In a move that could potentially change the landscape of legal practice in the country, the Bar Council of India (BCI) has allowed foreign lawyers and law firms to practise in India. Although they cannot appear in court, they can advise clients on foreign law and work on corporate transactions.
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Dimensions of the Article:
- What is the BCI decision?
- What do the new BCI rules allow for foreign lawyers and law firms in India?
- How have foreign law firms operated in India so far?
What is the BCI decision?
- The Bar Council of India (BCI) has notified the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022.
- BCI is a statutory body established under the Advocates Act, 1961, regulating legal practice and legal education in India that was previously opposed to foreign law firms’ entry into India.
- BCI has now allowed foreign law firms to operate in India, citing reasons such as addressing concerns about the flow of Foreign Direct Investment in the country and making India a hub of International Commercial Arbitration.
- The new rules bring legal clarity to foreign law firms that currently operate in a very limited way in India.
- BCI has resolved 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.
What do the new BCI rules allow for foreign lawyers and law firms in India?
- The new Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 allows foreign lawyers and law firms to register with the Bar Council of India (BCI) to practice in India if they are entitled to practice law in their home countries.
- However, foreign lawyers and law firms cannot practice Indian law.
- They are not permitted to appear before any courts, tribunals or other statutory or regulatory authorities in India.
- Foreign lawyers and law firms are only allowed to practice transactional work or corporate work, such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts, and other related matters on a reciprocal basis.
- The notification also states that they are not permitted to do any work related to conveyancing of property, title investigation, or other similar works.
- Indian lawyers working with foreign law firms will also be restricted to engaging only in “non-litigious practice.”
How have foreign law firms operated in India so far?
- The issue of foreign law firms entering the Indian market first arose in 2009 with a challenge before the Bombay High Court in the case of ‘Lawyers Collective v Union of India.’
- The Bombay High Court interpreted Section 29 of the Advocates Act to mean that only advocates enrolled with BCI can practise law in India, and that ‘practice’ would include both litigious and non-litigious practice. As a result, foreign firms could neither advise clients in India nor appear in court.
- In 2012, the Madras High Court considered the issue in ‘AK Balaji v Union of India’ and held that foreign firms cannot practise law either on the litigation or non-litigation side unless they meet the requirements and rules laid down by the Advocates Act and the BCI rules.
- In 2015, the Supreme Court recognised the practice of foreign law firms in a very narrow sense in the same case, ‘AK Balaji v Government of India.‘ Over 32 foreign law firms from the UK, the US, France and Australia were impleaded as respondents in the case.
- The Madras High Court, however, created an exception to the ban on foreign law firms. It allowed temporary visits or advising clients on a “fly in and fly out” basis, i.e., for the purpose of giving legal advice to clients in India regarding foreign law or their own system of law and on diverse international legal issues.
- BPOs and LPOs also arrived in India on a large scale, carrying out backend work for US-based companies and support operations for lawyers. However, they operated in uncertain legal frameworks and the Supreme Court had to intervene to settle the law on the issue.
What was the SC’s decision?
- In 2018, the Supreme Court upheld the earlier judgments of the Madras and Bombay High Courts disallowing foreign law firms and lawyers to practise in India.
- However, the SC made some modifications, stating that the expression “fly in and fly out” only covers casual visits that do not amount to practice.
- The SC did not make any decision on the fate of Legal Process Outsourcing (LPOs), stating that they primarily offer services such as secretarial support, transcription services, proofreading services, and travel desk support services, which do not come under the purview of the Advocates Act or the BCI Rules.
Source: Indian Express