New Delhi: The case challenging the entry of foreign law firms into the country is a step closer to resolution with the Mumbai High Court poised to begin hearing final arguments on it over the next two days.
The petition was filed in 1995 by Lawyers Collective, a legal services provider that works in areas of public interest, challenging the practice of three foreign firms, United States’ White and Case Llp. and Chadbourne and Parker Llp. and UK’s Ashurst Morris Crisp Llp. in India after the Reserve Bank of India (RBI) granted them licences to open up liason offices in the country.
The petition alleged that the three law firms had opened up “full-fledged defacto branch offices” in India as opposed to liason offices. It further said this was in violation of a 1994 resolution by the Bar Council of India, or BCI, that categorically prohibited foriegn firms from practising in India.
The petition also sought clarity on whether the expression “to practice the profession of law” in Section 29 of the Advocates Act, 1961, would extend to both foreign and Indian legal practitioners. According to Lawyers Collective, the foreign firms were justifying their practice in India by interpreting the expression to mean acting and pleading in court and providing legal opinions on Indian laws and regulations and not international laws.
Srinivas Parthasarathy, a specialist in securities law and partner at Allen & Overy LLP, said that a decision by the court in favour of foreign firms would not “open up the gates” for foreign law firms to practice here. “ Amendment to legislations by the government and the law ministry and acceptance and support for foreign firms from the local bar are essential for this issue to be finally decided,” he added. Allen & Overy is a UK based law firm that recently signed a deal with Indian law firm Trilegal for client referral, joint marketing, consultation and training.
The case gained prominence after the union Ministry of Law and Justice, under international pressure, proposed liberalization of the legal services sector last year. On 17 September, the Union ministry of law and justice circulated a note to members of the Indian legal fraternity proposing liberalization in the legal services sector in the country. Mint reported on 25 September that the Union ministry of law and justice, while it was still in talks with the legal fraternity in india, had filed an affidavit before the court stating that practice of law in India amounts to practice of Indian laws and regulations alone.
The Society of Indian Law Firms, a representative body of law firms, sent its response to the Union ministry of law and justice on 15 November, saying the government’s proposal was premature. According to them it did not conform to the procedure, which includes reciprocity, laid down by the World Trade Organization’s (WTO) General Agreement on Trade in Services (GATS). Indian lawyers, they added, could meet the growing demand for legal services in India.
Three days later, the BCI, a regulatory body that prescribes standards in professional conduct for lawyers and legal educators, passed a resolution opposing the opening up of legal services. Immediately thereafter, the government put out a statement saying that a decision would be presaged on consultations with the BCI.
The BCI received unexpected support from lawyers of Indian origin who are based overseas. The British Indian lawyers Association, or BILA, was included as a party in this case after it filed an affidavit before the court in November.
It contended that the “assurances” given by foreign firms that they would only engage in corporate advisory work and not practice litigation are “worthless”, and empasised the need to open up the legal services market on a reciprocal basis so that Indian lawyers could practice overseas.
In response, the Law Society of England and Wales, a body that regulates the admission of solicitors and regulates their practice, filed an affidavit challenging BILA’s contentions. It stated that the UK “has made significant commitments for the entry of foreign lawyers” from member countries of the WTO.