How foreign law firms are reacting to the opening up of the Indian legal market

The Bar Council of India (BCI) has allowed foreign lawyers and law firms to practice foreign law in India, in a bid to aid the growth of the legal profession in the country.

The BCI has come out with the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 to enable international lawyers and arbitration practitioners to advise on foreign law in India.

The announcement of the opening up of the Indian legal market comes after a recent visit by the Law Society of England and Wales, during which discussions on liberalisation were held with the BCI and the Union Ministry of Law and Justice.

The Society has welcomed the decision by the BCI to publish regulations to allow the establishment of foreign lawyers and law firms in India. Its President Lubna Shuja said,

“The Bar Council of India’s decision is a significant step forward in this long-standing issue and will create huge opportunities for solicitors and Indian advocates in both countries. It will also give a boost to India’s wider economic ambitions.

We look forward to engaging further on the implementation of the regulations, based on reciprocity of access, and on further initiatives to foster collaboration, cooperation and joint practice between Indian advocates and solicitors.”

Other lawyers from international firms have also welcomed the decision with open arms, while flagging a few issues that need clarity. Here are their initial reactions.

Ashok Lalwani, Baker McKenzie

Ashok Lalwani, Chair of the Global India Group at Baker McKenzie said that the firm had long been an advocate of a greater international legal presence in India, both from the firm's own strategic perspective, but also in terms of supporting economic development and foreign direct investment into India.

Baker McKenzie has around 300 lawyers in more than 40 countries outside of India working on India-related matters and supporting Indian multinationals as they expand, finance and diversify their businesses overseas. The firm also advises international companies looking to invest in the fast growing and dynamic Indian economy.

Lalwani, who is Singapore-based, said:

"With our long history of working on India-related matters and the scale of our India-focused team today, the possibilities that this announcement opens up are hugely exciting. We now need to review the Bar Council's announcement in detail and consider its implications for our firm, and the industry more broadly."

Nicholas Peacock, Bird & Bird

"I believe this is a confident and positive development that will benefit various aspects of the Indian legal and wider economy. In the field of international arbitration, the Indian arbitration ecosystem has been developing for some time with the support of key stakeholders including the senior Indian judiciary, Indian law firms and advocates, and arbitration institutions. 

In the meantime, talented Indian arbitration counsel have been enriching arbitration centres such as London and Singapore, amongst others, and bringing training and experience from other jurisdictions back to India.  The result is a dynamic talent pool and an arbitration environment that is ripe to develop further with the active participation of foreign and international firms. I welcome the publication of the Rules and look forward to seeing what comes next."

Mythily Katsaris, Fladgate LLP

"The new rules do not address the point on exclusive tie-ups between foreign firms and Indian firms, with each practicing their respective laws. I would hope that the Bar Council of India clarifies this point soon.

The Bar Council of India has permitted foreign lawyers to practice foreign law in India in non-litigious matters only, subject to compliance with BCI’s Rules and registration requirements. However, appearing in Indian courts, and advising on real estate matters in India, has been specifically excluded.

However, foreign lawyers who do not want to practice law in India under the new rules can continue to advise on a ‘fly in and fly out basis’, provided their practice does not exceed 60 days in any period of 12 months.

Overseas investors investing in India will have the comfort of working with their overseas lawyers if they are on the ground, in India."

Herbert Smith Freehills

"This is a hugely exciting development for the Indian legal and business communities and we are now considering the best options for our clients and the firm.

We have been committed to the region for decades and are regularly the firm of choice for international and Indian clients on their most important matters in India and overseas. We enjoy longstanding relationships with India's top law firms.

Our wider commitment to India includes our work with law schools and local charities. We also offer high-performing university law students in India internship opportunities in our London office."

Sherina Petit, Norton Rose Fullbright LLP

“When discussing the liberalization of the Indian market, I grew up hearing 'never in my lifetime'. As an Indian working in a liberalized market like London, I am proud to have seen this day during my career. With the Indian Prime Minister, the Indian Chief Justice and the Bar Council jointly endorsing the decision, it marks the start of a hugely exciting time in India’s future legal space. 

The particular emphasis on expanding capabilities and reach in corporate and arbitration work will certainly position India and its practitioners as a centre of expertise and excellence in these practices, affirming its position as one of the world's leading economies and international arbitration hubs.”

Manish Aggarwal, Three Crowns LLP

"The Rules define an “international arbitration case” as “an arbitration case concerning a commercial or monetary matter which is conducted in India in which all or any of the parties are persons who have an address or principal office or head office in a foreign country”. This definition is different from the definition of an “international commercial arbitration” under the Arbitration and Conciliation Act. It is unclear whether this was an oversight or if the framers of the Rules intended to adopt a different definition.

Although Rule 8(2)(ii) is not clearly drafted, it could be construed as permitting a foreign lawyer or firm registered under the Rules to appear in an India-seated arbitration: (i) which involves at least one person with an address, principal office, or head office in a foreign country; and (ii) only on behalf of such a person. It is unclear whether such a person could encompass, for example, an individual who is a national of India, or a company which is incorporated in India, but also has an address outside India. For any Indian individuals or companies without such overseas presence, the position is again uncertain, although it is difficult to see why foreign lawyers should not be permitted to represent such Indian parties in an India-seated arbitration.

The qualification in Rule 8(2)(ii) that “in such arbitration case foreign law may or may not be involved” is also ambiguous. One potential reading is that this Rule permits a registered foreign lawyer to appear as counsel in an India-seated “international arbitration case” (as defined in the Rules), even if the underlying contract is governed by Indian law and the case does not otherwise raise any issues governed by foreign laws. But that interpretation is not easy to reconcile with the other provisions in the Rules.

The lack of clarity in the Rules on fundamental matters, as discussed above, is regrettable, not least because it detracts from the ideals of certainty, efficiency and predictability, which are key to the development of any jurisdiction as an arbitral seat. Given the significance of the Rules for the Indian arbitration and business communities and India’s ambition to emerge as an arbitration hub, the BCI would do well to revise the Rules, or offer detailed guidance regarding their interpretation and application, in relation to arbitration matters, in consultation with the arbitration community."