Bar Council of India allows entry of Foreign Lawyers and Foreign Law Firms

Bar Council of India allows entry of Foreign Lawyers and Foreign Law Firms

The Bar Council of India (BCI) has allowed to open up law practice in India to foreign lawyers, foreign law firms. The statutory body of lawyers has released rules for registration of foreign lawyers and foreign law firms in India.

The latest rules enable foreign lawyers and foreign law firms to practice diverse international law, international arbitration in India.

According to the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 it enables the international lawyers and arbitration practitioners to practice in India.

These rules are based on ‘principle of reciprocity in a well -defined, regulated and controlled manner’, the BCI said in the notification.

The BCI acknowledged the fact that international trade and commerce is advancing at a great pace. The demand for an open, responsive and receptive legal professional dispensation mechanism in India from clients/public who operate in international and cross-country business is becoming severe day by day. Growth in international legal work sphere and globalization of legal practice and internationalization of the law is increasingly becoming relevant to the growth of the legal profession and practices in India.

The Objects and Reasons of the Rules state:

“Time has come to take a call on the issue. Bar Council of India is of the view that opening up of 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 BCI further expressed its view that India will not likely to suffer any disadvantage if law practice in India is opened to foreign lawyers in a restricted and well-controlled and regulated manner.

"...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 flow of Foreign Direct Investment in the country and making India a hub of International Commercial Arbitration...Let us ensure than an opportunity for creating development and growth for legal profession and in the legal sphere in India is not lost," it added.

The Bar Council of India was initially opposing entry of foreign lawyers and foreign law firms in India in any form. However, it was authorized by the legal fraternity of the Country in the years 2007-2014 in Joint Consultative Conferences of Bar Council of India and Chairmen, Vice-Chairmen and Chairmen of Executive Committees of all the State Bar Councils in India to hold dialogue and to interact with the Government of India, Ministry of Law and Justice, Ministry of Trade and Commerce and Law Councils/Law Societies of foreign countries 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 and it has been doing so.

In the interregnum, the judgment of the Bombay High Court on 16 December, 2009 in Lawyers Collective Versus Bar Council of India in which the Bombay High Court held that Reserve Bank of India was not justified in granting permission to the foreign law firms to open liaison offices in India. It was further held that the expression “to practice the profession of law” in Section-29 of Advocates Act, 1961 is wide enough to cover the persons practicing in litigious matters as well as persons practicing 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.

It is relevant to note that as per the judgment delivered by Madras High Court on 21 December, 2012 in A.K. Balaji Versus Govt. of India which, inter alia, held the following:

(i) 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.

(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 advise 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.

Both the above judgments were challenged before the Supreme Court. While Bar Council of India challenged the Judgment of the Madras High Court, Lawyers Collective challenged the judgment of Bombay High Court.

The Hon’ble Supreme Court vide Judgment dated 13 March, 2018 disposed of the appeals in both matters. The Apex Court after due consideration held-

“We uphold the view of the Bombay High Court and Madras High Court in para 63 (i) of the judgment to the effect that foreign law firms/companies or foreign lawyers cannot practice profession of law in India either in the litigation or in non-litigation side. We, however, modify the direction of the Madras High Court in Para 63(ii) that there was no bar 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.”

The Apex Court held that the expression ‘fly in and fly out’ will only cover a casual visit not amounting to ‘practice.’ In case of a dispute whether a foreign lawyer was limiting himself to ‘fly in and fly out’ on casual 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 or whether in substance he was doing practice which is prohibited can be determined by the Bar Council of India.

Thus, the Apex Court had granted the Bar Council of India or Union of India the liberty to make appropriate Rules in this regard including extending Code of Ethics being applicable even to such cases.

Rajesh Narain Gupta, Managing Partner of SNG & Partners: "Entry of foreign law firms will change the landscape for law firms in India. This would overall support in a big way the ambition of India to be more visible and valuable in a global context, especially on international trade and commerce. This will be a game changer for the mid-size firms and will also help the law firm in India to achieve more efficiency in talent management, IA, technology, domain knowledge in a global context, and management."