The Supreme Court has drawn the curtain on the issue of foreign law firms and lawyers practising in India. In a landmark judgment, a Bench of Justices Adarsh Kumar Goel and Uday Umesh lalit ruled last week that foreign law firms or foreign lawyers cannot practise law in India, either on the litigation or on the non-litigation side. This implies that overseas lawyers or firms cannot open offices in India or appear in courts or before any authority or render any other legal services such as giving opinions and drafting documents. The Bench, however, held that there is no bar on foreign law firms or foreign lawyers visiting India for a temporary period on a “fly in and fly out” basis for giving legal advice to their clients on foreign law or their own system of law and on diverse international legal issues. The Supreme Court further said the expression “fly in and fly out” shall only cover a casual visit not amounting to practice and any dispute in this regard would be decided upon by the Bar Council of India. The court also ruled that foreign law firms and lawyers don’t have an “absolute right” to conduct arbitration proceedings and handle disputes arising out of contracts relating to international commercial arbitration. Though foreign lawyers and law firms may not be debarred from conducting arbitration in India arising out of international commercial arbitration, they would be governed by the code of conduct applicable to the legal profession in India. The court further stated that Business Process Outsourcing (BPO) companies providing a range of services to the customers like word processing, secretarial support, transcription and proof reading services, travel desk support services and others would not come under the Advocates Act.
The Supreme Court’s ruling deals with the longstanding issue whether foreign firms or attorneys should be allowed to enter the Indian legal market. A large section of the Indian legal fraternity has been opposing their entry, contending that Indian advocates are not allowed to practise in the UK, the US, Australia and other nations except on fulfilment of onerous restrictions like qualifying tests, experience and work permit. It was also argued that the foreign lawyers cannot be allowed to practise in India without reciprocity. This important case involved 32 law firms from various countries which placed their cause before the court. They had also argued that there was no bar on a company carrying on consultancy or support services.
The previous UPA Government and the present NDA Government were seriously considering a proposal to permit foreign law firms in the country to practise law in matters not involving litigation on a reciprocal basis. In 2011, the Union law Ministry had informed the Madras High Court that it was holding consultations with the Bar Council of India to consider amending the Advocates’ Act in a suitable manner. A section of the India’s legal fraternity has been opposing entry of foreign law firms and lawyers. There has been opposition from the Bar Associations of the country. A committee was set up by the Commerce Ministry in 2005 to consider opening up legal services. lawyers have been vocal against the Government succumbing to international pressure. It was argued that foreigners could practise law in India if they were enrolled in the Bar Councils and citizens of India possessing law degree from a recognised university of the country.
The foreign law firms had the backing of their respective Governments. They have been mainly lobbying for an access to the non-litigation market which has an enormous increase after globalisation. The apex court has recognised a limited access to foreign firms in the field of arbitration. It should be limited to matters governed by international commercial arbitration agreements. In these cases, the code of conduct applicable to the legal profession in the country has to be followed, the court has opined.
Opinions among legal experts stand divided with the Supreme Court’s recent ruling. The foreign firms cannot set up offices or practise in India but can “fly in and fly out lawyers to offer legal advice.” The judgment of the court, according to some experts, reflects the spirit of the Advocates’ Act as currently in place and the rules of the profession as laid down by the Bar Council of India. Regarding “fly in and fly out”, the court has been cautious enough to say that such instances should be casual and not frequent. The Bar Council of India had been strongly opposing the idea of foreign firms and lawyers appearing in India and wanted a regulation even for lawyers who “fly in and fly out” for legal advice. According to the Bar Council of India, they should follow the Advocate Act, 1961 and the rules laid down under the Act by the BCI. If any foreign lawyer commits any professional misconduct, they can be held accountable and disciplinary action can be initiated.
The Supreme Court has settled the issue as to whether the Indian legal services sector can be opened to the overseas players. Practice of law includes litigation and non-litigation work. lawyers’ ethics apply not only to the appearances before the court but also to practise outside the courts. The court finally brought an end to the controversy by permitting foreign lawyers to visit on a “fly in and fly out” basis but not on a regular but in a casual manner. If the visits are on a regular basis, it may amount to practising law. The court expects the BCI and or the gGovernment to make appropriate rules in this regard.
The Supreme Court has dealt with the issues that vitally affect the future of the legal profession in India and provided a small window, but not permitted an open access. There is an upsurge in the legal profession during the last few years. A large number of bright students are entering the National law Universities and the five year degree courses. They should clearly know their future prospects and not have an uncertain future depending on the uncertainties regarding access to the foreign firms and foreign lawyers. In this, the younger lawyers have a bigger stake as it involves their future prospects. The elder lawyers have vested interests in not having unnecessary unauthorised competition from foreign firms. The students of law studying in leading universities must lend their serious attention to this vital issue. The Supreme Court has shut the door on foreign firms and lawyers, but there is a window left open by the court which may be misutilised to subvert the spirit of the restrictions. Bar Associations and legal academia should forward their views to the BCI and articulate the necessary legislation including subordinate legislation to fully implement the judgment that has brought to rest a very vital aspect of the legal profession in India. The issues may appear to be concerning only lawyers, but they have wider sociological ramifications. A concerted, organised and well-informed viewpoint would contribute to the implementation of the judgment of the Supreme Court in an effective manner. All heads must be put together to evolve a reasonable framework so as to ensure that the Indian legal fraternity is not subjected to handicaps and there is regulation of the access of the foreign firms and lawyers to the Indian legal market. This affects the entire community and is not confined to any particular sections as it involves an important issue relating to our Constitutional and legal framework relevant to our legal profession. Surely, this concerns us all!
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha. jayantdas@hotmail.com)