(As published in Bloomberg Law, ABA/BNA Lawyers’ Manual on Professional Conduct.)

The Supreme Court of India has ruled that foreign lawyers and law firms cannot practice law in India, although they can make  ‘‘casual visits’’ on a ‘‘fly in and fly out’’ basis to give legal advice on matters involving foreign and international law.

This is a setback to foreign law firms looking to establish offices in India, although it maintains the status quo since a 2012 ruling by a state high court which had similarly limited foreign lawyers’ and law firms’ presence and role in India.

In 2012, the Madras High Court had said foreign lawyers and firms could ‘‘fly in and fly out’’ of India to advise clients in matters of international law, but could not practice litigation or non-litigation law without first enrolling with the Bar Council of India and meeting the provisions of the Advocates Act.

In 2009 the Bombay High Court ruled that foreign law firms could establish offices in India only after getting enrolled as advocates under the Advocates Act of India of 1961.

Both rulings had been challenged in the top court, and a ‘‘division’’ bench comprising justices Adarsh Kumar Goel and U.U. Lalit on Mar. 13 pronounced judgment upholding the substantive parts of both state high courts’ decisions.

Upholding the view of both courts that foreign law firms and lawyers could not practice law, whether on the litigation or non-litigation side, in India, the court said, ‘‘We hold that the expression ‘fly in and fly out’ will only cover a casual visit not amounting to ‘practice.’

’’Any dispute over whether a foreign lawyer was going beyond this limit could be determined by the Bar Council of India, the court said. The Bar Council is a statutory body that prescribes professional ethics and standards, as well as conducts the examinations which an advocate must pass to be eligible to practice law in India.

The Bar Council or Indian government ‘‘will be at liberty to make appropriate Rules in this regard including extending Code of Ethics being applicable even to such cases,’’ the court added.

Liberalization Ahead? The court ‘‘has rightly and very prudently left policy making to BCI and the Government,’’ Jyoti Sagar, founding partner of J. Sagar Associates, told Bloomberg Law in an email Mar. 15.

In a similar vein, the court clarified that foreign lawyers could conduct international commercial arbitration in India, and modified provisions of the Advocates Act of 1961 that debarred this.

‘‘If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act,’’ the court ruled, adding that they would be governed by the ‘‘code of conduct applicable to the legal profession in India’’ and that the Bar Council or the government could frame specific rules in this
regard.

Similarly, it said business process outsourcing (BPO) that provide word processing, secretarial, transcription and/or proof-reading services did not come within the purview of the Advocates Act or the Bar Council of India
Rules. Accordingly these can carry on operating as they do.

Although the decision of the Supreme Court of India is final and cannot be challenged, this is not the end of the road for India’s plans to liberalize its legal services sector, which the government has tacitly supported.

‘‘That is now a political consideration,’’ Ravi Singhania, founding partner at Singhania & Partners, told Bloomberg Law. Explaining how India has gradually allowed in more and more foreign institutional and direct investment, he said rules could be loosed little by little to allow a larger role for foreign lawyers and law firms.

‘‘I believe that the way forward would be to have stakeholder consensus on the place of the Indian profession under the global sun and the blue print to get there,’’ Sagar added.

The case is Bar Council of India v. Balaji, Civ. App.

Nos. 7875-7879 of 2015, Sup. Ct. India 3/13/18.
BY MADHUR SINGH

To contact the reporter on this story: Madhur Singh in Chandigarh, India, at correspondents@bna.com
To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bloomberglaw.com