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ANALYSIS OF BCI’S DECISION ON PERMITTING FOREIGN LAW FIRMS IN INDIA

INTRODUCTION

Whenever and wherever a new clause was instituted, the thought we came across is whether it will be a boon or bane.  In this blog, we will analyze the BCI notification on permitting lawyers and law firms in foreign to practice in India based on reciprocity. The Bar Council of India (hereinafter referred to as BCI) is a judicial body instituted under Section 4[1] of the Advocates Act of 1961 in India, to regulate legal education and legal practice. BCI has apprised the rules for the registration and regulation of foreign lawyers and law firms in 2022.[2] Further, it quoted the new coming as ‘becoming a global village’[3]. This move was rationalized by the BCI as it resolve the concerns of the cross-border investment and it raises the flow of FDI in India. In the judgment of AK Balaji vs Bar Council of India[4], the Supreme Court held that foreign lawyers or foreign law firms could only advise clients temporarily which was specifically stated as fly-in and fly-out basis and not in another way.[5] But the Supreme Court desired to frame rules so that it could allow foreign lawyers or law firms to do their practice in a constricted manner and advised that these rules could not be against the welfare and safeguard of advocates in India.[6]

THE RULES                     

The BCI has issued a notification in the official gazette regarding the permission grants to foreign lawyers or law firms to do their non-litigious work in India. Chapter 4-rules of the BCI notification – Rule 8 lays down the nature and restricted scope of the foreign lawyers and foreign firms to do their non-litigious work in India.[7] Foreign lawyers or law firms could only proffer consultative work regarding foreign and international statutes for their foreign customers and only can function in non-litigation works. The rules are framed on the basis of the principle of reciprocity (i.e.… if the ‘X’ country allows Indian lawyers to practice in their own country then India will also allow the X country’s lawyers to practice in India) in a controlled, monitored, distinct or précised manner. Foreign lawyers or law firms were pre-conditioned to practice advocacy in their own country before they get registered to practice in India. Foreign lawyers and firms should register themselves with BCI and the registration would be renewed for every 5 years. They were restricted to make their appearance before any bench, tribunals, or any authority which was established under any of the statutes, or any forum which was legally authorized to administer affirmation as evidence or consisting of any frills of the law of courts. Foreign lawyers or foreign law firms are constricted to do their work in three scopes such as international commercial arbitration, diverse international laws, and foreign laws. They are not allowed to practice Indian law.[8]

 Prior to the recent notification of BCI’s rules regarding foreign lawyers or law firms, they were only permitted to fly in and fly out basis, which means they could only visit on temporary work which should not exceed 60 days in a year.[9] The Supreme Court suggested that if needed, BCI can approach the Law ministry or Union government to frame rules regarding permitting lawyers and law firms in foreign for consultative work purposes in India.[10]

UNVEILING THE OPPORTUNITY OR CHALLENGE?

BCI rationalized its move by stating that this move could direct the issues of the flow of cross-border investment and it might make India as a center for international commercial arbitration. These regulations will apply to foreign lawyers and foreign law firms in a distinct or précised manner, and controlled manner.[11] It paves the legal clarity for law firms and lawyers. It gives access to a plethora of opportunities for Indian law students to get enhanced by exposure to work in the global context. Our Indians can also join legal firms internationally. By permitting them to practice in India it increases the competition among the law firms & lawyers and thereby provides the improvement in legal services. It could be subversive for mid-sized firms and law firms to attain efficiency in AI tools and technology-related aspects too. It would also enhance the firms to deal with trans-national mergers and acquisitions. India could become an arbitration destination to resolve disputes internationally as it will allow the growth of our Indian economy. This may attract foreign investment into the country. The BCI has informed that this move will not adversely impact the Indian advocates instead it will benefit them in the long run[12]

On the flip side, it poses a few challenges for our country. It is perceived that there might be a chance for suppression of opportunities for local work. Permitting the foreign law firms and foreign lawyers it dilutes the control of BCI over the legal practice. Foreign countries may have adequate resources and expertise in technology which may create uneven competition among the law firms. Their own practices may not align with the practice in India. The adoption of AI tools by foreign countries forces India to compete with them and it might leave no choice for India but to adopt and deploy adequate technology to get align with foreign practices.  The practice in India is also alien to them. The low hourly rates, and delay in payment may drag the fence between them. The culture cross may take time to build its structures.

