In March this year, the Bar Council of India (BCI) decided to allow foreign law firms to handle international arbitration cases in India. The council said this move would help the “legal profession/domain grow in India to the benefit of lawyers in India too”.

The backstory

In its 2012 judgement, the Madras High Court had said that foreign lawyers and law firms can visit India for a short period to give legal advice to clients. The judgement said, “Foreign lawyers cannot be debarred to come to India and conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration.”

The BCI had then opposed the entry of foreign law firms and challenged the Madras HC ruling in the Supreme Court.

Eventually, in AK Balaji vs Government of India, the SC ruled that foreign law firms and lawyers cannot practise in India. It permitted only “casual visits” by foreign lawyers to provide legal counsel to Indian clients on a “fly in and fly out” basis.

On March 10, 2023, the BCI released a notification titled ‘Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022’.

This move was questioned by several members of the law fraternity.

“Indian law firms will be killed,” says Vinod Surana, Partner and CEO, Surana & Surana Attorney.

Surprise move

Surana says the BCI’s notification has taken the law fraternity by surprise. In 2016–17, there were talks between the BCI, the Ministry of Commerce, and the Society of Indian Law Firms (SILF) over the entry of foreign law firms into India. Since then, the BCI had repeatedly called for inputs from the Indian legal community on the question of opening doors to foreign lawyers.

At a meeting between SILF and BCI, the latter had promised to provide a draft notification for discussion within three weeks, but that never happened, says Surana.

Many legal experts, including Surana, believe that the reciprocity factor is a myth. To practise in the US, for example, an Indian lawyer would have to pass exams in each of its states to practise in any of them. Nor is it economically feasible for an Indian law firm in the US to hire a local lawyer.

‘No quid pro quo’

The legal fraternity therefore believes that the nod for the entry of foreign law firms has been given hastily, without getting anything good in return. “Earlier we were told that in exchange for opening up the Indian legal sector, the government would ask for the opening up of the e-commerce sector, relaxation of visa requirements for our workers, and more jobs for the IT sector,” he says. “However, we got nothing in return.”

The BCI has mentioned in its notification that if any foreign law firm indulges in misconduct then it would refer the matter to the disciplinary authority of the foreign country concerned.

Surana questions the efficacy of this response. “Suppose an American company sets up a factory in India and pollutes, would the government of India take action against it or write a complaint letter to the US environment protection authority?”