By Sangeeta Sharma
Lalit Bhasin, President of the Society of Indian Law Firms (SILF), has said that the country was open to the entry of Foreign Law Firms in India, but the Advocate’s Act needs to be amended to provide them a smooth passage.
Speaking at a conference organised by the Federation of Indian Corporate Lawyers (FICL) in Delhi on Friday, Bhasin said that the federation was not opposed to the entry of Law firms in India, but there were many technical issues which need to be looked into.
On March 10, 2023, the Bar Council of India had notified Rules and Regulations of entry of Foreign Lawyers and Law firms to India but the things were not very clear.
Though the BCI came out with clarifications on March 19, 2023 imposing some restrictions on the incoming law firms, the legal aspect of their entry still remains unclear.
Lalit Bhasin said that Indian Law firms are now prepared and equipped to welcome the foreign law firms in India but there is a technical lacunae in the entire process.
Bhasin said SILF was formed in early 90’s at that time very few law firms were operating in India. From early 90’s till 2004, SILF was virtually opposing the entry of Foreign Law Firms to India.
He said the resistance was not on flimsy grounds, as the Federation was not prepared. At that time, there were hardly any law firms in India. But after liberalisation in the 90’s, there was lot of work for the Legal fraternity.
The introduction of 5-year law course added a lot of talent to the battery of lawyers. Good law firms started coming up and brought in a revolutionary change in the Indian legal system.
Bhasin said that by 2014, the Indian law firms were ready to face the healthy challenge and compete with foreign law firms.
The Ministry of Commerce sought suggestions from SILF on the entry of law firms. At that time, the Commerce Ministry was the nodal agency.
A group was formed under the Secretary of the Ministry of Commerce and an inter-ministerial committee was formed to discuss the issue. SILF was also part of the deliberations and supported the entry of law firms in India, Bhasin said.
Then in 2012 a writ petition was filed in Madras High Court by an Advocate AK Balaji seeking directions restricting the entry of foreign lawyers and law firms in India.
The petitioner contended that as per the advocates act only Indian citizens can practice Law in India and foreign lawyers and law firms should be banned to appear before courts and also should not indulge into giving any advise.
A person should be a citizen of India and should possess a Degree in Law obtained from a Recognized University within the territory of India, the petitioner said.
The petition further stated that the Law Graduates from India are not allowed to practice the profession of law in United Kingdom, United States of America, Australia and various other foreign nations.
The Act simply provides that a foreigner may be admitted as an Advocate, if Indian nationals are permitted to practice law in his/her country.
It is stated that allowing entry of foreign law firms without any reciprocal arrangement similar to that of the arrangements prevailing in those foreign countries should not be entertained, and foreign law firms should not be allowed to exploit the Indian legal market without actually opening up their domestic markets to the Indian lawyers.
The petitioner contended that foreign law firms did not get any permission either from the Government of India or from the Bar Council of India, from any State Bar Council, from the Tax Department or the Reserve Bank of India for transacting business within the country and repatriating the funds out of the country, so practicing of foreign lawyers and law firms in India is illegal and impermissible.
While the legal position is such, under the guise of LPO and conducting seminars and arbitrations, the foreign lawyers are visiting India under Visitors Visa and are earning money from their clients in India.
By doing so, they also violate the provisions of Income Tax Laws and Immigration Laws, and also cause loss of revenue to our country’s Exchequer.
They have also opened up their offices in India and are actively doing legal practice in the fields of Mergers, Take-overs, Acquisitions, Amalgamations, etc. Disciplinary Authority.
It was also stated that in India, legal profession is considered as a noble profession, intended to serve the society, and not treated as a business venture. But, it is not so for the foreign law firms, which are treating it as a trade and business venture for earning money.
It was submitted that here in India, the lawyers are prohibited from advertising, canvassing and soliciting work. No lawyer in India is permitted, either through print media or through electronic media or in any other form, to canvass or solicit work or market the profession.
Whereas the foreign law firms, who were impleaded in the petition were glaringly advertising through their websites about their capabilities and they also were canvassing and soliciting work by assuring results.
It clearly shows that they were treating the legal profession as nothing short of a trade or business, far different from the nobility attributed to it by Indian lawyers, the petitioner pleaded.
The Union of India filed four counter affidavits on August 19,2010, November 24, 2010, April 19,2011 and November 17, 2011.
In one of the counter affidavits, the government stated that the Bar Council of India, which has been established under the Advocates Act, 1961, regulates the advocates who are on the Rolls, but law firms as such are not required to register themselves before any statutory authority, nor do they require any permission to engage in non-litigation practice.
Exploiting this loophole, many accountancy and management firms are employing law graduates who are rendering legal services, which is contrary to the provisions of the Advocates Act.
