The Bombay High Court has decided that the 1961 Advocates Act applies to all lawyers, irrespective of whether they appear in court or act in non-litigious matters. Download the judgment and share your learned views.
The judgment by Chief Justice Swatanter Kumar and Justice J P Devadhar stated that if the Advocates Act were restricted to persons practising the profession of law in litigious matters then an "advocate found guilty of misconduct in performing his duties while practising in non-litigious matters cannot be punished" under the Act.
"There is no reason to hold that in India the practise in non litigious matters is unregulated," they ruled.
The judgment also noted: "Since the [issue of foreign firms practising law in India] is pending before the Central Government for more than 15 years, we direct the Central Government to take appropriate decision in the matter as expeditiously as possible."
Until the Government would take such action, the 1961 Advocates Act would prevail, held Devadhar. Foreign firms and the respondent firms Ashurst, Chadbourne & Parke and White & Case would therefore be bound to follow the provisions of the Advocates Act.
In light of the above, the Court also ruled that the Reserve Bank of India (RBI) as co-respondent was "not justified in granting permission to the foreign law firms to open liaison offices in India".
Download the judgment here (please do not hotlink to the file as it will kill our server).
Read readers' immediate reactions to the breaking news here and join the discussion.
Comment below if you have views on the legal and practical implications of the judgment.
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The whole thing seems to have hinged on whether "practise of law" means only litigation or whether it also includes non-litigious work. And it took them 14 years to arrive at a decision on THIS? Our country is truly Incredible India :-)
The Act, and the court, simply cannot legitimately govern the practice of English, New York law or any other law for that matter. That is solely a matter for professional bodies in those jurisdictions to govern.
Clearly, the judgement is a 'stitch up'. There is nothing in the Advocates Act which prevents foreign lawyers or law firms from practicing their own law from Indian soil. Let's hope these firms have the courage to take the fight further!
1. Let's consider the RBI permission for a moment - RBI is not concerned with specific sectors, nor is it obliged to be. It's role in this context is to regulate inflow and outflow of foreign exchange into the country. Accordingly, it gavce consent to set up a liason office to a foreign entity that happened to be a law firm with various conditions restricting the right of such office to repatriate funds aborad, etc. As is usual, the consent was issued under the FEMA 1999 and came with a rider that it was not intended to be a consent under any other law in force. Obviously, the RBI washes its hands off sector-specific regulation. So if for instance, an aviation company or an oil company wanted to set up liason offices, such consent could indeed be granted without affecting the obligation of the oil / aviation company to obtain consents from the Ministry of Petroleum / DGCA (as the case may be if applicable). Irrespective of whether foreign law firms can practice non-litigation or not, the RBI consent cannot be faulted.
2. Can foreign firms practise non-litigation? Well in my view the answer is a mixed bag. The High Court may well be right by stating that the Advocates Act covers non-litigous practice also but it is foolish to use this as an excuse to ban foreign firms advising on aspects of foreign laws. The Advocates Act was certainly not enacted to regulate practise of foreign law in the country. It is not clear why the respondents took the plea that the Act does not cover non-litigous practice (Indian and foreign laws) completely but the High Court also went too far in holding that 'practice of law' includes foreign law
For myself, I think that this entire hysteria whipped up in the legal fraternity over entry of foreign law firms is nothing but a clever move by the top law firms in the country to avoid competition. Most of them are thoroughly unprofessional and cannot hold a candle to these foreign firms despite charging huge sums. All these foreign firms without exception target the corporate sector for non-litigous work and have no interest in the day to day legal representation before courts. Yet it is the solo advocates who feel threatened (thanks to the propaganda) and the rich firms that shed crocodile tears for their overseas' compatriots. The latter know only too well that their business would be wiped out if these foreign firms were allowed entry.
Bottomline - the clientale of these firms have no choice but to continue paying small ransoms for poor advice, rude lawyers and shoddy quality of work.
Would bankers, clients and accountants sitting in a hotel conference room in Delhi, negotiating and making amendments to a share purchase agreement constitute the practice of law? Again, clearly not.
Ultimately, this judgement makes the fundamental error of confusing the practice of law with the carrying out of commercial tasks, some of which may have a legal consequence. It is clearly illogical to label them one and the same.
1. The foreign firms could not rely on RBI approval when they never enrolled under the Advocates Act. Para 3 of the judgment sums up the issue: was there a need for the firms to enrol when they were practising non litigious matters? The court has said yes. So it was really a question of requiring enrolment and observance of procedure under the Advocates Act, which was also said to include non litigious matters.
