The Indian Supreme Court is hearing a latest round of arguments in a long-running legal battle that could hold the key to opening up the country’s legal market to foreign lawyers.
The Bar Council of India (BCI) argued this week before the nation’s top court, appealing a 2012 decision when the Supreme Court reaffirmed a lower court decision in allowing foreign lawyers to visit India on a “fly-in, fly-out” basis, while giving advice on non-Indian law matters.
Next week, foreign firms such as Ashurst; Bird & Bird; Clifford Chance; Clyde & Co; Eversheds Sutherland; Freshfields Bruckhaus Deringer; Herbert Smith Freehills; Linklaters; and Norton Rose Fulbright will also appear before the court to put forward their case.
The pending matter of Bar Council of India v. AK Balaji & Ors has been a major roadblock to progress in the push for a liberalization of India’s restrictive legal market rules. The BCI had insisted that discussion about the forms in which foreign law firms can operate in India must wait until the case is decided.
The government of Prime Minister Narendra Modi has reportedly been planning to allow foreign firms to first set up in the country’s Special Economic Zones, where they will be permitted to give non-Indian law advice.
The BCI’s main objection against the AK Balaji decision, initially issued by the Madras High Court in Chennai, was that the court allowed foreign lawyers to handle international commercial arbitration work, as well as advise on matters in which Indian lawyers may not have the expertise.
The BCI considered both activities as the “practice of the profession of law,” and should be regulated under its rules and the country’s Advocates Act 1961.
The origin of the case dates back more than two decades ago when some foreign firms such as Ashurst and White & Case were licensed to have offices in India.
In 1995, a Mumbai-based professional organization called Lawyers Collective challenged the foreign firms’ Indian offices before the Bombay High Court. The court ruled against the foreign firms, citing the 1961 law that prohibited non-Indian citizens from being admitted to practice in the country.
The foreign firms appealed the decision the following year to the Supreme Court, which sent the case back to the Bombay High Court. Thirteen years later in 2009, the Bombay High Court reaffirmed that foreign law firm offices were unlawful.
The decision in 2009, however, did not address the issue of foreign lawyers practicing foreign law in India without a physical office. In 2010, a lawyer named A.K. Balaji filed another suit challenging some 30 foreign firms, including Davis Polk & Wardwell, on their ability to practice any law in India.
In 2012, the Madras High Court ruled in favor of the “fly-in, fly-out,” arrangement for foreign lawyers to visit clients in India. The Supreme Court affirmed the decision, which the BCI soon appealed. The proceedings had stalled until this week’s hearing.
Meanwhile, while the AK Balaji decision was being challenged by the BCI, another organization called the Global Indian Lawyers Association filed a petition in 2015 to challenge the 2009 decision by the Bombay High Court calling for a liberalization of the legal market. That case is now pending before the Supreme Court.