Twelve years after the entry of foreign law firms in India was questioned by Lawyers’ Collective, Bombay High Court will finally begin re-hearing the case on Wednesday.
The crucial question that the HC needs to decide is can foreign law firms set up offices in India and whether the term “practice the profession of law” extends beyond appearing before a court to advising clients and drafting legal documents.
In 1994, two New York-based and one London-based law firm had sought permission from the Reserve Bank of India (RBI) to begin liaison office activities in India to advise and assist non-Indian clients in connection with their activities in India and outside India. The three law firms, White & Case (NY), Chadbourne & Parke (NY) and Ashurst Morris Crisp (UK) were granted permission under the Foreign Exchange Regulation Act (FERA) to start liaison activities.
However, in 1995, Lawyers’ Collective, a public interest trust set up by lawyers to provide legal aid, moved Bombay HC challenging the right of foreign law firms to “practice law” in India.
It stated that the Advocates Act, 1961, provides that only advocates enrolled in India are entitled to practice the profession of law in India. It argued that the term “practice the profession of law” would include not only appearance before courts and giving legal advice as attorney, but also drafting legal documents, advising clients on international standards and customary practices and transactions.
In October 1995, the HC said in an interim order, “In our view, establishing a firm for rendering legal assistance and/or for executing documents, negotiations and settlements of documents would certainly amount to practice of law.”
The judges held that the RBI licence did not amount to a permission to practice law, but only to establish a branch office to act as a communication channel between the head office and their parties in India. The HC ordered the government to conduct an inquiry into the issue and take appropriate action against the firms.
The foreign law firms challenged the HC order in the Supreme Court, which in March 1996, reverted the case back to Bombay HC, asking it to decide the matter expeditiously.
