A three-part series on Indian Bar Council’s Historic Announcement & What Followed Thereafter
In a path-breaking development in the legal sector, the Bar Council of India (BCI), on March 15, 2023, allowed foreign lawyers and law firms to practice foreign law in India on a reciprocity basis. The development was announced through Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 (BCI Rules), enabling international lawyers and arbitration practitioners to advise in India.
The objective, as stated in the rules, was to open up the law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in non-litigious matters and in international arbitration cases, which would go a long way in helping legal profession/domain grow in India to the benefit of lawyers in India.
With these Rules, the debate on whether the Indian legal sector would be opened up to foreign lawyers and law firms was put to rest. However, soon after the announcement, the domestic legal sector in India came up with mixed reactions. Most regarded it as a significant and positive step – hoping for opportunities for collaboration and tie-ups and making the domestic sector more competitive. Many others, however, pointed out that such a significant development should have sought the view of the fraternity before notification. There are fundamental issues that needed to be addressed before such an impactful decision was taken and many lawyers felt that the BCI has taken them by surprise.
Soon after the announcement, the Society of Indian Law Firms (SILF) decided to call for a meeting to discuss the new BCI Rules and their favourable or adverse impact the Indian legal profession, particularly Indian law firms.
In a three-part article series on the subject, Bithika Anand and Nipun K Bhatiaa will discuss how foreign law firms and lawyers are permitted to practise law in India (albeit in a restricted, regulated, and controlled manner), the representation filed by the Society of Indian Law Firms (SILF) and reactions from across the globe on this watershed moment for the Indian legal sector.
The Bar Council of India (BCI), on March 15, 2023, introduced the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022. The rules allow foreign lawyers and law firms to practice foreign law in India on a reciprocity basis. The BCI believes that this move will help the legal profession/domain grow in India and benefit lawyers in India as well. The BCI had stated in its statement of objects and reasons:
“Time has come to take a call on the issue. Bar Council of India is of the view that opening up of law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in non-litigious matters and in international arbitration cases would go a long way in helping legal profession/domain grow in India to the benefit of lawyers in India too.“
India is not expected to suffer any disadvantage if law practice is opened up to foreign lawyers in a restricted, well-controlled and regulated manner. The registration fee for a foreign lawyer is $25,000, and for a law firm, it is $50,000. However, they are not allowed to practice Indian law in any form or before any court of Law, Tribunal, Board or any other Authority legally entitled to record evidence on oath.
Purpose & Safeguards
The Bar Council of India’s decision to allow foreign lawyers and law firms to practice foreign law in India on a reciprocity basis aims to create opportunities for the growth and development of the legal profession in India. The Rules have been introduced in a restricted, well-controlled and regulated manner to ensure that India does not suffer any disadvantage from the move. The stringent registration process, which includes several documents and undertakings on oath, has been implemented to ensure that only eligible applicants are granted registration.
Registration of foreign lawyers
Foreign lawyers and law firms cannot practice law in India without registering with the BCI. However, a foreign lawyer or foreign law firm can practice law in India on a ‘fly in and fly out basis’, for the purpose of providing legal advice to a client in India on foreign law or international legal issues. In this case, the lawyer/firm cannot have an office in India, and their practice cannot exceed 60 days in any period of 12 months. To summarize, the restriction with respect to registration is not applicable to the practise of law by a foreign lawyer or foreign law firm if:
- such practice is undertaken on a ‘fly in and fly out’ basis for the purpose of giving legal advice
- such advice is rendered to the client in India regarding foreign law and diverse international legal issues
- the client has procured such expertise and advise of such a foreign lawyer or foreign law firm in a foreign country, and the foreign lawyer or foreign law firm does not maintain an office in India for the purpose of such practice; and
- such practice in India for one or more periods does not, in aggregate, exceed 60 days in any period of 12 months.
Moreover, it has been highlighted that the ‘right to practise law’ in the concerned ‘foreign country of the primary qualification’ is the primary qualification for practising law in India under the BCI Rules.
Documents required for registration
An application for registration of foreign lawyers/law firms must be accompanied by several documents, such as a certificate from the Government of India, a certificate from the Competent Authority of the concerned foreign country of primary qualification, a certificate of the competent authority of the concerned foreign country of primary qualification that no proceedings of professional or other misconduct are pending either before it or before any other authority competent to entertain and decide such proceedings, and other relevant documents about the matter.
