SUPREME COURT RULES THAT FOREIGN LAWYERS OR FIRMS CANNOT PRACTISE LAW IN INDIA
On Tuesday, 13th March 2018, the Supreme Court in the matter Bar Council of India vs. A.K. Balaji and Ors., held that foreign law firms and lawyers cannot open offices or practise profession of law in India either on the litigation or non-litigation side. However, the Supreme Court allowed casual visits by foreign lawyers on a “fly in and fly out” basis for rendering legal advice to clients in India.
The matter was heard by a Bench comprising of Justice A.K. Goel and Justice U.U. Lalit. The matter arose from two appeals which were challenging the Madras and Bombay High Court Judgments on foreign lawyers practising in India.
The Judgment of the Bombay High Court on 16th December, 2009 in Lawyers Collective vs. Bar Council of India, held that the RBI was not justified in allowing foreign law firms to establish liaison offices in India. It had then ruled that such foreign law firms can establish their offices in India only after being enrolled as advocates under the Advocates Act, 1961. This Judgment was challenged in the Supreme Court by the Global Indian Lawyers Association.
The Judgment of the Madras High Court in February 2012 in Global Indian Lawyers vs. Bar Council of India &Ors., held that foreign lawyers and law firms are not permitted to practice law in India either on the litigation or non-litigation side without complying the requirements of the Advocates Act and the Bar Council of India (BCI) Rules. The Court had held that there is no bar on such persons from visiting India for a temporary period on a “fly in and fly out basis”, for providing legal advice to their clients regarding foreign law or their own system of law and on diverse international legal issues. It had further held that there is no restriction against them coming to India for conducting arbitration proceedings in disputes involving international commercial arbitration. This decision of the Madras High Court had been appealed against by the Bar Council of India. (BCI).
However, the Supreme Court in the present matter modified 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 Supreme Court held and thereby clarified 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 or whether in substance he was doing practice which is prohibited can be determined by the BCI. The Court ruled that, “If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act. However, they will be governed by code of conduct applicable to the legal profession in India. Bar Council of India or the Union of India are at liberty to frame rules in this regard.”
The Court said Business Process Outsourcing (BPO) companies providing a range of services to customers like word processing, secretarial support, transcription and proof reading services, travel desk support services and others would not come under the Advocates Act. Thus, the Court ruled that BPO’s would not violate provisions of the Advocates Act only if their activities do not amount to ‘practice of law’ as defined earlier.
On the issue whether the expression ‘practise the profession of law’ includes only litigation practice or non-litigation practice also, the Court held that the practice of law includes litigation as well as non-litigation activities. It relied on the Judgment in the case of Pravin C. Shah vs. K.A. Mohd. Ali to hold: “Ethics of the legal profession apply not only when an advocate appears before the Court. The same also apply to regulate practice outside the Court. Adhering to such Ethics is integral to the administration of justice. The professional standards laid down from time to time are required to be followed. Thus, we uphold the view that practice of law includes litigation as well as non-litigation.”
The Supreme Court has finally put to an end a burning topic that was of great interest to the legal profession. It is now clear foreign law firms/companies or foreign lawyers cannot practice profession of law in India, neither in the litigation nor in the non-litigation side.
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