The Battle over Market Liberalisation (Round 78,919): BCI versus SILF [Also read BCI’s Draft Rules]

The Battle over Market Liberalisation (Round 78,919): BCI versus SILF [Also read BCI’s Draft Rules]

Pallavi Saluja

Pallavi Saluja & Anuj Agrawal

In one of the most unequivocal statements regarding the entry of foreign law firms, the Bar Council of India has admitted that liberalisation will “go a long way” towards the growth of the Indian legal market. This is just one of the reasons cited by the BCI for framing the draft rules for the “registration and regulation” of non-Indian lawyers in the country.

These draft rules are up for discussion at a meeting to be held tomorrow by the Law Secretary. Suresh Chandra, the new Law Secretary has invited SILF President Lalit Bhasin, officials from the Ministry of Finance, the Ministry of External Affairs, the Ministry of Home Affairs, Bhargav Bhuyan from ICCA, the FICCI President Harshavardhan Neotia and BCI’s Joint Secretary Ashok Pandey to discuss these draft rules.

The process of framing the rules had begun in March this year, when officials from the BCI met the then Law Secretary PK Malhotra, and had agreed to prepare draft regulations.

The outcome of tomorrow’s meeting, could very well be a crucial step towards the opening of the Indian legal market. After all, as the BCI has admitted in the draft rules, it was the BCI that was one of the major opponents of liberalisation.

Speaking to Bar & Bench, BCI Chairman Manan Kumar Mishra said,

“We have framed the draft rules for the entry of foreign lawyers. However, all this is subject to the decision of the Supreme Court of India”.

Ex-Law Secretary Malhotra too had told Bar & Bench that,

“Once the regulation is finalised, we will make a submission before the Court”.

The BCI Chairman and former Law Secretary are referring to two petitions pending in the Supreme Court. The first is BCI’s appeal against the Madras High Court’s decision in AK Balaji that allowed foreign lawyers to “fly in fly out” to advise their clients.

The second is an appeal filed by Global Indian Lawyers, against the 2009 Lawyers Collective judgment. And, unlike the AK Balaji case, the society does not want to limit discussion to the “fly in fly out” provision; rather it wants the apex court to decide whether the entry to foreign law firms is permitted.

So what do these draft rules say? In terms of substance, the rules simply lay down the procedure to be followed. To register, foreign lawyers will be required to submit certificates from the government of the foreign country and the Indian government ministry. The foreign lawyer also needs to submit certificate of practice from foreign competent authority as well as a ‘no-objection’ certificate. There also has to be undertaking given that the foreign lawyer will not practice Indian law in any form or before any court of law.

The Registration will be valid for five years and can be renewed before the expiry of five years. The registration fee for an individual foreign lawyers will be $25,000 and for a firm $50,000 while the renewal for individual is $10,000 and for firm is $20,000.

There is also a requirement of security deposit of $15,000 from foreign lawyer and $40,000 from foreign firm.

Once registered with the BCI, foreign lawyer/law firm will be allowed to open law offices in India to enter into partnership with Indian lawyers, to hire local lawyers and will also be allowed to work for an Indian lawyer or any Indian law firm.

So does this mean that India will see the entry of foreign law firms? Well, as has been pointed out earlier, the matter is currently pending before the Supreme Court. If the parties to the litigation choose to withdraw their litigation, then liberalisation could happen, and happen extremely quickly.

Having said that, these are draft regulations and may take some time to fructify into actual legislation.

But perhaps the most significant opposition may well be from the Society of Indian Law Firms.

Speaking to Bar & Bench on the Draft Rules submitted by the BCI, SILF President Lalit Bhasin said,

“We have not been given enough time to consult with our members on these Rules. In tomorrow’s meeting, we would be requesting the Law Secretary to give us some more time to consult with our members and submit our comments.”

“As far as the Rules our concerned, we had earlier submitted to the Ministry that first we need to internally liberalize our own legal market, which includes removal of difficulties in the LLP format, permitting issue of firm brochures, maintaining websites, directory listings, and other means of market development and information dissemination for a firm. However, the same is not reflected in the Draft Rules.”

“Further, we had provided that after internally liberalizing our domestic market, foreign lawyers and foreign law firms may be permitted to have presence in India subject to certain conditions, such as prescribed qualification criteria, permission to practise only their “home country” law and prohibition against practising, directly or indirectly, the law of India, or in any way associating with Indian lawyers.

That is not all. Bhasin contends that the Draft Rules, particularly Clause 9, appear to be in contravention of the provisions of the Advocates Act itself.

“These Rules are in complete violation of the Act as the Rules allow foreign firms to enter into partnership with Indian law firms and indirectly practice Indian law. This is in complete contravention of the Advocates Act.”

You can read the draft rules below. The news about BCI Draft Rules was first published by Legally India.

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