SC refuses foreign law firms to set base in India

| | New Delhi

In a big victory for Indian bar associations, the Supreme Court on Tuesday not only refused to allow foreign law firms to set base in India but also restricted foreign lawyers to come into the country for either offering occasional legal advice or participating in international commercial arbitrations. The bar associations have been opposing the move to open up the legal sector to foreign players.

The SC decision has put an end to conflicting interpretations of differing opinions by various High Courts on the issue.

The Bench of Justices Adarsh K Goel and UU Lalit said, “Foreign law firms/companies or foreign lawyers cannot practice profession of law in India either in the litigation or in non-litigation side.” Non-litigation activities, the judges said, will include giving of opinion, drafting of instruments, participation in conferences involving legal discussion. Since there is no regulatory framework governing activity of foreign lawyers and law firms, this order came to be passed.

As regards giving advice, the bench granted concession allowing foreign lawyers to “fly in and fly out”, but not frequently, as that may amount to legal practice, which will attract prohibition. The Court left it to the Bar Council of India or Union Government to frame appropriate rules in this regard. In allowing this, the Bench followed past decisions given by Madras High Court and Bombay High Court.

As regards international commercial arbitration, foreign lawyers who come to India will be bound by the Code of Conduct applicable to Indian lawyers as laid down by the BCI or Central Government. There will be no absolute right of a foreign lawyer to conduct such arbitration. At the same time, nor will he be debarred from conducting arbitration proceedings.

The court also detailed the role of foreign LPO (legal process outsourcing) which operated call centres in the country for providing legal advice and help. They will be allowed provided “if the activities in pith and substance do not amount to practice of law”. This would be determined on a case to case basis, the Bench added.

The Bench heard over 30 law firms hailing from the United Kingdom, the USA, France and Australia before arriving at its conclusion.





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