LEGISLATIVE UPDATES -
BAR COUNCIL OF INDIA ALLOWS ENTRY OF FOREIGN LAW FIRMS / LAWYERS IN INDIA.
Currently, India is regarded as one of the fastest-developing nations, with an anticipated economic growth rate of 6.7%. Since gaining independence in 1947, India has progressed in all sectors, such as IT, medicine, and business. In 1991, the Indian Government allowed Liberalization, Privatization, and Globalization (LPG), which paved the way for several multinational companies (MNCs) to establish their manufacturing units or offices in India.
Concurrently, the Indian legal system has also developed significantly, as evidenced by recent examples like virtual court proceedings or live streaming of court sessions during the COVID-19 pandemic. One of the critical legal questions arising from globalization pertains to whether foreign law firms/lawyers should be permitted to practice and establish offices in India. There have been many debates and petitions filed over the years, with notable cases including AK Balaji vs. Union of India [AIR 2012 Mad 124] and Lawyers Collective vs. Bar Council of India [2009 SCC OnLine Bom 2028], which were brought before the Madras and Bombay High Courts, respectively.
However, in 2018, the Supreme Court of India delivered a landmark judgment in the case of the Bar Council of India vs. AK Balaji [2018 5 SCC 379], granting the Union Government and Bar Council of India the freedom to frame rules and regulations on this matter. On 13th March 2023, the Bar Council of India took a reformative step by allowing foreign law firms/lawyers to practice and set up offices in India, albeit in a limited scope. However, many Bar Associations and lawyers are opposed to this decision and intend to challenge it due to their vested interests in the entrenched status quo.
The Bar Council of India, in its efforts to protect and safeguard the interest and welfare of lawyers in the country, has defined the scope of practice of foreign law firms/lawyers in the following manner-
● Foreign law firms/lawyers shall practice in the non-litigation area only.
●Foreign law firms/lawyers can appear for clients in International Commercial Arbitration.
● Foreign law firms/lawyers shall not appear before any court, tribunal, board, statutory or regulatory authority, or any forum legally entitled to take evidence on oath or having trappings of a court.
● Foreign law firms/lawyers can render advisory work to their foreign clients concerning foreign law.
● The entry of foreign law firms/lawyers would be based on the principle of reciprocity i.e., lawyers of only those countries would be permitted, which allow Indian lawyers to practice.
● To ensure compliance with the Bar Council of India's rules, foreign law firms/lawyers are prohibited from allowing non-lawyers, BPOs, or any other entities to practice law in any capacity in India, as it would amount to unauthorized practice of law, as held by the Supreme Court in the case of Bar Council of India vs. AK Balaji (supra).
The decision to allow foreign law firms/lawyers to practice in India will provide mutual benefits and contribute to the growth of the legal profession in India. Indian lawyers and law firms will have the opportunity to meet international standards and gain proficiency, which will improve their competitiveness in the global market. Additionally, this decision will help promote India as an international arbitration hub. Indian lawyers will benefit from employment and retainer opportunities and increased remuneration and exposure to the global legal market, as foreign firms can hire them.