Analyzing The Foreign Lawyers/Law Firms Entry Ban Judgment

Analyzing The Foreign Lawyers/Law Firms Entry Ban Judgment

The Supreme Court, speaking through Justice AK Goel and Justice UU Lalit, recently held that foreign law firms/lawyers are not permitted to practice the profession of law in India. The bench decided civil appeals challenging two orders: one by the Madras High Court which had held that foreign law firms or foreign 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 but had, however, permitted 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 other was by the Bombay High Court which had also held that the RBI was not justified in granting permission to foreign law firms to open liaison offices in India and that the expressions 'to practise the profession of law' in Section 29 of the 1961 Act was wide enough to cover the persons practising in litigious matters as well in non-litigious matters and, therefore, even to practise in non-litigious matters in India, the foreign lawyers or law firms were bound to follow the provisions contained in the 1961 Act.

The Supreme Court upheld both decisions with slight positive modifications. The decision not only upholds the law in true spirit and intent but also guarantees that foreign lawyers or foreign law firms will be subject to the regulatory mechanism of the apex regulator i.e. the BCI.

It is important to have a glance at few extremely relevant statutory provisions in this regard. Section 29 of the 1961 Act holds that there shall be only one class of persons entitled to practise the profession of law, namely, advocates. Section 30 holds that every enrolled advocate shall be entitled as of right to practice in India (i) in all Courts including the Supreme Court; (ii) before any tribunal or person legally authorized to take evidence; (iii) before any other authority or person before whom such advocate by or under any law for the time being in force entitled to practise. Section 32 grants power to any ‘Court, authority or person’ to grant permission to any person to appear before her. Section 33 states that no person shall be entitled to practice in any Court or before any authority or person unless he is enrolled as an advocate under this Act. Section 45 mandates that any person who practises in any court or before any authority or person, in or before whom he is not entitled to practice under the provisions of the Act, shall be punishable with imprisonment for a term which may extend to six months.

Therefore, once a person is enrolled as an advocate, she is entitled to practise the profession of law in litigious matters as well as non-litigious matters. The BCI can only regulate advocates enrolled with a state bar council and not foreign lawyers in absence of rules and unless any other law so permits, no person can practice before any ‘Court, authority or person’ other than an Advocate. In particular cases, such ‘Court, authority or person’ may permit a person u/s 32 of the Act other than an advocate to appear before her.

It is pertinent to note that the entire argument of the foreign law firms was based on the premise that permitting foreign law firms and lawyers to open offices in India and practice the profession of law in India will help India in developing a diplomatic relationship as well as becoming an international hub, especially for commercial arbitration. Interestingly, no such argument was made by the Union of India and no other government of any other country participated in the court proceedings. So it was only private agencies who argued for the betterment of legal services in India.

The court crafted five questions of law:

(i)Whether the expression ‘practise the profession of law’ includes only litigation practice or non-litigation practice also;

(ii) Whether such practice by foreign law firms or foreign lawyers is permissible without fulfilling the requirements of Advocates Act and the Bar Council of India Rules;

(iii) If not, whether there is a bar for the said law firms or lawyers to visit India on ‘fly in and fly out’ basis for giving legal advice regarding the foreign law on diverse international legal issues;

(iv) Whether there is no bar to foreign law firms and lawyers from conducting arbitration proceedings and disputes arising out of contracts relating to international commercial arbitration;

(v) Whether BPO companies providing integrated services are not covered by the Advocates Act or the Bar Council of India rules.

The bench, speaking through Justice Goel, held that practice of law includes litigation as well as non-litigation. Practicing of law includes not only appearance in courts but also giving of opinion, drafting of instruments, participation in conferences involving legal discussion. Foreign lawyers and law firms cannot practice the profession of law in India except by obtaining permission from such ‘Court, authority or person’ u/s 32 of the Act. It further held that visit of any foreign lawyer on ‘fly in and fly out’ basis will amount to practice of law if it is on regular basis. Only a casual visit for giving advice on a temporary basis is permissible. Whether a particular visit is casual or frequent so as to amount to practice is a question of fact to be determined from situation to situation and BCI or Union of India are at liberty to make appropriate rules in this regard. It categorically rejected the plea that a foreign lawyer is entitled to practice foreign law in India without subjecting himself to the regulatory mechanism of the BCI Rules. The Advocates Act also deals with companies or firms and not only individuals. It further held that it is incorrect to say that there is absolutely no bar to a foreign lawyer for conducting arbitrations in India. If the matter is governed by particular rules of an institution or if the matter otherwise falls under Section 32 or 33, such proceedings may be conducted in a prescribed manner. If the matter is governed by an international commercial arbitration agreement, the conduct of proceedings may fall under Section 32 or 33 read with the provisions of the Arbitration Act. However, the bench observed that even in such cases, Code of Conduct, if any, applicable to the legal profession in India has to be followed. It is for the BCI or Central Government to make a specific provision in this regard if considered appropriate. Regarding BPO companies providing range of customized and integrated services and functions to its customers, it was held that it may not violate the provisions of the Advocates Act, only if the activities in pith and substance do not amount to ‘practice of law’. The manner in which they are styled may not be conclusive. If their services do not directly or indirectly amount to practice of law, the Advocates Act may not apply. This is a matter which may have to be dealt with on case to case basis having regard to a fact situation.

The judgment, therefore, gives vast powers to the BCI to not only regulate the entry of foreign lawyers but also to check if a foreign lawyer/ law firm is coming on a temporary casual visit or is actually practicing in India. The penal provision under Section 45 will thereafter kick in if any unauthorized lawyer not enrolled in India practices the profession of law. Whether BCI or Union of India makes rules in this regard is left to their respective wisdom.

The judgment, however, omits to discuss few issues which were debated across the bar e.g., whether rendering opinions by retired judges amounts to practice the profession of law etc. It nevertheless is a welcome decision and while upholding the majesty and rule of law it shows that the bench understood the undeclared aspects of the arguments surfaced by the foreign law firms as well.

Namit Saxena is a Lawyer practicing in the Supreme Court of India. He was the briefing counsel for the BCI in the matter. He can be reached at namitsaxenaoffice@gmail.com.

[The opinions expressed in this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of LiveLaw and LiveLaw does not assume any responsibility or liability for the same]