PROGRESSION TOWARDS INCLUSIVITY INTO INDIA’S LEGAL SYSTEM

 

The Bar Council of India, a statutory body governing law practice in the country, vide notification dated 10.03.2023 published the Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022. This notification received mixed responses from stakeholders of the legal profession. Some viewed it as the first step towards inclusion and diversification of practice in the legal profession and in the best interests of clients to seek the most optimum advice from experts in their field. On the other hand, many law firms and lawyers view this as a probable loss to their business and unnecessary competition between the Indian and foreign law practitioners.

According to the Bar Council of India, these rules would help to address the concerns expressed about flow of Foreign Direct Investment in the country and making India a hub of International Commercial Arbitration. The Council aim to encourage foreign countries to explore the potential and prospects of operating the law practice in India to foreign lawyers in the field of practice of foreign law and diverse international legal issues in non-litigious matters on the principle of reciprocity.

GLIMPSES OF INTERNATIONAL PERSPECTIVE OF INTER-STATE PRACTICE OF LAW

In the case of Appell v. Reiner, 204 A 2d 146 [1964], the Supreme Court of New Jersey dealt with a case of New York lawyer, who was not admitted to the New Jersey Bar, was anyhow providing legal services to New Jersey citizens in a matter involving the extension of credit and the compromise of claims held by New York and New Jersey creditors. The Chancery Division held that the New York lawyer could not advice in respect of New Jersey creditors. The Supreme Court of New Jersey held that:

“there are unusual situations in which a strict adherence to such a thesis is not in the public interest. In this connection recognition must be given to the numerous multi-State transactions arising in modern times. This is particularly true of our State, situated as it is in the midst of the financial and manufacturing centre of the nation. An inflexible observance of the generally controlling doctrine may well occasion a result detrimental to the public interest, and it follows that there may be instances justifying such exceptional treatment warranting the ignoring of State lines.”

The Apex Court held that the counsel of New York to furnish services in New Jersey was not illegal and contrary to public policy.

The Supreme Court of California in the case of Birbrower, Montalbano, Condon & Frank v. Superior Court, [1998] WL 1346 [Cal 1-5-1998], held that representing a party in an arbitration without its seat in California was “engaging in the practise of law” in that State. It followed that a New York lawyer, who was not a member of the Californian Bar, was not qualified to represent his client in a Californian arbitration; and was thus unable to recover his fee when he sued for it. Providentially, the Court stated that this common regime of restricting inter-state legal practice would not apply in the case of international arbitration. In England there is not, and never has been, any danger of a similar situation arising due to Section 3 of the English Arbitration Act, 1996 [Independence of parties to choose the seat/bench of the Arbitration]. The Supreme Court of California rhetorically mentioned that “a party to an arbitration may, in theory, be represented by his plumber, his dentist, or anyone else of his choosing although the choice usually falls on a lawyer or specialist claims consultant in the relevant industry".

CONCEPT OF FLY IN AND OUT OF INDIA

The concept of “fly in and fly out basis” in respect of foreigner practitioners providing legal advice to a client on foreign law or international legal issues in India, without setting up their office or court practice in India has emerged through various judicial interpretations.

In the case of Vodafone International Holdings B.V. v. Union of India [2012] 6 SCC 613 before the Supreme Court of India, the counsel appearing for the foreign law firms took a definite stand that the clients whom they represent do not have offices in India, they do not advise their foreign clients on matters concerning Indian law, but they fly in and fly out of India, only to advise and hand-hold their clients on foreign laws. Thereby, the Apex Court observed that every strategic foreign direct investment coming to India, as an investment destination should be seen in a holistic manner. The Supreme Court elucidated that the question involved in the said case was of considerable public importance, especially on foreign direct investment, which is indispensable for a growing economy like India. Emphasis was applied upon not losing site of the fact that in the overall economic growth of the country, international commercial arbitration would play a vital part. Therefore, the Court held that rendering advice to a client would also be encompassed in the term "practice".

In the light of the scheme of the Advocates Act, the Madras High Court in the case of A.K. Balaji v. Union of India [2012] SCC OnLine Mad 723, accentuated that if a lawyer from a foreign law firm visits India to advise his client on matters relating to the law which is applicable to their country, for which purpose he flies in and flies out of India, there could not be a bar for such services rendered by such foreign law firm/ foreign lawyer. The Court shed light on the necessity to seek legal advice on the manner in which the foreign law would be applied to the said transaction, for which purpose if a lawyer from a foreign law firm is permitted to fly into India and fly out advising their client on the foreign Law, it cannot be stated to be prohibited. However, the Court clarified that such foreign law firm shall not be entitled to do any form of practice of Indian law either directly or indirectly.

