Indian Supreme Court Prohibits Practice Of Law By Foreign Firms In India

 

The Supreme Court is putting an end to foreigners giving legal advice in India, a ruling that will have extensive implications for international RCBI firms hoping to penetrate the market.

The Hon’ble Supreme Court of India recently passed a crucial verdict, concluding that foreign lawyers/firms are not entitled to practice law in India, either on the litigation or the non-litigation side, unless they fulfil the requirement of the Advocates Act, 1961, and the Bar Council of India rules.

This was a very high-profile legal battle fought between the Bar Council of India and many global law firms, associations, and foreign entities that dragged on for almost four years.   

Impacts anyone advising on immigration law

This judgment has far-reaching effects on the immigration industry and, in particular, the residency and citizenship by investment practice in India. 

As per the judgment, foreign law firms or foreign lawyers do not have an absolute right to practice law in India and will be governed by the code of conduct applicable to legal professionals in India. 

One of the arguments made was that lawyers are the ones who argue the case before a court. However, the Supreme Court has made it clear that practicing law includes not only appearance in courts but also involves giving of opinion, drafting of instruments, and participation in conferences involving legal discussion.

This regulatory mechanism of India for the conduct of advocates applies to non-litigation work also.

The Advocates Act of India, 1961, and the Scheme in Chapter-IV of the Act, make it clear that advocates enrolled with the Bar Council of India “alone” are entitled to “practice law”, except as otherwise provided in any other law. 

This means that any person, company, or entity in India involved in the practice of giving legal advice, be it foreign law or local law, is not entitled to do the same unless they have a licence to practice as a lawyer in India and are regulated by the Bar Council of India. 

In my opinion, immigration agents and consultants in India, who are not licensed and regulated, and who give legal advice regarding foreign immigration laws, are in violation of the Advocates Act of India. 

Further observations and clarifications made by the Supreme Court are more significant: 

  • The first observation made by the Court is that the prohibition applicable to any person in India, other than advocate enrolled under the Advocates Act, certainly applies to any foreigner also.

  • The visit of any foreign lawyer on a fly-in/fly-out basis may amount to practice of law if it is on a regular basis. A casual visit for giving advice may not be covered by the expression ‘practice’. This means a foreign lawyer visiting India on a regular basis to give advice to clients in India is likely to be in violation of the Act and subject to prosecution. 

  • The third and final remark made by the Court clearly indicates the gist of the judgment: “If in pith and substance the services amount to practice of law, the provisions of the Advocates Act will apply and foreign law firms or foreign lawyers will not be allowed to do so.” 

Based on this judgment, the central bank of India, known as the Reserve Bank of India (RBI), has issued special notifications on the “establishment of a Branch Office (BO)/Liaison Office (LO)/Project Office (PO) or any other place of business in India by foreign law firms,” which provides as follows: 

  • No fresh permission/renewal of permission shall be granted by the Reserve Bank/Indian banks to any foreign law firm for the opening of a Liaison Office in India. 

  • The Hon’ble Supreme Court has, while disposing of the case, held that advocates enrolled under the Advocates Act, 1961 “alone” are entitled to practice law in India and that foreign law firms/companies or foreign lawyers cannot practice the profession of law in India. 

As such, foreign law firms/companies or foreign lawyers or any other persons, residing outside of India, are not permitted to establish any branch office, project office, liaison office, or other place of business in India for the purpose of practicing a legal profession.  

In view of this, all banks in India are directed not to grant any approval to any branch office, project office, liaison office, or other place of business in India under the Foreign Exchange Management Act (FEMA) for the purpose of practicing a legal profession in India. 

  • Further, Indian banks shall bring to the notice of the Reserve Bank in case any such violation of the provisions of the Advocates Act comes to their notice.

It is the first time that such an action by the central bank of India has been taken and it is sure to have a significant impact on the residency and citizenship by investment practice in India. 

In view of the above, not only foreign lawyers but also Indian or foreign immigration firms and companies who have registered a company in India, established their presence in India, and are dispensing advice on foreign or Indian laws, including immigration law, are also in violation of the Advocates Act of India and subject to prosecution. 

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Prashant Ajmera AuthorSubscriber

Prashant Ajmera is an India-based immigration attorney with more than 25 years of experience in the field of investment migration. He is the principal of Ajmera Law.