14-year epic battle draws to a close as Bombay High court rules against liaison offices for foreign firms

Bar&Bench News Network

Dec 16, 2009

Fourteen years ago, Lawyers Collective filed a petition in the Bombay High Court against the opening of liaison offices by foreign law firms in India. Ashurst, Chadbourne & Parke and White & Case opened liaison offices in India after obtaining permission from the RBI under Section 29 of the FERA Act dealing with the establishment of a branch office or other place of business by foreign companies or persons.

The permission granted to these firms to open liaison offices was challenged by Lawyers Collective as being bad in law. Senior Advocate C.U. Singh, appearing for Lawyers Collective with Firdaus Moosa and Anand Grover, argued that the practice of law in India included the practice of non-litigious matters, and was governed by the Advocates Act. He submitted before the court that since the foreign firms were not enrolled as advocates under the Act, they could not be allowed to practice even in non-litigious matters, such as drafting documents, reviewing and providing comments on documents, conducting negotiations and advising clients on international standards and customary practice relating to the client's transaction, which were the functions being performed by the liaison offices.

White & Case, Chadbourne & Parke and Ashurst Morris Crisp, appearing through Senior Counsel Navroze Seervai, Advocate Shiraz Rustomji and Senior Counsels Iqbal Chagla and D.H. Khambata respectively, argued that the Advocates Act relates to persons entitled to practice in the Supreme Court and the High Court, and thus does not regulate the non-litigious practice of law. Senior Counsel Rajinder Singh, appearing for the Union of India, pointed out that persons who are permitted to act as petition writers in the criminal courts or persons nominated an amicus curie need not be on the roll of the Bar Council and argued that a person carrying on the profession of drafting and giving opinion is not required to be enrolled as advocate under the Advocates Act.

The High Court Bench, comprising Chief Justice Swatanter Kumar and Justice J.P. Devadhar, declined to interpret the Advocates Act in this narrow fashion, however. Rejecting the arguments of the respondents, the Bench held that the practice of the profession of law included litigious as well as non-litigious matters. The Court felt that it was necessary to include non-litigious matters under the purview of the Advocates Act and the Bar Council Rules, since unregulated practice of law would not be conducive to upholding the high standards of the profession.

This long-running case involved fifteen respondents, ten Senior Advocates and six law firms, amongst others. The Bar Council of India and the Bar Council of Maharashtra, represented by Nitin Jamdar and A.G. Damle respectively, supported Lawyers Collective's argument. Bombay Incorporated Law Society was represented by P.A. Jani, who was instructed by Vigil Juris. The Bar Association of India, which also supported Lawyers Collective's stand, was advised by Bhasin & Co., who briefed Senior Counsel S.U. Kamdar. Senior Counsel A.Y. Sakhare appeared for the RBI and was instructed by K. Asher & Co. Little & Co. (now FoxMandal Little) obtained the brief for White and Case, while Kanga & Co. were briefing counsel for Ashurst.

Despite the long wait, the matter may not have received final resolution yet. Speaking to Bar & Bench, Firdaus Moosa of Lawyers Collective said that although she was delighted with the Court's judgement, she was "fairly certain" that the matter will go on appeal. Watch this space for more updates on the issue.

The full text of the Bombay High Court Judgement may be obtained here.

 

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Comments(6)
  • 1. "Arent there many lawyers in Indian Law firms who havent enrolled and are practicing corporate law. I guess the hammer is out on their head too". HC, Bangalore
  • 2. "What will happen to Best friends? I dont think there is anything illegal about them?". Best Friends, Mumbai
  • 3. "Some of the media has over hyped this judgment. What the Court said is simple. One, Lawyers who are not enrolled as Advocates with the State Bar are not allowed to practice law in India. Second, the liaison office of these law firms, who were essentially carrying on legal functions are not permissible in India. Almost everywhere in the world, enrolling to the Bar is the first requirement. It is a separate issue whether foreign lawyers can enrol to the state bar. The decision on that has been pending before the Government. If you are foreign law firm and want to start a law firm in India with advocates who are registered at the Bar in India, i dont see anything wrong there. Thats what all the magic circle firms are doing. ". Saketh, Bangalore
  • 4. "Time has come when litigious as well as non-litigious matters have to be equally respected as the ambit of advocacy gradually expands.Contextually, the ruling of the Mumbai HC in behalf of the inclusion of the non-litigious matters both under the purview and provisions of the Advocates Act and the Bar Council Rules is a milestone. What is pertinent is that the Bench of the said Court has discounted the unregulated practice that is not conducive to uphold the standard of the profession. It is sure that the liaison offices of the foreign law firms required to obtain permission of the RBI under section 29 of the FERA Act shall receive some impetus by the judgement of this judicature.". Pradeepta Mishra, HC Of Orissa, Cuttack
  • 5. "The foreign firms must be permitted in india but only through indian council as 99%members who are registered in Indian Advocate Act 1961 .By this permission the indian lawyers will associate with foreigh firms and chances to outsources will initiate to foreigh countries from India .Also will generate the foreigh currency in India that is so required in India due to ressession and balance of payment by oil cossumption .If wealth can be drain from India by IPL. why not we have the litigations against IPL for entry of Foreigh players on so highly cost. ". D.K.DUBEY, KANPUR
  • 6. "Advocates Act 1960 makes it clear that the advocate is only class who can practise law in India in any form/structure/practise.Section 30 of the Act though not complimented by Honourable Supreme Court of India needs clear interpretation. It concerns the Constitution and Soveriegnty of the State. I sincerely feel that Bar Council of India has major role to play in considering its jurisdiction and area of operation under Advocates Act. Globalisation or GATT does not mean you have to ignore Advocates Act. I sincerely hope that LAWYERS COLLECTIVE take the issue to logical end. ". Rajiv Patil, Mumbai, India
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