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Upset BCI U-turns, throws spanners into today’s legal liberalisation talks • Ball now in GOI (and Supreme) court

BCI changes its mind on liberalisation after discussion floats possibility of alternative regulator
BCI changes its mind on liberalisation after discussion floats possibility of alternative regulator

The Bar Council of India (BCI) has backtracked on its earlier full-throated support of liberalisation of the legal market in a six-page letter, saying that it had encountered “strong opposition” from state bar councils and was therefore withdrawing its earlier draft rules to allow foreign lawyers.

The BCI also argued in its letter to the ministry that it would be “tantamount to contempt of court” and a “travesty of justice and of the higher court of the land” if the discussions with the Government on liberalisation continued before the Supreme Court gave its final judgment in the AK Balaji case, which started in the Madras high court in 2010.

The BCI implored in its letter, signed by secretary Srimanto Sen, that today’s meeting should be cancelled and no decision should be taken until the Supreme Court made its decision in the case.

The BCI also slammed “the babus” for having “kept one election rule framed by the Bar Council of India in abeyance and is not publishing it [in the Gazette] for the last about 5-6. They are only interested in delaying things and are making on query after another regarding such rule, though they have no jurisdiction over this issue at all”.

(Incidentally, under section 49A of the Advocates Act the Central Government has the same power as the BCI or state bar councils to make BCI rules under the Act, which override any BCI-promulgated rules).

The BCI letter “seeks indulgence” of the law minister, stated the letter, and “makes a humble request... to stop the concerned bureaucrats to stop such mal-practice going on in the Ministry at the behest of some bureaucrats” in the law ministry, who were “trying to usurp the powers and functions of the Bar Council of India” and are “trying to bring separate legislature for regulating foreign” lawyers, without “understanding the nuisances (sic) and intricacies and the legalities involved”.

The BCI’s draft rules on liberalisation had envisaged the BCI regulating the entry of foreign law firms (and the BCI charging between $25,000 for accrediting individual lawyers and $50,000 for allowing each foreign law firm, in addition to respective security guarantees of $15,000 and $40,000).

The BCI draft was rejected by the Society of Indian Law Firms (Silf) as illegal and too wide-ranging, was replaced in the Indian Corporate Counsel Association (ICCA) proposal with a new draft bill, and questioned by ministry officials and at the 5 July meeting, particularly on whether the BCI should necessarily be the body that should regulate foreign lawyers or whether an independent new body could be considered.

As for its resistance from state bar councils, the BCI noted (emphasis added):

At the very outset it would be extremely pertinent to point out that this matter has been thoroughly discussed and deliberated upon in a joint meeting held on 13th August, 2016 at Chandigarh, which witnessed active and vociferous involvement and participation of all State Bar Councils and the Bar Council of India, being represented by it’s respective members.

Therein the opinion of the government to allow entry of foreign law firm and foreign lawyers into India was also thoroughly discussed and considered. It would be relevant to note that in the said meeting the entire legal fraternity of all states being represented by their respective State Bar Councils, comprising eminent member advocates of repute and expertise in the field of law had vehemently opposed the stand of the Bar Council of India and the draft rules framed by the Bar Council of India, which had showed an inclination towards allowance of foreign lawyers and foreign law firms to operate in India.

In the face of such strong opposition over this delicate and intricate issue by the entire legal fraternity of the country being represented by the duly elected and highly esteemed respective State Bar Council Members, the Bar Council of India thought it prudent to give credence to their views.

Thus the Bar Council of India withdrew the Draft Rules for regulation of foreign lawyers and foreign law firms in it’s Council meeting dated 27th August 2016.

The BCI criticised the Foreign Legal Practitioner’s (Regulation of Practice) Bill 2016 which, according to the BCI “got drafted by some unheard of organization which goes by the name of ICCA through some equally unheard of Rasich Group”, and said that this “serious issue” of “utmost importance to the future of the legal fraternity” could not “be deliberated upon by an inconsequential organization like ICCA” which has no “locus standi on these issues”.

Earlier today we published and analysed the Indian Corporate Counsel Association (ICCA) draft, which proposed a statutory amendment, scrapping the BCI draft rules and establishing a new regulator other than the BCI.