Undertakings required for registration
The applicant is required to provide a declaration on affidavit that they have not been convicted of any offense and have not suffered any adverse order in any disciplinary matter. They must also provide an undertaking on oath that they will not practice Indian law in any form or before any court of Law, Tribunal, Board or any other Authority legally entitled to record evidence on oath. Moreover, they are required to declare on oath that they fully understand and appreciate the fact that, on registration, they shall not be entitled to and shall not claim any interest on the guarantee amount deposited by them with the Bar Council of India.
From Confusion to Clarity, and vice-versa!
Soon after the announcement, many lawyers pointed that the Rules seem to be unclear and ambiguous on several grounds. Several Indian lawyers were of the view that there was no involvement or participation from the stakeholders and the Rules seemed like a midnight declaration – automatically applicable without any dialogue. Ideally, even the Government often circulates draft Bills before they become statutes, calling for comments from the stakeholders. Many felt that the correct methodology should’ve been to circulate Draft Rules, giving a timeline for stakeholders to share their views; and then come out with the Rules. The Rules, as it seems, provide no clarity on scope of operation (Lack of clarity on what foreign lawyers and law firms can do or can’t do). One important aspect that emerges from the Rules is that a foreign lawyer/law firm can advise only on foreign law, except in the case of international arbitration matters. The objects and reasons of the Rules says that the Rules are to enable foreign lawyers to practice foreign law in India, notably:
“Taking an all-inclusive view, the Bar Council of India resolves to implement these Rules enabling the foreign lawyers and Foreign Law Firms to practice foreign law and diverse international law and international arbitration matters in India on the principle of reciprocity.”
However, even the reciprocity principle raises several questions – Is it country-wise? What does it mean in terms of global law firms that have offices across the world? The confusion surrounding the scope of work that foreign lawyers can do prompted the BCI to issue a clarificatory Press Release.
Press Release by the BCI
The Bar Council of India (BCI) issued a Press Release on March 19, 2023, to address the misgivings surrounding the published gazette notification regarding the entry of foreign lawyers and law firms in India. The Press Release stated that foreign lawyers can advise clients only on foreign and international laws. They can’t appear in any court, tribunal, board, or regulatory authority that can take evidence on oath. Further, foreign lawyers will be allowed to practice only in non-litigation areas and their entry into India will be on a reciprocal basis.
The Press Release, it seemed, echoed the message of welcoming foreign lawyers to India, but with a limited scope, no courts, and a bit of subtle advice to ‘Drive in Your Lane’! The following points give a quick Summary of what’s allowed and what’s not allowed, as per the Rules and the clarification issued by the BCI.
What is allowed?
- Advising clients on international law
- Only to clients with an address/principal office in another country.
- Appearing for their clients in international commercial arbitration.
- Practicing transactional/corporate work on a reciprocal basis.
- Setting up offices in India on a reciprocal basis.
What is not allowed?
- Advising clients on Indian law or any other domestic law.
- Appearing in courts, tribunals, or statutory authority in India.
- Practicing litigation work.
- Any other work that requires enrolment with the BCI.
- Any other work that requires enrolment with a state bar council.
The case for Liberalization
Liberalization has proven to be a powerful catalyst in creating dynamic and efficient markets across different sectors. The previous liberalization efforts in India have played a significant role in boosting economic growth and generating employment. Thus, if and when India’s legal market undergoes liberalization, it could have a similar effect by opening up Indian law firms to sophisticated technologies, expertise, and global best practices that could enable them to deliver superior legal services. However, it is also important to note that a majority of law firms and lawyers in India, especially those in rural and interior parts of the country, may not be fully aligned with foreign law firms and may continue to operate in a more traditional and conservative manner. Therefore, any liberalization of the legal sector must be implemented in a way that safeguards the interests of all stakeholders and promotes a fair and competitive market for legal services.
Allowing foreign firms to practice in India is like taking a leap of faith. Perhaps, this could inject new blood into the legal system, and bring in new ideas, new practices, and new opportunities. But when you open the doors to global competition, you also need to create a level playing field in the homeland. Indian law firms and lawyers are less than none in the world in terms of their knowledge and acumen. But do they have the same opportunities, rights, and access to resources and markets as their foreign counterparts? Isn’t it worthwhile to consider removing barriers or restrictions on the web presence and active business development to ensure fair competition between Indian and foreign lawyers?
In the next article in this three-part series, we will discuss how the announcement of Rules was followed by the Society of Indian Law Firms (SILF) holding a meeting to discuss the Rules and resolving to make a representation to the Bar Council of India (BCI) highlighting its concerns with the opening up of the Indian legal market, notably the issues regarding the timing of this step and how it will be implemented.