Foreign law firms must follow Indian norms or stop practice: Bombay HC

Foreign law firms must come under the Advocates Act, 1961, and enrol members in bar councils if they are to continue with chamber practice, the Bombay high court (HC) ruled on Wednesday. The order came on a PIL by the Lawyers’ Collective against the permission given by the RBI 15 years ago to three international firms to start liaison offices in India.

Till the Centre — as directed by the HC — takes a stand on the issue, the firms — New York-based Chadbourne & Parke and White & Case, and London-based Ashurst Morris Crisp — will have to either cease practice, or continue in accordance with the HC order.

An HC division bench of chief justice Swatanter Kumar and justice JP Devadhar held that chamber practice, or non-litigious legal work (case drafting and legal advice), amounts to practice of law. “Chamber practice is within the purview of Advocates Act. Section 29 of the act [covers both] litigious and non-litigious matters. Therefore… foreign law firms are bound to follow the provisions of the act.

“The RBI was not justified in granting permission to the foreign law firms to open liaison offices in India. Since the issue is pending before the government for 14 years, we direct it to take a decision expeditiously. Till then, the Advocate’s Act will prevail.”

The bench said that according to the act, only advocates enrolled in Indian bar councils are entitled to practice law in the country. It said the term ‘practice the profession of law’ includes 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 other words, even if foreign lawyers desire to work as consultants and not counsels in Indian courts, they need to be members of the country’s bar councils.

Counsel for the Lawyers’ Collective CU Singh argued: “The right to practice the profession of law cannot be said to be confined to the physical appearance in courts or tribunals or other authorities. It also includes giving legal advice, drafting and providing legal assistance. No country in the world permits unregulated practice of law and therefore the permission granted by the RBI gives an unfair advantage to foreign firms (since they cannot be held accountable for professional misconduct).”

Counsel for White & Case Navroz Seervai argued: “Unless legislation is enacted to regulate persons practising non-litigious matters, it cannot be said that such persons are governed by the provisions of the Advocate’s Act.”

But the HC held that the definition of ‘practise’ cannot be limited to only representing clients before courts.