Foreign lawyers allowed to practice in India only on "Reciprocal Basis"

FOREIGN LAWYERS ALLOWED TO PRACTICE IN INDIA BUT ONLY ON “RECIPROCAL BASIS”…… TIME WILL TELL THEIR FATE IN INDIA.

INTRODUCTION

Since decades, there has been a lot of debate and ambiguity on whether foreign lawyers can fly-in-fly-out (FIFO) to India to counsel the clients. With India evolving as a hot destination for multinational companies for making investment and the increasing corporate disputes, the foreign law firms are eyeing to enter the legal market. Codification of the law on this subject is essential. Under Section 7(1) of the Advocates Act, 1961, the Bar Council of India (BCI) recognizes foreign law degrees on a reciprocal basis, and legal academics can teach and engage in legal research without any bar. However, foreign nationals are prohibited from “practicing law” in India as per the Act.

BACKGROUND

Foreign lawyers and Indians practicing law abroad came together in Nov, 2012 to raise a fresh plea to permit foreign lawyers to practice in India. They demanded appropriate amendments in the Advocates Act to enable foreign lawyers to practice in India and set up law firms in India.

The Supreme Court had earlier directed The Reserve Bank of India (RBI) not to permit law firms from abroad to open liaison offices in the country. Opening up legal services to foreign competition has been a major area of concern for Indian lawyers with BCI consistently opposing the entry of foreign lawyers into litigation. Some of the firms have approached the Supreme Court seeking its direction to the government to allow them to operate in the country. The SC agreed to hear their plea and sought response from BCI and the Centre for doing away with restrictions on their entry. BCI thus claimed that the legal practice would also include participation in seminars and conferences.

Prime Minister Narendra Modi’s Government has been serious about pushing the legal liberalization agenda. Society of Indian Law Firms (Silf) was established in 2000 for this purpose. Many Silf members initially came together to raise their voice against the Bar Council of Delhi for Delhi Law firms listings in an international legal directory. The council claimed this was in violation of the Advocates Act, 1961, lawyer advertising restrictions.

CASE LAW RELATING TO ENTRY OF FOREIGN LAWYERS IN INDIA

In this case, the petitioner, AK Balaji had sought a direction to the Union of India, the RBI, the BCI and the Bar Council of Tamil Nadu to take action against 32 foreign law firms, allegedly practicing illegally in India. The Advocates Act provides that a foreigner may be admitted as an advocate in India, if Indian nationals are permitted to practice law in his/her country, thus satisfying the “principle of reciprocity”. The Madras High Court had agreed that foreign legal experts needed to visit India, to offer advice to their clients on their laws, and 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. The concept of flying in and flying out (FIFO) which gained currency after the High Court’s verdict was a result of this understanding. The Bombay High Court’s verdict predates the Madras high court’s verdict, having been delivered on December 16, 2009. In this case, the RBI had allowed 12 to 14 foreign law firms to open their liaison offices in India. The Bombay High Court had held that such permission could not have been granted as it was contrary to the Advocates Act and the BCI Rules.                                                      

Both the Madras High Court and the Supreme Court’s interim order endorse this view, But in the second appeal before the Supreme Court, the Global Indian Lawyers (GIL) group of interveners, has challenged this view. On September 14, 2015 the petitioner before the Bombay High Court, the NGO Lawyers Collective, argued before the Supreme Court that Global Indian Lawyers (GIL) should not be allowed to challenge the Bombay High Court verdict after a gap of six years. The Lawyers Collective’s senior counsel, CU Singh, pointed out that GIL was not a party before the Bombay High Court, and therefore, the bench should decide the maintainability of its appeal, at the threshold stage. When the BCI, through its senior counsel, MN Krishna Mani sought six weeks time to file a comprehensive reply, GIL’s senior counsel, Arvind P Datar expressed his apprehension that the case might be going into cold storage once again. The bench, however, accepted Krishna Mani’s suggestion that the BCI may be at liberty to mention if there is any settlement between the BCI and other parties in the meantime. The Union of India’s stand on the issue continued to be uncertain with its counsel seeking more time to submit a response. The UOI had held the view before the Bombay High Court that those practicing in non-litigious matters – foreign lawyers claim they are practicing non-litigious law- are not governed by the Advocates Act. Yet, the UOI supported the BCI’s stand before the Madras High Court that if foreign law firms were permitted to open their offices in India, Indian lawyers would suffer discrimination. Reports suggest that the GOI and the BCI may revise their stand on the issue; therefore, the status of the appeals in the Supreme Court will continue to be uncertain till they make their stand clear to the court. Supreme Court on 14 September, 2015 decided to grant leave in two appeals against the Madras High Court judgment and the Bombay High Court judgment against foreign law firms.

The Bar Council of India (BCI) is the appellant in the first case, and a respondent in the second. In the first case, the appeal is against the Madras High Court’s judgment, delivered on 21 February 2012.

CONCLUSION

Bar Council of India (BCI) and Society of Indian Law Firms (SILF) have agreed "in principle" with the government's proposal to gradually open up the legal sector to foreign players but insist that this should be on a “reciprocal basis”. This marks a significant shift in the government’s policy towards the issue of liberalization of the legal services sector in India, which has so far been virtually closed to outsiders.