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Foreign lawyer entry closer than ever: Read long-awaited BCI draft rules on liberalisation (to be discussed on Tuesday)

The liberalisation gates have never been this half-open
The liberalisation gates have never been this half-open

The Bar Council of India (BCI) has drafted rules to allow foreign lawyers to practice in India, with the law and justice ministry on 24 June inviting other four other ministries and three other organisations to discuss the proposals on Tuesday (5 July).

The new rules propose allowing foreign lawyers and law firms to set up their offices in India and to practice non-Indian law here, after registering with the BCI and paying between registration fees of between $25,000 for individual lawyers and $50,000 for law firms, while also depositing security deposits of between $15,000 and $40,000 for individual foreign lawyers and law firms respectively.

Foreign lawyers would be allowed to do all non-Indian law transactional legal work and could hire Indian lawyers or go into partnership with Indian lawyers.

Foreign lawyers would not be allowed to provide any legal advice relating to courts, tribunals, boards or statutory authorities, however, they would be allowed to appear as a lawyer for foreign-headquartered clients in international arbitrations held in India, irrespective of the type of law the dispute falls under.

Society of Indian Law Firms (Silf) president Lalit Bhasin, who will be attending on behalf of SILF on Tuesday, circulated the draft rules in an email to members, writing: “It should be appreciated that the Ministry has taken into consideration the stand taken by SILF for a phased sequential entry of foreign law firms to India. The draft rules do not entitle foreign lawyers / law firms to practice Indian law. Moreover, appearances in the law courts is not allowed.”

Apart from SILF’s Bhasin, the law ministry has also invited Indian Corporate Counsel Association (ICCA) secretary general Bhargav Bhushan Bhuyan, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), and the joint secretary of the Bar Council of India (BCI).

In addition to those bodies, the law ministry has also invited representatives not below joint secretary rank from the Ministry of External Affairs (MEA), the Ministry of Home Affairs, the Ministry of Finance and the Ministry of Commerce and Industry.

One partner at an Indian law firm, who declined to be named at the time of publication, commented that the draft rules were still slightly unclear in parts and whether they would comply with the Advocates Act without amendment, including on whether Indian firms could set up offices overseas and hire foreign-qualified partners.

He also said that the registration fees chargeable for individual foreign lawyers were too high, making it a very expensive proposition for Indian law firms to hire international lawyers.

The BCI has reportedly been drafting the new rules since earlier this year, after the government had taken a strong position vis-a-vis SILF and the bar councils that liberalisation should happen.

On 30 June 2015 the early proposals were sent to prime minister Narendra Modi for sign-off, with the commerce ministry mooting in July 2015 to allow foreign lawyers to arbitrate in India. In August 2015, India blamed the BCI before the WTO for slow progress in liberalisation, while SILF held a press conference and formally stated that it’s opposition to the phased entry of foreign law firms would end.

Also read from March 2015: Why foreign law firms are most likely to enter India now (or never): An investigation into the realities of legal policy, lobbying & backroom talks

Nutshell

In bullet points, the rules propose the following:

  • Require foreign lawyers to be registered with the BCI to practice foreign law in India.
  • This will allow foreign lawyers to be deemed an advocate within several sections of the Advocates Act, namely section 29, 30 and 33, allowing them to do transactional legal work, and in international arbitrations having their seat in India for foreign companies.
  • It will also allow them to open up law offices in India and hire local advocates, and to enter into partnership with Indian lawyers, and to work as an advocate for any Indian law firm.
  • Requires foreign lawyers to pay:
    • $25,000 registration fee for individuals,
    • $50,000 registration fee for partnership firms,
    • $10,000 / 20,000 renewal fee for individuals / firms respectively.
  • Requires foreign lawyers to deposit a security guarantee (without interest), which is returnable when the foreign lawyer voluntarily terminates foreign law practice in India or their registration expires, less any adjustments for penalties, etc. The deposit amounts are:
    • $15,000 for individuals,
    • $40,000 for law firms.
  • To register as a foreign lawyer to practise in India will require home and Indian government ministry certificates, as well as certificates of practice from foreign bar council-equivalent bodies.
  • Requires foreign lawyers to make a declaration on oath that they shall 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”.
  • Registrations will be valid for five years, renewable thereafter for $10,000 and $20,000 for individuals and firms respectively.
  • Foreign lawyers will be governed by the same disciplinary and ethical obligations as Indian advocates, which would be enforced by the Bar Council of India (BCI).

Silf’s view

The Society of Indian Law Firms (Silf) circulated the draft to some of its members today, with a cover email from president Lalit Bhasin that stated:

Dear Colleagues

Please find attached a very important document circulated by the Ministry of Law and Justice, Government of India, regarding draft Regulations for entry and registration of foreign lawyers / law firms in India.

As you will see this is a very limited circulation, addressed only to the Society of Indian Law Firms and Secretary, Bar Council of India. No other professional body of lawyers has been invited for the Meeting convened by the Ministry on 5th July 2016.

I will be attending the meeting on behalf of SILF. In case you have any comments / suggestions regarding the draft Regulations, please do not hesitate to share these with me, as these have this has far reaching consequences for the legal profession in India, and particularly for the law firms.

It should be appreciated that the Ministry has taken into consideration the stand taken by SILF for a phased sequential entry of foreign law firms to India. The draft rules do not entitle foreign lawyers / law firms to practice Indian law. Moreover, appearances in the law courts is not allowed.

I thought I should share these draft Rules with you as these are not in public domain as yet.

Best regards

LALIT BHASIN

Ministry invitation to discuss BCI new draft liberalisation rules (PDF)

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