India: Supreme Court Prohibits Practice Of Law By Foreign Lawyers/Law Firms In India

Last Updated: 22 May 2018
Article by Divya Harchandani

The division bench of the Hon'ble Supreme Court of India consisting of Justice A.K. Goel and Justice U.U. Lalit recently passed a crucial verdict in the matter titled Bar Council of India vs. A.K. Balaji and Ors.1 declaring that foreign lawyers/firms are not entitled to practice law in India either on the litigation or nonlitigation side unless they fulfill the requirement of the Advocates Act, 1961, and the Bar Council of India Rules.

In the petition, the main averments were that to practice law in India, a person has to be an Indian citizen and should possess a degree in law from a recognized University in India. Nationals of other countries could be admitted as advocates in India only if citizens of India are permitted to practice in such other countries. A foreign degree of law from a university outside India requires recognition by the Bar Council of India. Indian advocates are not allowed to practice law in U.K., U.S.A., Australia and other foreign nations except on fulfilling onerous restrictions like qualifying tests, experience, work permit, etc. Foreign lawyers thus, should not be allowed to practice in India without reciprocity. Under the Advocates Act ("the Act"), a foreigner is not entitled to practice in India in view of the bar contained in Section 29 of the Act. The issue arose from the judgment of Hon'ble Madras High Court in the matter of A.K. Balaji v. The Government of India 2 as well as the judgment of Hon'ble Bombay High Court in Lawyers Collective v. Bar Council of India 3.

Entry of Foreign Lawyers on "Fly-In and Fly-Out Basis"

The Hon'ble Madras High Court 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 fulfil the requirement of the Advocates Act, 1961 and the Bar Council of India Rules; however there was no bar for foreign law firms or foreign lawyers to visit India for a temporary period on a "fly-in and fly- out" basis for giving legal advice on their own system of foreign law and on diverse international legal issues. The Hon'ble Supreme Court modified the above order and clarified that the expression "fly-in and fly-out" will only cover a casual visit not amounting to "practice". In case of a dispute whether a foreign lawyer was limiting himself to "fly-in and fly-out" on a casual basis or was in substance doing prohibited legal practice can be determined by the Bar Council of India. The Bar Council of India or Union of India will be at liberty to make appropriate rules in this regard.

(International Commercial) Arbitration Proceedings in India hile the Hon'ble Madras High Court held that having 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, the Supreme Court clarified that there was no absolute right of the foreign lawyer to conduct arbitration proceedings in respect of such disputes.

The submission of foreign law firms, that if they are not allowed to take part in negotiations, for settling up documents and conducting arbitrations in India, it will have a counterproductive effect on the aim of the Government to make India a hub of International Arbitration and if foreign law firms are denied entry to deal with arbitrations in India, then India will lose many of the arbitrations to foreign countries, was also opposed by the Bar Council which stated that such submissions are made only in the business interest of foreign law firms.

The Apex Court after due consideration held that if the Rule of Institutional Arbitration applies or the matter is covered under the provisions of the Arbitration and Conciliation Act, 1996 foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act. However, they will be governed by the code of conduct applicable to the legal profession in India and Bar Council of India or Union of India are at liberty to frame rules in this regard.

Services Provided by BPO Companies

The Hon'ble Madras High Court had also held that the B.P.O. Companies providing wide range of customised and integrated services and functions to its customers 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; however, in the event of 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.

On the other hand the Hon'ble Supreme Court held that BPO companies providing a range of customized and integrated services and functions to its customers may not violate the provisions of the Advocates Act, only if the services provided 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 Act may not apply. This is a matter which may have to be dealt with on a case-to-case basis taking in considerations the facts of the situation.

Conclusion

Accordingly, Foreign law firms/companies or foreign lawyers do not have an absolute right to practice law in India and they will be governed by the code of conduct applicable to the legal profession in India. Practicing of law includes not only appearance in courts but also giving of opinion, drafting of instruments, participation in conferences involving legal discussion. The Scheme in Chapter-IV of the Advocates Act makes it clear that advocates enrolled with the Bar Council alone are entitled to practice law, except as otherwise provided in any other law. All others can appear only with the permission of the court, authority or person before whom the proceedings are pending. Regulatory mechanism for conduct of advocates applies to nonlitigation work also. The prohibition applicable to any person in India, other than advocate enrolled under the Advocates Act, certainly applies to any foreigner also.

Footnotes

1 Civil Appeal Nos. 7875-7879, 7170 and 8028 of 2015; Decided on 13.03.2018

2 AIR 2012 Mad 124. Civil Appeal No. 7875-79 of 2015

3 2010 (2) Mah LJ 726, Civil Appeal No. 8028 of 2015

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