CONCLUSION

BCI has advised the Indian advocates to welcome these rules as they were beneficial to both the advocates and also for the country. If BCI received a receipt of the complaint, it will be a reason to believe in misconduct to the law practice in India and also that the foreign national practitioners violated the rules. Then thereon they will be referred to the disciplinary authority and in some cases, they might get suspended.[13] These rules pose both opportunities and challenges to the legal practice in India. Foreign law firms are only allowed to do non-litigious work such as transactional work or corporate work. This move from BCI that permits foreign lawyers or law firms will pave the way to the ambitious goals of India. It will support in the long run in a more discernible and valuable way in the international context. It is advised for the advocates to get aligned with these rules.

Author(s) Name: Jagatha Sivani (Andhra University)

Reference(s):

[1] The Advocates Act 1961, s 4

[2] ‘Permission for foreign legal firms to practice’ (Department of Legal Affairs, 03 April 2023) <https://legalaffairs.gov.in/sites/default/files/AU4896.pdf> accessed 23 June 2023

[3] Rukmini Rao, ‘Foreign law Firms In India: Hurdles Await’ (Fortune India, 06 April 2023) <https://www.fortuneindia.com/long-reads/foreign-law-firms-in-india-hurdles-await/112172> accessed 23 June 2023.

[4] AK Balaji v Bar Council of India (2018) AIR SC 1382

[5] Ishitha Roy, ‘How Foreign Lawyers Will Be Able To Work In India’ (India Times, 29 March 2023) <https://www.indiatimes.com/explainers/news/explained-how-foreign-lawyers-will-be-able-to-work-in-india-596323.html >accessed 23 June 2023

[6] Ridhi, ‘BCI Clarifies On Entry of Foreign Law Firms and Lawyers In India’ (SCC Online, 20 March 2023) <https://www.scconline.com/blog/post/2023/03/20/bci-clarifies-on-entry-of-foreign-law-firms-and-lawyers-in-india-legal-research-legal-news-updates/ >accessed 23 June 2023.

[7] Bar Council of India Rules for Registration and Regulation of Foreign Law firms and Lawyers in India 2022, ch 4 r 8

[8] ‘Permission for foreign legal firms to practice’ (Department of Legal Affairs, 03 April 2023) <https://legalaffairs.gov.in/sites/default/files/AU4896.pdf > accessed 23 June 2023

[9] Bhadra Sinha, ‘Bar Council finally allows entry of foreign lawyers and firms in India, but these conditions apply’ (The Print, 15 March 2023) <https://theprint.in/india/bci-finally-allows-entry-of-foreign-lawyers-and-firms-in-india-buIndiase-conditions-apply/1445354/> accessed 23 June 2023

[10] Apurva Vishwanath, ‘Bar Council Of India permits Foreign lawyers and law firms to practice in India’ (The Indian Express,16 March 2023) <https://indianexpress.com/article/india/bar-council-india-permits-foreign-lawyers-law-firms-practice-in-india-8498685/> accessed 23 June 2023

[11] Permission for foreign legal firms to practice’ (Department of Legal Affairs, 03 April 2023) <https://legalaffairs.gov.in/sites/default/files/AU4896.pdf> accessed 23 June 2023

[12] Bhadra Sinha, ‘Bar Council of India finally allows entry of foreign law firms and lawyers, but these conditions will apply’ (The Print, 15th March, 2023) <https://theprint.in/india/bci-finally-allows-entry-of-foreign-lawyers-and-firms-in-india-but-these-conditions-apply/1445354/> accessed 14 July 2023

[13] Rules for Registration and Regulation of foreign Law firms and lawyers In India 2022