For more on our liberalisation coverage click here, or read:

The BCI’s U-turn documented

In the preamble to its draft rules, the BCI had said in June 2016 in its note to the ministry that it was “authorized by the legal fraternity of the Country in the years 2007-2014 in a Joint Consultative Conferences of Bar Council of India nad Chairmen, Vice-Chairmen and Chairmen of Executive Committees of all the State Bar Councils in India to hold dialogue with” stakeholders and ministries to “explore the potential and prospects” of liberalising the Indian legal market for non-litigation work.

The BCI had then added in its note to the ministry:

Time has come to take a call on the issue. Bar Council of India is of the view that opening up of law practice in India to foreign lawyers in the field of practice of foreign law; diverse international legal issues in non-litigious matters and in international arbitration cases would go a long way in helping legal services grow in India to the benefit of lawyers both from India and abroad.

It is noteworthy that the standards of Indian lawyers in proficiency in law is comparable with the international standards and the legal fraternity in India is not likely to suffer any disadvantage in case law practice in India is opened up to foreign lawyers in a well controlled and regulated manner on the principle of reciprocity as it would be mutually beneficial for lawyers from India and abroad and these Rules are an attempt by the Bar Council of India in this direction.

In case, we sleep over the matter, the legal fraternity of India may be left behind in providing legal services to this fast growing class of service seekers in the field of law in India.

Let us ensure that the opportunity for creating a hub for such legal services in India is not lost...

Taking an all-inclusive view, the Bar Council of India resolves to implement these Rules establishing the foreign lawyers to practice foreign law and diverse international law and international arbitration matters in India on the principle of reciprocity in a well defined, regulated and controlled manner.

Stakeholders comment on BCI pulling out

ICCA founder president Ashok Sharma commented:

It isn't relevant how small or large the stakeholder is. Our contribution is to the discussion initiated by the Law Ministry. We want a meaningful and thorough discussion on all the issues  and thus have drafted this bill to cover all the points that need threadbare deliberations.

The BCI is of course an important stakeholder and we respect them. We would suggest a structured dialogue not just on the BCI rules or our Bill, but the overall policy which transcends any one stakeholder.

This is not just only a matter of lawyers - it is a matter of the Indian economy, foreign relations and many other aspects such as level playing field for Indian legal professionals etc.

Society of Indian Law Firms (Silf) president Lalit Bhasin commented:

“Today's meeting convened by the Ministry of Law and Justice to discuss Draft BCI Rules regarding foreign law firms witnessed a significant development - BCI has in a communication dated 27.09.2016 withdrawn the said Draft Rules and requested the Ministry not to hold any meeting and stay its hand till a final decision is taken by the Bar Council of India after the verdict of the Hon'ble Supreme Court which is pending consideration of the Hon'ble Court.

“Bar Council has virtually conceded that the said Draft Rules did not have any official or legal backing. Copy of BCI's letter of 27.09.2016 is attached.

“Accordingly the stand taken by SILF andf the Bar Association of India has been upheld by the author of the Draft BCI Rules itself. Today's meeting stood closed and we do not know what will be the future course of action.”

INBA member Manoj Kumar, who also attended today’s meeting, commented:

The government is very clear that the process of reforms on this account cannot be at the mercy of the Bar Council of India.

Therefore the law ministry went ahead to take the inputs of the stakeholders and take the process forward.

Addressing concerns of ease to do business remains as the centerstage of the reforms and the law ministry agreed to take the process forward.

An appeal by Silf to close the process was not heeded to by the law ministry.

Update 30 September: Bhasin added, in response to Kumar:

You may ask Mr Mishra the Joint Secretary who was chairing the Meeting in the absence of the Law Secretary if he made such a statement as is being attributed to him.

Manoj Kumar and others from INBA insisted that even in the absence of Draft BCI Rules which stand withdrawn the Government should go ahead and look into the presentations but this was opposed by all other participants including SILF, BAI, ICCA, ASSOCHAM and even by Mr. Sudanshu Pandey Joint Secretary, Ministry of  Commerce on the ground that there is no subject matter for discussion - the Meeting was called to discuss Draft BCI Rules which become non-existent. The present proceedings stood closed.

The Government may decide  to come up with fresh proposals but that does not seem likely.

BCI letter cancelling its liberalisation participation

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