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Exclusive: BCI Chennai writ affidavit swears it has power to but won’t relax foreign firm restrictions; Next hearing pushed

BCI remains conservative: No change to status quo until disparities at bar are gone
BCI remains conservative: No change to status quo until disparities at bar are gone
The Bar Council of India’s (BCI) counter-affidavit filed in the AK Balaji Chennai case against 31 foreign law firms said that the BCI has decided not to relax the restrictions prohibiting foreign lawyers from practising and that the issue raised by the writ was “no longer res integra” because it had been settled in the 2009 Lawyers Collective case.

Legally India understands that the BCI’s thinking is that internal disparities at the Indian bar need to be eradicated through reform before making any decision on foreign firms.

The next hearing in the Chennai writ petition has now been postponed until 11 October, having been scheduled for 22 September at its last hearing on 2 August. It is understood that the hearing was postponed due to unavailability of several US firms’ senior counsel Abhishek Manu Singhvi at the earlier date. One lawyer familiar with the case told Legally India that it was unlikely that the case would finish at the next hearing due to the number of respondents who could file replies.

The affidavit was sworn by BCI officiating secretary JR Sharma on behalf of the seventh respondent, the BCI, on 29 July and submitted to the Madras High Court for the 2 August hearing.

In paragraph 10 of the affidavit he stated that the BCI “has decided not to relax any of the statutory norms for practice of law in India by exercise of its powers” under the Act and that “the same” had also been resolved in the November 2007 meeting between the BCI and state bar councils in Kochi.

Sharma’s 13-paragraph affidavit ended with a prayer for the court to “pass orders as it deems fit in the ends of equity, justice and good conscience” without elaborating further on the arguments of Balaji’s original petition [See box The original prayers].

Sharma’s affidavit began in the second paragraph with: “At the outset, I state that the issue raised in the present writ petition is no longer res integra, and has been settled by judgment and order of the High Court of Judicature at Bombay dated 16th December 2009 […] in the matter of Lawyers Collective v. Bar Council of India. The Bombay High Court has therein held that practice of law would include even non-litigious practice and therefore, foreign lawyers i.e. lawyers not enrolled as Advocates under the provisions of the Advocates Act, 1961 would not be entitled to practice.”

The original prayers

Chennai advocate AK Balaji’s original affidavit in support of the writ petition case stated:

"…various International Law Firms, having their routes outside the Territory of India, have opened up Offices in India or in neighboring countries and are operating the legal practice within India, such as Mergers, Take-overs, Acquisitions, Amalgamations etc. and are into various commercial transactions, arbitrations so on and so forth.

"Moreover, the advocates from various foreign law firms are often visiting India and conducting seminars in various parts of our country. They are entering in to India through visitor’s visa but the actual intention of their visit is to indirectly market and earn money out of clients from India by way of seminars. Moreover they are also conducting arbitration in Indian Hotels and for which the Payments are made to their head office located outside India. This is complete violation of our country’s Income Tax laws, Immigration laws and loss of revenue to our country. Similar to this there are numerous foreign law firms that are draining our Indian legal market."

His affidavit then prayed for the court:

“to grant an order of interim injunction restraining the Respondents [foreign law firms], their men, agents, servants or any other person or persons authorized by them or claiming through them, from in any manner practicing the profession of law, both in Court of Law, tribunals, etc and in dealing with non-litigation, commercial transactions within the territory of India, pending disposal of the above Writ Petition and thus render justice.

“[and] to issue a Writ of Mandamus or any other appropriate writ, order or direction in the nature of Writ of Mandamus directing the Respondents to take appropriate action against the Respondents 9 to 40 or any other Foreign law firms or foreign lawyers who are illegally practicing the profession of law in India and prohibit them from having any legal practice either on the litigation side or in the field of non-litigation and commercial transactions in any manner within the territory of India, and pass such further or other orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case and thus render justice.”

It then quoted paragraphs 51 and 54 of the Lawyers Collective judgment, which respectively held that the Advocates Act applied to lawyers acting in litigious and non-litigious matters because there was no reason to assume that Parliament would have left the non-litigious part of the legal sector unregulated.

Sharma proceeded to set out the function of the BCI and the Advocates Act, explaining the requirements of enrolling advocates under the Act’s section 24, including the “clearly cumulative” conditions that:

  • a person “applying to be enrolled should be a citizen of India”, “subject to the other provisions contained in the Act,
  • “a national of any other country may be admitted as an advocate on a State roll, if citizens of India, duly qualified, are permitted to practice law in that other country”,
  • the person satisfies the minimum age requirement of 21 years, obtained a degree in law from a University recognised under the Act or a foreign qualification recognised by the BCI, and fulfils any other conditions made by state bar councils.

He added in paragraph 7 and 8 of the affidavit that the BCI does have the power under the Act to relax the “rules for recognizing foreign qualifications in law obtained by persons other than citizens of India for the purpose of admission as an advocate under the Act”, although currently only citizens of India were eligible to practice.

Sharma then stated in paragraph 9 that “practice of law” under the Advocates Act subject to BCI regulation included the practice of foreign law within the territory of India by practitioners registered abroad. In paragraph 11 he noted that the BCI’s view, in line with the Lawyers Collective judgment, is that the Advocates Act’s provision apply with “equal force” to both litigious and non-litigious practice of law and myriad other functions performed by a lawyer.

Thought processes

An internal BCI draft affidavit from earlier in 2011 – still during the time of Gopal Subramanium’s tenure, who has since been replaced as BCI chairman - is understood to have contained around 10 additional paragraphs, which were not present in the latest draft.

Legally India understands from sources with knowledge of the BCI’s case and strategy that the then-stated reasons for the BCI’s choice not to allow foreign firms were due to the BCI’s perception of the internal disparities faced by the Indian bar and that the BCI was currently carrying out reform plans in the field of legal education, such as the All India Bar Exam (AIBE).

The previous draft is understood to have included a statement reflecting the BCI’s resolved position that it was necessary for the reform process to continue to level the Indian playing field before making decisions on whether to allow foreign lawyers.

The draft submitted before the court included no reasoning on the decision.

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