It is stated that the Government of India along with the Bar Council of India is considering this issue and is trying to formulate a regulatory framework in this regard because if the foreign law firms are not allowed to take part in negotiations, settling up documents and arbitrations in India, it will have a counter productive effect on the aim of the government to make India a hub of International Arbitration.
A Joint Consultative Conference of the Members of the Bar Council of India and the Chairmen, Vice-Chairmen, and Executive Committee Members of the State Bar Councils was held at Kochi on November 17 and 18, 2007 it was decided not to relax any of the statutory norms for practice of law in India by exercising the powers conferred to the Bar Council of India under Section 47(2) read with Section 49(1)(e) of the Advocates Act, 1961.
Finally, it is stated that the provisions of the Advocates Act, 1961 would apply with equal force to both litigious and non-litigious practice of law, and only persons enrolled under Section 24 of the Act can engage in the same.
The Respondent Law firm said that there are lot of Indian lawyers practising in English Courts after their re-qualification as English solicitors.
Therefore, it is false to say that work permits to Indian lawyers are almost always being refused. It is further stated that the issue of reciprocity is in the realm of the policy of the Government of India and it cannot and ought not to be agitated before this Court.
Dr. Abhishek Manu Singhvi, Senior Advocate appearing on behalf of some of the respondent-law firms based in the United States argued that the two main questions, that whether foreign lawyers can come to India for the purpose of offering legal advise to their clients on foreign law and whether any provision of law prohibits practice of foreign law in India have not been decided by the Division Bench of the Bombay High Court.
Dr Singhvi further referred to the Arbitration and Conciliation Act, 1996 where a specific provision is contained in Section 2(1)(f) which provides for international commercial arbitration for resolving disputes arising out of legal relationships where at least one of the parties is an individual or a body corporate of a foreign origin.
Even the Preamble to the said Act states that the General Assembly of the United Nations having recommended that all countries give due consideration to the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law (UNCITRAL) and the UNCITRAL Conciliation Rules, the parties are required to seek amicable settlement of disputes arising in the context of international commercial relations by recourse to conciliation.
The Madras High Court bench comprising its Chief Justice M Y Eqbal and Justice TS Sivagnanam on February 21, 2012, after hearing all the parties, considering both on facts and on law, ruled that the foreign law firms or lawyers cannot practice the profession of law in India either on the litigation or non-litigation side, unless they fulfill the requirement of the Advocates Act, 1961 and the Bar Council of India Rules.
However, the Court ruled that 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.
The High Court further held that with 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.
Regarding the B.P.O. Companies providing wide range of customised and integrated services and functions to its customers in India, the High court said that services like word-processing, secretarial support, transcription services, proof-reading services, travel desk support services, etc. do not come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules so it is allowed to carry on such services.
In case any complaint made against these B.P.O. Companies violating the provisions of the Act, the Bar Council of India may take appropriate action against such erring companies, the High Court held.
The said judgement of the Madras High Court was challenged by the Bar Council of India (BCI) in the Supreme Court of India
The Supreme Court bench Comprising Justice Adarsh Kumar Goel and Justice Uday Umesh Lalit on March 13, 2018 held that the legal professionals, law firms, and companies carrying out non-litigation practice are also subject to the requirements of the regulatory framework of the Act and the Bar Council of India rules.
This being the first instance at which the companies and firms carrying out the legal profession are being recognised.
The Apex Court directed the Bar Council of India to frame appropriate rules on this matter. This shall apply to foreign lawyers and foreign law firms. The court held that there will be no absolute bar on foreign law firms from conducting international commercial arbitration.
The Apex Court also ruled that the foreign lawyers and law firms may visit India to give legal advice provided that their visit is not for a casual purpose. The purpose of each visit will be determined on a case-to-case basis. The court held that there is no strict violation of the business process outsourcing providing integrated services that are covered under the Act.
Bhasin said that since the Supreme Court has also affirmed that according to the rules only Indian citizens can practice law here, so it becomes mandatory for Bar Council of India to first amend the Advocate’s Act.
Once the Advocate’s Act was amended and integrate nationals from other countries to this Act, then the SILF would be able to welcome the Foreign Law Firms into India. This amendment can be done on reciprocity basis or by any other provision of law can be debated upon, Bhasin said.
Additional Solicitor General (ASG) Jayant Sood said that right now we are at a stage where we are testing the water. It was not a case that we are allowing the foreign Law firms with full bag and baggage. We are providing them just a jurisdictional comfort. Giving access to foreign law firms in a limited and restricted manner is a good step of Indian Government, this will open trade avenues, the ASG said.
Bhasin said that SILF wanted to support Prime Minister Narendera Modi’s vision, who wanted India to be the hub of Arbitration. He said the federation wanted to have a dialogue with the BCI and the government to bring about a solution to this anomalous situation.