The Position of Foreign Law Firms In India

By Arpit Sinhal

The Advocates Act, 1961 (“Advocates Act”) is a law enacted to provide one class of legal practitioners, specifying academic and professional qualifications necessary for enrolling as a practitioner of Indian Law. Section 2(a) of Advocates Act defines ‘Advocate’ to mean an advocate entered in any roll under provisions of Advocate Act. It means that only Indian citizens with a Law Degree from a recognized Indian University could enroll as Advocates under Act. Exceptions are provided under proviso to Section 24(1)(a), Section 24(1)(c) (iv) and Section 47(2) of Act.

Sections 24 and 29 of the Advocates Act provides that only persons who are citizens of India are eligible to be enrolled to practice the profession of law before the Indian Courts. However, the Bar Council of India (“BCI”) has got the power under Section 47(2) read with Section 49(1)(e) to provide for relaxation of such a condition. Further, Section 29 of Foreign Exchange Regulation Act, 1973 (“FERA”) empowers Reserve Bank of India (“RBI”) to grant permission to carry out trading, commercial or industrial activity in India.

Thus, the important of question of law which arises here is that whether foreign law firms are allowed to practice in India?

Bombay High Court in case of Lawyers Collective v. Bar Council of India [2010 (2) BomCR 753: 2010 (112) BOMLR 32] has held that since foreign law firms engaged in practicing the profession of law cannot be said to be engaged in industrial, commercial or trading activities. No permission can be granted by RBI to foreign law firms to open liaison offices in India under Section 29 of the FERA. The Court further held that Section 29 of the Advocates Act clearly provides that from the appointed day only Advocates are entitled to practice the profession of law whether before any Court/Authority or outside the Court by way of practice in non-litigious matters and therefore, foreign law firms not enrolled as Advocates in India cannot practice in non-litigious matters in India.

The issue was again raised before the Madras High Court in case of A.K. Balaji v. The Government of India [AIR 2012 Mad 124]. The court held that foreign law firms or foreign lawyers could not practice profession of law in India either on litigation or non-litigation side, unless they fulfilled requirement of Advocates Act and Bar Council of India Rules, 1975 (“BCI Rules”). The court further held that the term “practice” would include both litigation as well as non-litigation work, which was better known as chamber practice. Therefore, rendering advice to a client would also be encompassed in term “practice”. However there is no bar either in Advocate Act or BCI Rules for foreign law firms or foreign lawyers to visit India for a temporary period on a “fly in and fly out” basis, for 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. The case also referred to the judgement of Supreme Court in case of Vodafone International Holdings B.V. vs. Union of India and another [S.L.P. (C) No. 26529 of 2010], where Hon’ble Court has observed that every strategic foreign direct investment coming to India, as an investment destination should be seen in a holistic manner

Finally in case of Bar Council of India v.  A.K. Balaji and Ors. [(2012) 3 Comp LJ 302 (SC)], it was clarified that RBI would not grant any permission to foreign law firms to open liaison offices in India under Section 29 of the FERA. It was also clarified that expression “to practice profession of law” under Section 29 of Advocates Act covers persons practicing litigious matters as well as non-litigious matters other than contemplated in impugned order.

Hence now it is well settled position of law under that foreign law firms are not allowed to practice in India.


Arpit Sinhal is a final year student at HNLU


 

Leave a Reply

Your email address will not be published. Required fields are marked *