Supreme Court to decide whether foreign law firms and lawyers should be allowed to practice in India, final hearing scheduled to start on February 27, Government yet to make its stand clear

The UPA government having left the question to be answered by Bar Council of India, it is now the turn of Modi Government to answer the question whether foreign lawyers should be allowed to make short visits to advise clients or participate in international arbitration proceedings in India.

The NDA Government is riding big on its programmes seeking to attract foreign investment and it will be interesting to see the stand it takes in the Supreme Court, which is slated to hear an appeal against the judgment delivered by Madras High Court that had allowed entry of foreign lawyers and firms.

The High Court had found out that ‘there is no bar under the Advocates Act, 1961 ("Act") or the Bar Council of India Rules ("Rules") for foreign lawyers or law firms to visit India for temporary periods on a "fly in and fly out" basis to advise their clients on foreign law and diverse international legal issues. They are however not permitted to practice Indian law, either in relation to litigation or advisory matters, unless they qualify and enroll as advocates and fulfill the requirements of the Act and Rules.’

The Court had also said, ‘activities performed by BPOs and LPOs do not constitute practice of law and hence do not conflict with the Act.’

After the judgment, Bar Council of India filed an appeal before the Supreme Court. Ardhendu Prasad, representing Bar Council of India is opposed to entry of foreign law firms/lawyers in India saying that it should be allowed only if it is on a reciprocal basis.

Reportedly, Bar Council of India is also against LPOs and BPOs saying that they cause revenue loss to the exchequer. In addition, BCI has a stand that foreign lawyers should not be allowed to undertake any litigation, non-litigation or commercial work in India.

The appeal before the Supreme Court has also united many foreign law firms, and reportedly, they have submitted that, "This issue also would affect a growing Indian economy if FDI (foreign direct investment) is restricted for lack of confidence from corporate and multinational's trying to invest here."

The foreign firms have also claimed that there is no bar regarding flying in and flying out and advising clients of non-Indian and International matters. They have also taken a stand that they do not come under the purview of Advocates Act, 1961 and Bar Council of India Rules.

Earlier, the Supreme Court, considering BCI’s plea had passed an interim order, ordering Reserve Bank of India that no foreign law firm be allowed to open any liaison offices in India. It had also said that foreign law firms should not be allowed to practice unless in conformity with Advocates Act and BCI Rules.

At least six law firms, namely, Clifford Chance, Linklaters, Ashurst, Bird & Bird, Eversheds and Clyde & Co have filed written submissions in the Apex Court, with Senior Advocate Arvind Datar representing them. The firms have prayed that they be allowed to advise clients of non-Indian law and international matters and that they will not appear before local courts or tribunals.

The final hearing of the case is scheduled to start on February 27, 2015.