Supreme Court: Foreign law firms not allowed to practice in India

Representation pic

The Supreme Court on Tuesday said that foreign law firms cannot set up offices in India but their lawyers could visit in 'fly in and fly out' mode to give legal advice on foreign laws to clients, which would be casual in nature. Holding that the "... foreign law firms/companies or foreign lawyers cannot practice profession of law in India, either in the litigation or in non-litigation side", a bench of Justice Adarsh Kumar Goel and Justice Uday Umesh Lalit said: "We hold that the expression "fly in and fly out" will only cover a casual visit not amounting to "practice".

The court said that foreign lawyers could, however, come to the country and participate in international commercial arbitration but they have no "absolute right" to do so. Pronouncing the judgment, Justice Goel said: "We hold that there is no absolute right of the foreign lawyer to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration."

The court said: "If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act." However, the court said, foreign lawyers would be "governed by the code of conduct applicable to the legal profession in India", even as it gave liberty to the Bar Council of India and the Centre to frame rules in this regard.

The top court modified the February 12, 2012, oder of the Madras High Court that dealt with Business Process Outsourcing companies. The High Court said that "BPO companies providing wide range of customised and integrated services and functions to its customers like word processing, secretarial support, transcription services, proof reading services, travel desk support services etc do not come within the purview of the Advocates Act, 1961, or the Bar Council of India Rules."

Modifying the High Court order, the top court said: "We hold that mere label of such services cannot be treated as conclusive. If in pith and substance the services amount to practice of law, the provisions of the Advocates Act will apply and foreign law firms or foreign lawyers will not be allowed to do so."

The court verdict came on pleas challenging the judgments pronounced by the Bombay and Madras High Courts. The Madras High court had said that foreign lawyers can fly in and fly out for tendering legal advice on foreign laws. The issue involved in this batch of matters is whether foreign law firms/lawyers are permitted to practice in India.

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