Court delivers big blow for foreign firms

The Supreme Court of India has stated that foreign law firms should not be allowed to set up liaison offices in India. The 4 July order relates to a special leave petition filed by the Bar Council of India (BCI) against the ruling of Madras High Court in February that foreign firms could “visit India for a temporary period on a fly in and fly out basis” to advise their clients on foreign law.

The BCI’s special leave petition maintains that Madras High Court did not consider a 2009 judgment from Bombay High Court in the Lawyers Collective case, which held that the practise of law includes chamber practice, providing opinion on legal issues and involvement in seminars and legal conferences. The BCI’s key argument is that lawyers who are not enrolled under the Advocates Act, 1961, must not be allowed to practise or advise on law in India, even if they are offering guidance on foreign law.

The Supreme Court clarified that the Reserve Bank of India must not permit foreign firms to open liaison offices under section 29 of the Foreign Exchange Regulation Act, 1973, and that foreign firms “shall be bound to follow the provisions contained in the Advocates Act, 1961”.