India: Can Foreign Lawyers & Law Firms Practice in India?

 

After about five years of allowing foreign lawyers and law firms to visit India on a temporary basis to provide legal advice to their clients, the Bar Council of India (BCI) laid down rules that permit them to opening offices in India.

In March 2018, a division bench of Justices U.U. Lalit and A.K. Goel ruled that foreign lawyers and law firms are not allowed to practice law in India, be it for the litigious or the non-litigious side. However, it deemed that there was no bar on foreign lawyers and law firms to visit India for a temporary period to provide legal advice to their clients.

Recently, however, BCI made a move that could very well change the entire legal sector of India. It allowed foreign lawyers and law firms that have registered under the rules to setup their offices and practice law in India.

BCI’s Latest Ruling

The rules laid down by the BCI state, ‘a foreign lawyer registered under rules shall be entitled to practice law in India in non-litigious matters only.’

As per the notification:

• Foreign lawyers or foreign law firms shall not be permitted to appear before any Courts, tribunals or other statutory or regulatory authorities.
• They shall be allowed to practice on transactional work/corporate work such as joint ventures, mergers and acquisitions, intellectual property manners, drafting of contracts, and other related matters on reciprocal basis.
• The reciprocity rule will not be applicable if the foreign lawyer or law firm works on a ‘fly in and fly out’ basis to advise their clients in India, provided that in such cases such lawyer or law firm does not maintain any office in India and such practice of giving advice does not exceed 60 days in any period of 12 months.

Note: The Supreme Court of India has interpreted the Advocates Act to allow the ‘fly in and fly out’ practice used by foreign lawyers. This basically means that foreign lawyers could be involved as legal representatives in International Commercial Arbitration for cases related to foreign law. In addition, it stated that these restrictions on foreign lawyers would also apply to Indian lawyers that work with foreign law firms. Furthermore, the rules also mentioned that the practice areas for foreign lawyers and legal firms shall be laid down by the BCI and if needed, BCI may reach out to the Government of India, Ministry of Law and Justice in this regard.

It must be noted that under the rules, BCI may refuse to register any foreign lawyer or law firm if ‘in the opinion of the Council, the number of foreign lawyers and foreign law firms of any particular foreign country registered in India is likely to become disproportionate to the number of Indian lawyers or Indian law firms registered or allowed to practice law in the corresponding foreign country.’

Why has this been allowed?

• The aim of allowing foreign lawyers and legal firms to practice in India aims to establish India as a hub for International Commercial Arbitration.
• The goal is to allow foreign lawyers, who were previously barred, to practice in India in non-litigious matters such as mergers and acquisitions, drafting of contracts, etc.

Permitted Practice Areas for Foreign Lawyers and Legal Firms

While allowing foreign lawyers and legal firms to practice in India, the BCI permitted them to practice in non-litigious matters. Such lawyers and entities have been allowed to advise clients in international law, international legal issues and arbitration matters. However, they are not permitted to appear before any Court, Tribunal or any Statutory or Regulatory authority.

Registration and Renewal of Foreign Lawyers and Legal Firms in India

Before practicing in India, foreign lawyers and legal firms must register with the Bar Council of India. All relevant rules and regulations are mentioned under Rule 2 of Chapter-I of the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers or Foreign Law Firms (herein referred to as ‘Rules’).

• If a foreign lawyer is practicing for the purpose of giving legal advice on a fly in and fly out basis, then registration under these rules is not required, provided further that in such cases the foreign lawyer or law firm does not maintain any office in India and such practice of giving advice does not exceed 60 days in any period within a year.

Registration Fee

An application for registration in ‘Form-A’ along with the prescribed registration fee, as per the below-mentioned structure, should be submitted to the BCI.

• USD 25,000 for registration of a foreign lawyer along with a one-time guarantee amount of USD 15,000
• USD 50,000 for registration of a foreign law firm along with a one-time guarantee amount of USD 40,000.

Validity and Registration Renewal

Registrations of foreign lawyers and law firms with the BCI have a validity period of 5 years, after which they must be renewed by applying to the Secretary Bar Council of India using ‘Form-B’ within six months before the expiry of such registrations.

The renewal form must be accompanied by relevant documents and a renewal fee of:

• USD 10,000 for foreign lawyers.
• USD 20,000 for foreign law firms.

Note: In the case where a foreign lawyer’s or law firm’s registration has expired and not been renewed or cancelled permanently, or has been voluntarily terminated, the security deposited by such a lawyer or law firm shall be returned without any interest.

Eligibility Criteria for Foreign Lawyers to Practice in India

Although permitted to practice in India, foreign lawyers must fulfill the eligibility criteria laid down by the Bar Council of India. To be eligible to practice law in India, foreign lawyers with a degree:

• Must be eligible to practice in their country.
• Must register with the Bar Council of India.
• Must not have any criminal charges or disciplinary action against them.

Note: In case an application is rejected, the Bar Council of India shall provide the applicant with a reasonable reason for rejecting the same. In addition, if the BCI doesn’t accept the application even after hearing out the applicant due to genuine reasons, they shall refund any fee submitted as part of registration fee, renewal fee or guarantee fee, after adjusting, if any, the amount recoverable by the BCI.

Conclusion

This move has received massive support from Indian lawyers and legal firms, as they believe this development in the legal structure will create opportunities for Indian laws to be exposed to the best legal practices around the globe and encourage healthy competition.

It is also believed that the rules will bring clarity to foreign lawyers and legal firms currently practicing in India in a very limited space. In addition, allowing foreign law firms to enter India would help India gain more visibility and value in a global context, especially when it comes to international trade and commerce.

Furthermore, a lot of Indian legal firms said that this could be a ‘game changer’ for mid-size firms and help Indian law firms achieve more efficiency in several aspects like talent management, technology and interlocutory applications.

 

For further information, please contact:

Promila Dhar, Partner

India Law Offices, New Delhi

e: p.dhar@indialawoffices.com

t: +  91 11 24622216

 

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