bar Council of India and Chairmen and Vice-Chairmen of Executive Committees of all the State Bar Councils in India, wherein it was decided to hold dialogue and have interaction with the Union Government, the Ministry of Law and Justice, the Ministry of Trade and Commerce and Law Councils/Law Societies of foreign countries.
The High Court of Bombay, on December 16, 2009, passed a judgment in the Lawyers Collective vs Bar Council of India, in which it was held that the Reserve Bank of India was not justified in granting permission to the foreign law firms to open liaison offices in India.
It further held that the expression to ‘practice the profession of law’ in Section 29 of the Advocates Act, 1961 was wide enough to cover the persons practicing in litigious matters as well as persons practising in non-litigious matters and therefore, to practice in non-litigious matters in India, the respondents were bound to follow provisions contained in Advocates Act, 1961.
In its December 21, 2012 verdict delivered in the A.K. Balaji vs Govt of India case, the Madras High Court ruled that foreign law firms or foreign lawyers cannot practice the profession of law in India either on the litigation or non-litigation side, unless they fulfil the requirement of the Advocates Act, 1961 and the Bar Council of India Rules.
However, the High Court observed that there was no bar either in the Act or the Rules for 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.
Having regard to the aim and object of International Commercial Arbitration introduced in the Arbitration and Conciliation Act, 1996, it said the foreign lawyers could not be debarred from coming to India and conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration.
The Bar Council of India moved the Apex Court against the Madras High Court verdict. The Bombay High Court was also challenged in the Supreme Court by the Lawyers Collective.
The top court of the country disposed of the appeals in both the matters on March 13, 2018, after considering the issues.
It said questions for consideration mainly arise out of directions of the Madras High Court judgment, which had already been quoted in the beginning of this judgment viz whether the expression ‘practice the profession of law’ includes only litigation practice or non-litigation practice also.
The top court of the country mulled over that whether such practice by foreign law firms or foreign lawyers was permissible without fulfilling the requirements of the Advocates Act and the Bar Council of India Rules.
If not, whether there was a bar for the said law firms or lawyers to visit India on ‘fly in and fly out’ basis for giving legal advice regarding foreign law on diverse international legal issues. It also looked into whether there was no bar to foreign law firms and lawyers from conducting arbitration proceedings and disputes arising out of contracts relating to international commercial arbitration; Whether BPO companies providing integrated services were not covered by the Advocates Act or the Bar Council of India rules.
Lawyers and Law firms in India are divided on this issue.
A budding lawyer Tahira Karanjawala, Principal Associate, Karanjawala, and Company Advocates said that their firm welcomes this step towards legal liberalisation, which is a measured one in the right direction. It ushers in a new era of healthy competition for practitioners in India and will provide exciting new opportunities for collaboration.
“It will also go a long way in making India a hub for international arbitration. We believe that the care taken to ensure that the practice of foreign lawyers is restricted to non-litigious matters and matters pertaining to foreign law is a significant protection afforded to Indian practitioners. We hope this step will benefit the growth of the legal profession in India,” added Karanjawala.
Senior Advocate from Bangalore, Thiruvangadam said that there were practical challenges to BCI. Indian Law Firms are not recognized as an entity with BCI but foreign Law firms are allowed to register. Those who want to practice Indian Law need to appear for an equivalent exam and general bar council exam, which may not be difficult for them to appear and pass, he said.
Manik Thiruvangadam from Thiru & Thiru Law firm in Bangalore said that this move of BCI will be a threat to Indian lawyers who are into arbitration and cross-border transactions. The issue of allowing foreign law firms into India has been going on for more than 15 years now. Many arrangements have been looked into allowing foreign lawyers like fly-in and fly-out arrangements, partnering with an Indian law firm, etc but nothing worked so far.
Recently, the Secretary of the Department of Legal Affairs, Government of India held discussions with the Law Society of England & Wales and some Governmental delegates of the UK, where the UK proposed that Indian lawyers/law firms can establish their offices in England and Wales and can practice Indian law, international law as well as provide English law advice.
They, however, normally cannot practice in any of the six reserved activities detailed in the high-level summary of the regulation of foreign lawyers in the UK (exercise of a right to the audience/appear before a Court, conduct litigation, carry out reserved instrument activities (a contract to grant a short lease, a will or other testamentary instrument, an agreement not intended to be executed as a deed, other than a contract that is included above, a letter or power of attorney, a transfer of stock containing no trust or limitation of the transfer, conveyancing of property and similar work), probate activities, administration of oaths, notarial activities).
The Bar Council/Bar Standards Board also has a process for the temporary calls to the Bar for visiting advocates engaged in one case/a series of cases before the English courts.
As per the delegates of U.K. the Indian lawyers only need to register as Registered Foreign Lawyers (RFL) if they are in partnership with solicitors of England and Wales. They remain in any case under the regulatory remit of their Home Bar (Bar Council of India). Since there is already a way to requalification for Indian advocates through the Solicitors Qualification Examination (SQE), with a process to apply for eligible exemptions.
The Bar Council of India proposed to examine the veracity of such statements and their ramifications in detail, and, shall hold inquiries and further deliberations after involving the Government of India through the Ministry of Law and Justice and the Government of U.K. and the Bar Council of India, and thereafter may also think of introducing some Qualifying Exam for the purpose of eligibility and exemptions in a similar manner if it does not adversely affect the interest of Indian Lawyers/Law Firms and the Government of India.
The Bar Council of India is keen to progress on the idea of an MoU between the Bar Council of India, the Government of India (through the Ministry of Law and Justice ) on one part, and the Law Society of England and Wales, the Government of U.K., Bar Council of England and Wales, on the other.
The UK delegates have also assured the Bar Council of India that the Authorities in the UK are also keen and interested in the means of collaboration, cooperation, and joint practice between Indian advocates and UK lawyers.
The time has come to take a call on the issue. Bar Council of India is of the view that opening up law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in non litigious matters and in international arbitration cases would go a long way in helping legal profession/domain grow in India to the benefit of lawyers in India too.
The standards of Indian lawyers in proficiency in law are comparable with the international standards and the legal fraternity in India is not likely to suffer any disadvantage in case law practice in India is opened up to foreign lawyers in a restricted and well controlled and regulated manner on the principle of reciprocity as it would be mutually beneficial for lawyers from India and abroad and these Rules are an attempt by Bar Council of India in this direction. These rules will also help to address the concerns expressed about the flow of Foreign Direct Investment in the country and making India a hub of International Commercial Arbitration.
Many countries have already allowed foreign lawyers to practice foreign law and diverse international legal issues and arbitration matters in their countries in restricted fields with specific and prescribed conditions.
Taking an all-inclusive view, the Bar Council of India resolves to implement these Rules enabling foreign lawyers and Foreign Law Firms to practice foreign law and diverse international law and international arbitration matters in India on the principle of reciprocity in a well-defined, regulated and controlled manner.