Foreign Law Firms’ Entry: Senior Advocate CU Singh Insists On Practice To Be Subject To India’s Regulatory Regime, Even As ASG Asks BCI To Frame Rules

Key Quotes

 CU Singh: “The BCI is not averse to practice of law in India by foreign lawyers and firms, but the same must be regulated and fall within the four corners of the Advocates’ Act. Even if such practice is on a temporary basis, it must be subject to our regulatory regime.”

 Dushyant Dave: “As Indian lawyers, we take part in international commercial arbitration matters in Singapore, London, Paris etc, without the need of procurement of any permission. If the BCI regulates foreign lawyers in this respect, it would also hurt the interests of Indian lawyers.”

Additional Solicitor General (ASG) Maninder Singh: “The rules are needed. We want foreign lawyers to come so as to not deny the Indian advocates of the same privilege in other countries. If the BCI does not frame the rules, the Central government would take it upon itself to stipulate the rules.”

As the hearing in the matter regarding the entry of foreign law firms in India commenced on Wednesday afternoon before the Supreme Court bench of Justice Justice Adarsh Kumar Goel and UU Lalit, senior counsel CU Singh elaborated the grounds for the appeal arising out of the Madras High Court judgment dated February 21, 2012, in AK Balaji v Bar Council of India (BCI).

The senior counsel preferred a challenge to the judgment of the high court in so far as it concludes:

 ... (ii) However, there is no bar either in the Advocates’ Act of 1961 or the BCI Rules for the foreign law firms or foreign lawyers to visit India for a temporary period on a fly in and fly out basis, for the purpose of giving legal advise to their clients in India regarding foreign law or their own system of law and on diverse international legal issues

(iii) Moreover, 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 BCI’s stand is that even rendering advice or opinion, pertaining to foreign law or otherwise, as well as arbitration fall within the ambit of the ‘practice of the profession of law’,” Singh submitted.

In support of the aforesaid, the senior counsel referred to the 2009 judgment of the Bombay High Court in Lawyers Collective v BCI, where the high court ruled:

[T]he RBI was not justified in granting permission to the foreign law firms to open liaison offices in India under Section 29 of the FERA Act of 1973. We further hold that the expressions 'to practise the profession of law' in Section 29 of the Advocates’ Act of 1961 is wide enough to cover the persons practising in litigious matters as well as persons practising in non-litigious matters and, therefore, to practise in non litigious matters in India, the respondents were bound to follow the provisions contained in the 1961 Act.

The senior counsel also drew the attention of the bench to Section 2(1)(a) of the Act of 1961, which defines an “advocate” as one whose name is entered in the state rolls maintained in accordance with the provisions of the Act. Thereafter, he relied on Section 6 of the Act mandating that it shall be the function of the state bar councils to prepare rolls and admit advocates on their rolls; Section 7 on the functions of the BCI; and Section 17 regarding the maintenance of the rolls by the state bar councils.

Referring to Section 24 of the Act of 1961 which lays down the qualifications for admission as an ‘advocate’ on the state rolls, Singh perused the proviso to clause (a) of sub-section (1) of the said Section 24: “Provided that subject to the other provisions contained in this Act, a national of any other country may be admitted as an advocate on a State roll, if citizens of India, duly qualified, are permitted to practise law in that other country”.

“The Madras High Court has not addressed the issue country-wise, as envisaged by the proviso, but granted blanket permission in respect of advisory services, arbitration, etc. The crux of the BCI’s arguments is to request the court to give effect to the said Proviso that stipulates the principle of reciprocity. The principle is further amplified in Section 47 of the Act of 1961,” Singh said.

Singh’s contention was that the Madras High Court, in permitting foreign lawyers to render advisory services on ‘fly-in and fly-out’ basis has deviated from Section 29 of the Act of 1961, which clearly provides that there shall be only one class of persons entitled to practice law in India, that is, the ‘advocates’ admitted on the state rolls.

He cited Section 33 of the Act allowing persons such as chartered accountants, income tax practitioners, etc, not enrolled as ‘advocates’, to practice, if an express provision to that effect is made in any existing law, an exception to Section 29.

Referring to Section 32 of the Act of 1961, which empowers any court or other authority to permit any person not enrolled as an ‘advocate’ to appear before it in any particular case, it was advanced, “In view of the contents of sections 29 and 32, there is no provision for even permission being granted otherwise than for the purpose of appearance”.

Finally, he relied on Rule 6 in Chapter III of Part VI of the BCI Rules of 1975, which prohibits an advocate from practicing in any court or authority if his name has been struck off from the rolls.

Singh also cited the American case of NY Lawyers Country Assn (Roel) [3 N.Y.2d 224], wherein even giving advice solely on Mexican Law to obtain divorce in Mexico by a Mexican in New York was deemed to be unauthorised practice of law. “Place of practice of the lawyer is of consequence, the recipient of the service may be anywhere,” he said.

Finally, Singh stated, “The BCI is not averse to practice of law in India by foreign lawyers and firms, but the same must be regulated and fall within the four corners of the Advocates’ Act. Even if such practice is on a temporary basis, it must be subject to our regulatory regime.”

Contradicting Singh’s arguments, senior counsel Dushyant Dave, appearing on behalf of the London Court of International Arbitration, said: “As Indian lawyers, we take part in international commercial arbitration matters in Singapore, London, Paris etc, without the need of procurement of any permission. If the BCI regulates foreign lawyers in this respect, it would also hurt the interests of Indian lawyers.”

Additional Solicitor General (ASG) Maninder Singh called upon the BCI to exercise its power under Section 49(1)(e) of the Act of 1961 and frame rules governing the practice of law in India by foreign lawyers and law firms, failing which the Central government would undertake to lay down the same under Section 49A of the Act. “The rules are needed. We want foreign lawyers to come so as to not deny the Indian advocates of the same privilege in other countries. If the BCI does not frame the rules, the Central government would take it upon itself to stipulate the rules,” the ASG submitted.

The ASG also submitted that Section 24(1)(a) of the Act of 1961, by providing that to practice as an ‘advocate’ in India, a person must be a citizen of India, does not restrict persons who are not citizens from practising.

Further, the ASG brought to the attention of the bench the fine line of distinction between the provisions of sections 29 and 33 of the Act of 1961, in so far as the former confers a positive right on ‘advocates’ to practice and the latter forbids any person not enrolled as an ‘advocate’ from practising.

The hearing shall continue at 3 pm on Monday.