The Confusing Press Release on Foreign Law Firms

The eligibility of foreign lawyers to set up an office in India has had a chequered history. In Bar Council of India v. A.K. Balaji (2018) 5 SCC 379, the Supreme Court held that foreign law firms or foreign lawyers could not practice the profession of law either on the litigation or the non-litigation side, unless they complied with the provisions of the Advocates Act, 1961 or the Bar Council of India rules.

In a nutshell, it became impossible for any foreign law firm to carry out any legal work in India or even have a liaison office. However, there was no bar to a foreign lawyer for conducting international commercial arbitration in India. It was also held that the visit of any foreign lawyer on fly in and fly out basis may amount to practice of law if it is on regular basis. At the same time, liberty was granted to the Union of India and BCI to make rules in this regard. Thus, the earlier relaxation granted by the Madras High Court to foreign lawyers from visiting India for a temporary period on a fly in and fly out basis was restricted by the Supreme Court.

On March 10, 2023, the Bar Council of India notified the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 permitting foreign lawyers to set up their office in India. This was followed by a press release dated March 19, 2023, issued by the BCI stating that foreign law firms will be allowed to set up office in India only to advise their foreign clients about foreign laws. The contents of the press release, meant to clarify the rules, have made them ineffective.

The Society of Indian Law Firms, in their representation to BCI dated March 30, 2023, has highlighted the inherent contradictions and infirmities of BCI rules. This representation contends that the latest BCI rules violate the Advocates Act, 1961 and the law laid down by the Supreme Court in A.K. Balaji.

Apart from the inherent problems with the rules, the press release dated March 19, 2023, has unfortunately created more confusion. The rules, as published in the gazette, allowed entry of foreign firms subject to several conditions. However, none of the conditions state that the foreign law firms can advise only their foreign clients and only on foreign laws and international laws. This condition, now been put forth through the press release, does not have any legal sanctity and is contrary to the rules framed by BCI. It is difficult to understand why any foreign law firm would set up their office in India to advise their foreign clients on foreign laws. Why would a UK firm set up an office in Mumbai or Delhi to advise its UK clients on UK laws? It is necessary that this press release is withdrawn.

The instant rules by the BCI should have been circulated in draft form before being notified. Further, it is necessary that BCI issues unambiguous rules so that foreign law firms are clear of what they can or cannot do. While it is clear that a foreign law firm cannot set up an office in India and advice Indian clients on Indian law, there should be no bar on a foreign law firm having an office to advise Indian clients on foreign law or their foreign clients on Indian laws. The boundary of what cannot be done should be clearly demarcated.

Arvind P Datar is a Senior Advocate and Rahul Unnikrishnan is an Advocate at the Madras High Court.