GIST OF RULES FOR REGISTRATION AND REGULATION OF FOREIGN LAWYERS AND FOREIGN LAW FIRMS IN INDIA, 2022

According to Section 2 [iii] of the Rules, definition of a Foreign Lawyer other than being a person, shall also curtail a law firm, limited liability partnership, company or a corporation, who/which is entitled to practice law in a foreign country. A foreign country and a constituent State, requires to be recognized by the Government of India. Foreign countries must have a federal structure of governance. A constituent State must have its own justice-delivery system and a separate class of persons entitled to practice law under the purview of Section 2 [iv] of the Rules.

·      REGISTRATION & SUSPENSION PROCESS

The Bar Council of India is endowed with the responsibility of registering a foreign lawyer or foreign law firm without which the above-mentioned shall not be entitled to practice law in India. This prohibition shall not apply to foreign lawyer or foreign law firm practicing on a “fly in and fly out basis” for the purpose of giving legal advice to the client in India regarding foreign law and on diverse international legal issues. Provided that client should have procured the legal advice from the foreign lawyer and foreign firm in a foreign country which does not maintain an office if India. Additionally, the practice in India for one or more periods shall not exceed 60 days in any period of 12 months. 

Registration shall only be valid for 5 years only and the foreign lawyer and law firm would be required to renew the registration within 6 months before the date on which such validity expires. The Bar Council of India may refuse/limit the number of registrations of foreign lawyers and foreign law firms in order to maintain a balance or to ensure complete reciprocity or to protect the interest of Indian law firms and Indian lawyers.

The Bar Council of India is endowed with the responsibility of cancelling/renewing registrations, reprimanding, suspending, imposing penalties and costs on foreign lawyers or foreign law firms after giving them a chance of being heard, either on a complaint alleging that a lawyer or a firm has gained registration through misrepresentation or fraud

·      NON-LITIGIOUS LAW PRACTICE BY FOREIGN LAWYERS

According to the Rules, a registered foreign lawyer shall be entitled to practice law in India in non-litigious matters only. The Statement of Objects and Reasons of the Advocates Act, 1961 declares the creation of a common roll of advocates and granting advocates the right to practice in any part of the country and in any court as one of its main objectives.

Section 29 of the Advocates Act, makes it illegitimate for any person aside from an "advocate" to engage in the "practice of the profession of law." According to the legislation, an advocate is someone who is a member of the State Bar Council or the Bar Council of India. Enrolment requires that an advocate meets specific conditions, such as Indian citizenship and educational credentials, such as having completed legal studies at an Indian college. While this rule does not ban the engagement of a foreign lawyer/firm, its apparent repercussions have consistently been the topic of public controversy and subsequent court examination.

In the case of Lawyers Collective v. Bar Council of India and Others, [1995] 1 SCC 732, the Apex Court reasoned that the statement of object and reasons of the Advocates Act elucidates that the right to practice in any part of the country is symptomatic of the right to engage in non-litigious practice, whereas the right to practice in any court, is symptomatic of litigious practice. From this inference it can be understood that non-litigious forms of practice mean any practice of law without appearing before a court.

Foreign lawyers or foreign law firms shall not be permitted to appear before any courts, tribunals or other statutory or regulatory authorities. They shall be allowed to practice transactional work/corporate work such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts and other related matters on a reciprocal basis. They shall not be involved or permitted to do any work pertaining to conveyancing of property, title investigation or other similar works.

CONCLUSION

In the advancing time, legal profession is evolving constantly. Globalization has made it necessary to engage in cross-border transactions with varying business objectives. Conducting multinational business operations involves discussing legal matters that span multiple jurisdictions, which necessitates the use of legal service providers from different parts of the world. Bare perusal of the objects and reasons of the notification of the impugned Rules promised that the legal fraternity in India is not likely to suffer any disadvantage in case law practice in India is opened up to foreign lawyers in a restricted and well-controlled and regulated manner on the principle of reciprocity. It would be a matter of time in which it can be assessed whether the progression towards inclusivity turns out to success in diversification or deprival of opportunities in domestic legal practice.