Trivedi and Parashar (Advocates and Solicitors)
Supreme Court -
I. SUPREME COURT’S CLARIFICATION ON THE SCOPE OF SERVICES OF FOREIGN LAW FIRMS & LAWYERS IN INDIA.
The landmark decision in the matter of Bar Council of India v. AK Balaji & Ors. [2018 5 SCC 379], the Supreme Court has clarified the scope of services of foreign law firms in India. The case arose as an appeal from the decision of the Madras High Court in a Public Interest Litigation seeking directions restricting foreign lawyers/law firms in India. The issue before the Madras High Court was whether foreign lawyers and law firms can practice in cases of litigation and commercial transactions in India.
It was held that foreign lawyers/law firms could participate in negotiations, document settlements, and arbitrations. Consultancy and support services provided by foreign lawyers/law firms were not prohibited because they could not be classified as mainstream legal practice. However, it was also laid down that India does not prohibit foreign law firms/lawyers from participating in International Commercial Arbitration. Furthermore, the right of foreign parties to choose a counsel of their own choice and jurisdiction was recognized. It is legal for foreign lawyers/law firms to "fly in and fly out" of India to advise Indian clients on foreign Law. The Court further observed that several accounting and management firms are employing law graduates to provide legal services, which is against the Advocates Act, 1961 (“Act”), and noted that the Bar Council of India has the authority to take necessary action against any such violation.
On the other spectrum is the case of Lawyers Collective v. Bar Council of India [2009 SCC OnLine Bom 2028] wherein the issue was whether without being enrolled as an Advocate under the Act whether foreign law firms can open liaison offices in India to carry on the practice in non-litigious matters. The Bombay High Court answered the question negatively and held that the Reserve Bank has erred in allowing the same. Furthermore, the phrase "to practice the profession of law" used in Section 29 of the Act is wide enough to cover litigious as well as non-litigious practice. As a result, foreign lawyers/law firms were bound to follow the provisions of the Act.
The present appeal before the Supreme Court arose out of the two impugned judgments of the Madras High Court and Bombay High Court, respectively. The principal issue was whether foreign law firms/lawyers are permitted to practice in India. This landmark judgment has given a wider meaning to the phrase "practice of the profession" to include advisory services, legal opinions, etc. On the issue of whether practice by foreign lawyers/law firms is permissible without fulfilling the requirements of the Act and Bar Council of India Rules, the Apex Court held that the regulatory framework for the conduct of advocates applies to non-litigation practice. Furthermore, the prohibitions as applicable under the Act apply to foreign lawyers and law firms also.
Further on the issue of whether there is a bar on foreign Lawyers/law Firms visiting India on a "fly in and fly out" basis for giving legal advice regarding foreign law, it was held that a casual or temporary visit for giving advice will not be covered under "practice" and the same is within the permissible limit of operation. The question of whether a particular visit will be treated as 'casual' or 'regular' will be decided on a case-to-case basis.