'Do Not Allow Foreign Law Firms To Operate In SEZs' : Bar Council Of Delhi Writes To PM [Read Letter]

The Bar Council of Delhi (the Council) has written a letter to the Prime Minister raising objections against the permissions granted to foreign law firms to open their offices in Special Economic Zones (SEZs) in India.

The council submitted that the objection with regard to opening or operation of foreign law firms in India is not a fresh one and all the bodies of lawyers across India, including the Bar Council of India and other State Bar Councils, have made their stand on this proposition very clear. In this regard, the Apex Court had also passed orders in Bar Council of India v. AK Balaji & Ors., directing the Reserve Bank of India (RBI) to not permit opening of foreign law firms in the country, nor to renew the permissions already granted to foreign law firms before the court's orders.

However, despite this settled position, RBI has updated "FED Master Direction No. 102015-16" to include professional or consultancy services rendered by persons resident outside India under Annexure C of Para 7(ii), says the BCD. The Rules framed under SEZ Act, 2005 have also been amended to include "legal services" within the word "services" vide notification dated 03.01.2017. Further, provisions have been made under "Foreign Exchange Management (Establishment in India or Branch Office or Liaison Office or Project Office or any other place of business) Regulations, 2016" to include legal profession within the definition of "stand-alone basis" under Regulation 2(h).

The Council has contended that these directions and regulations have the effect of permitting foreign law firms to open offices within SEZs and are contrary to the provisions of Advocates Act, 1961. Further, these decisions have been taken unilaterally and they thus violate the provisions of reciprocity under the Act of 1961. It has been submitted by way of this letter that these directions and regulations are against the interests of legal fraternity of the country and a request has been made withdraw the same. The Council has also submitted that Society of India for Law Firms or any other body of lawyers has no locus standi in the matter and all communications in this regard should be made to apposite Bar Councils. 

The BCD has therefore sought for the recall of the 'Master Directions' of the RBI, amendment of Rule 76 of SEZ Rules and Foreign Exchange Management( Establishment in India or Branch Office or Liaison Officer or Project Office or any other place of business ) Regulations 2016 to the extent they relate to legal profession.

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