India liberalisation blow as foreign firms lose landmark case

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  • What is going to happen to all these Indian lawyers working in UK law firms in London and providing Indian legal advice?

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  • I have read (briefly though) the text of the decision. it is available on www.legallyindia.com
    i do not think that it is a blow for liberalisation. it is delivered on technical grounds and simply asks the government of India to make rules for entry of foreign firms. In fact this clears the way for government to take a decision, rather than hide behind (which it has been doing all along) the excuse of the matter being sub-judice.

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  • Read further news on this story @ www.barandbench.com - I agree with anonymous...there is nothing....in the judgment that suggests that it is a 'blow' to the liberlisation process....and for all who know the Indian legal mechanism...there will be an appeal to Supreme Court for sure?

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  • Well done India.

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  • Anonymous raises a very good point. It's not the end of the world and it begs the question, will Moily be able to cobble together enough support to clarify the Advocates Act and destroy the monopoly of the family firms?

    The actual judgement itself is astonishingly silent on whether foreign firms can practice foreign law.

    Despite a minor reference to a NY Court of Appeal case which is pretty obiter dicta, it cannot be logical for an Indian court to determine whether a foreign law firm operating from its soil can practice foreign law or not - surely that is purely a matter for the relevant professional foreign body and has nothing to do with the Bar Council of India or the courts of India?

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  • Clearly anyone is able to provide Indian Legal advice. They just can not offer it in India. Lawyers doing outbound work will be fine.

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  • I''m sorry if I'm nitpicking, but the usage of the term illegal is driving me crazy. I'm not sure if this is an accepted common law definition, but in India, 'illegal' means an act expressly proscribed by law and generally accompanied by a penal provision. The Court in this case expressely refrained from using the word 'illegal', preferring the term 'bad in law', which has an entirely different connotation, especially since the act of the RBI granting permission to these firms was not in contravention of law, but due to a misinterpretation of the specified provision.

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  • To anonymous : Obviously you have not read the judgement. Since neither does the judgement nor the Advocates Act applies to firms outside India. They could in thoery provide any amount of Indian law advise to their clients (subject to cleint satisfaction of course!!). Look at any deal happening in India today all (or a large majority) have a foreign law firm on board.

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  • This could be a blessign in disguise for foreign law firms, since the court has prodded the Indian govt to take a decision soon. There are many pro-reform minsiters in India and foreign law firms may be allowed in sooner rather than later.

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  • Since W&C does not have much of an India practice left after all the departures over the past few years, this decision should not affect them much.

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  • Some of the media has over hyped this judgment. What the Court has said is simple. One, Lawyers who are not enrolled as Advocates with the State Bar are not allowed to practice law in India. Second, the liaison office of these law firms, who were essentially carrying on legal functions are not permissible in India and the RBI permission to them is not valid. Almost everywhere in the world, enrolling to the Bar is the first requirement.

    It is a separate issue whether foreign lawyers can enrol to the state bar. The decision on that, which has to be taken by the Government has been pending. If you are foreign law firm and want to start a law firm in India with only advocates who are registered at the Bar in India, i dont see anything wrong there. Thats what all the magic circle firms are doing. lets read the fine print before we start commenting on whether INdia has blocked liberalization, etc etc

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  • Some of the media has over hyped this judgment. What the Court has said is simple. One, Lawyers who are not enrolled as Advocates with the State Bar are not allowed to practice law in India. Second, the liaison office of these law firms, who were essentially carrying on legal functions are not permissible in India and the RBI permission to them is not valid. Almost everywhere in the world, enrolling to the Bar is the first requirement.

    It is a separate issue whether foreign lawyers can enrol to the state bar. The decision on that, which has to be taken by the Government has been pending. If you are foreign law firm and want to start a law firm in India with only advocates who are registered at the Bar in India, i dont see anything wrong there. Thats what all the magic circle firms are doing. lets read the fine print before we start commenting on whether INdia has blocked liberalization, etc etc

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  • To anonymous :

    UK firms will continue to do what they have done through the recession - send the Indian lawyers, they had hired in anticipation of the market liberalising, packing... Clearly showing their lack of commitment, vision or long term strategy.

    It's about time the UK firms get off their high horse and lose their sense of entitlement - they can't expect to just show up in India and expect clients to give them work just 'cause they're British...

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  • Although this may sound odd, this is actually moderately good news for law firms looking to enter India. The Court case was holding back any real debate in Government circles and now it is settled, and settled very badly, ie the ruling only covers the practise of Indian law in India. This failure to deal with the wider issue , ie foreign firms offering foreign legal advice in Indian, demands that the Government steps in and sorts things out with the Bar Council. The most predictable outcome now, which would not undermine the ruling, will be that the Government allows a Chinese style system whereby foreign firms can enter but not per se offer Indian legal advice. Foreign firms will set up, hire Indian lawyers as 'consultants', form alliances with Indian firms, and the whole issue will be solved up to a point.
    This approach has worked in China and Brazil and will probably work in India too. It's also the best option for the Government to find a suitable compromise.

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  • The judgment represents the Indian Law as it stands today. India needs to adopt many changes to present legislations on the global perspective. Even the Advocate Act bars the practice of lawyers of one state in the other state unless he gets transfer his name from one state to other state. Where as in USA, a lawyer may qualify to practice in many states by passing the Bar exams and enroll before such states. In many countries the Law allows the foreign law firms to recruit Local Lawyers to practice in that country. India also can consider allowing foreign law firms on reciprocal basis where the Indian Lawyers are allowed to practice in such country after getting through in requisite examinations. UK allows Indian lawyers to practice as solicitors in England & Wales by writing requisite QLTT (Qualified Lawyers Transfer Test). States like California and New York allows Indian Lawyers to practice in such state by passing in Bar Exams and such other qualifications. American Bar Association and other Bar Associations in the United States have opined there is no unethical practice involving American Lawyers to outsource legal processes to India. Since the matter being so, what would come to the American and British mind is since the foreign lawyers are not allowed to practice any kind of practice and not allowed to set up their office in India why they need to outsource the legal work to countries like India. This would really slowdown the growth of LPO's in India.

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