Foreign Law Firms Cannot Practice Full-Time In India: Apex Court

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The Supreme Court on Tuesday, 13 March, ruled that foreign law firms cannot practice in India, but allowed international lawyers to “fly in and fly out” to provide legal advice to their clients in the country on matters pertaining to foreign laws.

The ruling in effect maintains the current position of foreign law firms operating in India, and upholds the 2012 judgment of the Madras High Court. The apex court held that

• Foreign lawyers or law firms are not permitted to set up offices in India.
• Foreign lawyers are permitted to arbitrate in India only if the rules of the relevant arbitration institutions allow such practice by international lawyers.
• Foreign lawyers may fly in and out to advise on international law aspects in cases where they are involved, but they cannot practice full-time.

The Madras High Court had ruled in 2012 that while foreign lawyers and law firms are not permitted to practice law or set up shop in India, there is no bar on such persons from visiting India for a temporary period on a fly in and fly out basis, for giving legal advice to their clients regarding foreign law or on diverse international legal issues.

The high court had also ruled that for the purposes of arbitration, foreign lawyers cannot be prevented from coming to India and conducting arbitration proceedings in respect to disputes arising out of a contract relating to international commercial arbitration.

While the apex court on Tuesday agreed with the high court, it also added that the Bar Council of India has the powers to frame rules and regulate the conduct of foreign lawyers in this regard.

The Advocates Act allows only a person who is a citizen of India and has a degree in law from a ‘recognised university’ within the territory of India to practice law in the country.

The Advocates Act regulates not only the practice of litigation in courts but also overall legal practice, be it documentation, advisory or any commercial transaction work.

The government has been exploring whether foreign law firms should be allowed to practice in India, the Chennai High Court judgment said. But so far no clarity has emerged from the government on their stance on the matter.

(This piece was originally published on BloombergQuint and has been republished with permission.)