If We Bar Foreign Law Firms And Lawyers, Would That Not Stop India From Becoming The Hub Of Activities? Asks SC
“If we bar the foreign law firms and lawyers, would that not stop India from becoming the hub of activity? Even the Madras High Court has taken exception to the Bombay High Court judgment in respect of international commercial arbitration and advisory services on a fly-in and fly-out basis”, asked the Bench.
As the hearing in the foreign law firms case resumed on Wednesday before the Supreme Court bench of Justice Adarsh Kumar Goel and Justice UU Lalit, Nakul Dewan, appearing for petitioner Global Indian Lawyers, submitted, “We are challenging the 2009 Bombay High Court judgment in Lawyers Collective v BCI, in so far as it forbade foreign law firms from establishing liaison offices in India unless enrolled under the Advocates Act of 1961”.
“Who are you representing basically,” inquired the bench.
“We are a registered society of lawyers qualified in India as well as outside India. We are only an association, not a law firm,” he replied.
“So the members of the association could plead alone. The functioning of the society is different from that of its individual members,” remarked the bench, allowing Dewan to proceed with his submissions.
Offering a bird’s eye view of his arguments, he advanced, “Our first submission is that the Act of 1961 does not apply to law firms, but only to individual lawyers. Second, the Advocates’ Act does not restrict an Indian qualified lawyer from becoming dual qualified. Third, the provision of reciprocity under sections 24 and 47 of the Advocates’ Act is based on citizenship alone. And fourth, in context of sections 29, 30 and 33 of the Act of 1961, ‘to practice the profession of law’ is intended to mean only Indian law”. Regarding the second submission, he clarified that he is not suggesting that an English qualified lawyer could come to India to practice Indian law.
In respect of the fourth submission, Dewan said the same was not argued before Madras High Court in the 2012 case of AK Balaji v BCI. In response, senior counsel Sajan Poovayya advanced, “Before the Madras High Court, our submission was that we are foreign law firms who do not deal in Indian law”.
“What is the effect of multiple functions like market research, consultancy, management and other support services? Does this take one out of the scope of the Advocates Act,” asked the bench. Dewan said the query would be addressed over the course of the hearing.
“So you support the 2012 Madras High Court judgment in so far as it allows foreign lawyers and firms to offer advisory services in India on a ‘fly in and fly out’ basis? In fact, you are suggesting that even establishing offices is permissible. So what you are saying is ‘fly in and stay’,” the bench remarked on a humorous note.
“Like Tata bought Jaguar ...,” the advocate began. “Indians can study foreign law and advice Tata here in India. Similarly, American lawyers enrolling and settling in India is not the issue, but setting up a branch office here while the head office is in the USA is the concern,” noted the bench.
Responding to Dewan’s first argument on the non-applicability of the Advocates’ Act to firms, the bench stated, “But if the Act imposes a bar on a single individual, the bar shall also extend to a group of individuals. The Act gives monopoly to an enrolled ‘advocate’. So where is the scope for any other person?”
On reference by Dewan to portions of the Bombay High Court judgment wherein it was observed that the RBI could not have validly granted permission to the foreign law firms under section 29 of the FERA, 1973 to open liaison offices in India and that to engage in litigious as well as non-litigious matters in India enrolment under the Advocates Act is mandatory, the bench said, “So this is the bar? That if you do not enrol, you cannot set up office in India?”
In response, Dewan articulated the points for determination: “Does the law firm have to be enrolled? Now foreign law firms cannot set up offices in India because of the Bombay High Court judgment. Also, can a firm have Indian as well as non-Indian qualified lawyers?”
“If a member is enrolled and he forms a firms with other enrolled members, then there is no objection,” stated the bench.
At this juncture, senior counsel CU Singh, appearing on behalf of the BCI, advanced, “Four enrolled ‘advocates’ can form a firm, but cannot work with a non-advocate. Four ‘advocates’ could have firm called ‘White & Case’ but cannot be controlled by the US-based firm White & Case. As soon one becomes an employee, the sanad has to be surrendered.”
As the hearing for the day drew to an end, the bench posed a question to CU Singh: “If we bar the foreign law firms and lawyers, would that not stop India from becoming the hub of activities? Even the Madras High Court has taken exception to the Bombay High Court judgment in respect of international commercial arbitration and advisory services on a fly-in and fly-out basis”.
The hearing shall continue on Thursday and is expected to be concluded then.