2. Only practitioners of Indian law can enrol under the Advocates Act. Thus, the result would be that foreign law firms could not enter as they would not be able to enrol their lawyers qualified in a foreign jurisdiction, unless the Central Government passes an appropriate law/takes a decision to allow their entry (Para 59 of the Judgment) - for the practice of foreign law (though not expressly stated this seems to have been the intent).
I think a foreign law firm under the Advocates Act can enrol itself in theory (can a firm be enroled or are the lawyers enrolled - this distintion is not very clear from the judgment it seems) to practice Indian law - by say hiring Indian lawyers. It is a different matter that they would not want to.
Conclusion: Foreign law firms can enter and practice non-litigious foreign law only when the government so allows (going by Para 59).
Provided that foreign exchange management rules are complied with, I see no reason to prevent any foreign law firm from setting up in India and practicing their own law. The Advocates Act applies to Indian law and therefore Indian legislation and the Indian courts have no jurisdiction over the practice of foreign law here in India, unless Parliament expressly legislates to the contrary.
Kindly modify the article to the extent that the Judgement is delivered by Hon'ble Justice J. P. Devdhar, who is not the Chief Justice of Bombay High Court.
Its a interesting judgement and has got a debate kind of stuff started in the legal circle. The Bombay High Court is full of opinions and views of the people on the judgement.
[Thanks, we have amended the unintentional error.]
I see 2 types of non litigious matters - (i) based on Indian law; (ii) based on foreign law.. The fulcrum of the whole judgment seems to have been the need to ENROL (see paras 8, 10 - counsel submission; 40, 45 - para 45 calls the enrolment issues the "fundamental issue") in India and that the firms in questions did not do, but rather went first to the FIPB (who said no) and then to the RBI (who said yes).
All thats needed would be to have a minor amendment to the Advocates Act to provide for enrolment of foreign lawyers under the Advocates Act. Ha ha - any chance of that happening?
Even if the firms in question had wanted to enrol and not go the RBI (which was not competent to deal with the issue according to the court) they would still not have been able to enrol given the fact that they practice non-Indian/foreign law and the Advocates Act would surely not have provision for such enrolment.
before allowing foreign firms, BCI should at least straighten up things in house. systems should be in place so that foreign law firms are not taken by surprise and shy away from investing.
(1) Washed the dirty linen in public: everyone, including the foreigners and domestic lawyers eagerly awaiting the legal analysis of the provisions of the Advocate Act, have seen how vague [and out rightly disturbing] the provisions of the Act are. Every lawyer, no matter which side of the debate you are on, after reading the judgment must find it a stitch up. The judges were left helpless in making sense out of the words in the Act which is as old as time itself.
(2) Directions to GOI to decide on the fate of the firms.
(3) Intentional non-sensical judgment will open chances for this to be fought in the SC. That should politicise it massively both internationally and domestically, and the debate will reach the finals.
Some issues this raises:
1. Foreign lawyers cannot practice foreign law in India. Does that mean a foreign lawyer instructed by an Indian client on international elements of a deal cannot base himself temporarily in India? As per the judgment only an advocate can practice any kind of law and as the foreigner cannot be an advocate under the Act, he is not entitled to. So Indian clients should technically discuss everything over the phone or fly down to their lawyers abroad for all discussions, negotiations etc.
2. Foreign firms are not allowed to open liaison offices doing legal work on foreign law elements. This means a big blow the Indian LPOs.
3. What is the status of the lawyers not enrolled on the bar yet practicing as associates in law firms? Everyone has seen a lot of them around, some due to pure laziness or some because of no apparent need don't register themselves but still work.
4. If no legal work is happening at the liaison office, can it stay open in India? or is it still illegal?
[Link deleted as it points to registration only site, please only link to publicly accessible documents where you do not have to sign up to read them. -Ed]
Indian law is one of the most codified law of world and Indian lawyers are one of the finest.
The foreign firms can register themselves through the Indian lawyers whom they hire.....particularly so when they seem to agree that they will not remit any money outside India.
Those who are crying hoarse over the judgment please think and tell whether any Indian lawyer is allowed in, say, US to practice law directly although he is a qualified lawyer..........no...........then why demand such a thing in India which their own countries dont allow us to do..........
An Indian lawyer has to study further and then only he can ask for enrolment in foreign lands.
On another note, you all must be aware that most of the 1st world countries have stopped immigration for persons willing to apply as lawyers..........there is no such category now........
Wake up folks, they dont want to let you make money in their countries but are too eager to hog all that they can in India........
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