Foreign law firms case: Will step in if BCI fails to frame rules, say Centre

New Delhi: The Central government on Wednesday told the Supreme Court that the Bar Council of India (BCI) would frame rules to open up the legal sector to foreign lawyers and law firms, failing which it would, and urged the court to quickly wrap up two cases pending before it on the issue.

“The government wants to work with the Bar Council of India. It must frame the rules, or the government will step in and frame it. It is not that the government lacks the jurisdiction to do so,” Additional Solicitor General Maninder Singh told a bench, comprising Justices Adarsh Kumar Goel and UU Lalit.

The BCI, on its part, said it was willing to frame rules to allow foreign firms on the basis of reciprocity, but did not want to give foreign arbitrators a free run in the country.

The Council also expressed its reservations on allowing foreign law firms to open liaison offices in India, currently barred by the Bombay High Court. Two cases, challenging a Bombay High Court order and another a Madras High Court order, have been pending for over five years.

The government had, in July 2017, filed an early hearing petition urging the court to wrap up these cases quickly.

The Madras High Court had, in 2012, allowed foreign lawyers to fly in and out of the country to advise their clients.

This was challenged by a lawyer. The Bombay High Court, in another ruling in 2009, disallowed foreign firms from setting up liaison offices in India with RBI permission.


In response to the government plea for an early hearing, the two-judge bench hearing the case began hearing opposing arguments on both sides. Appearing for the BCI, senior advocate CU Singh said the BCI only wants the rules to take care of the recipro-city issue by other countries so that they extend similar facilities to Indian lawyers. It was also against any lawyer functioning in India outside the regulatory regime. “They can’t have a carte blanche, do what they wish,” CU Singh argued. He was, however, averse to foreign arbitrators being allowed to freely take part in Indian arbitration.

“Arbitration is also part of legal practice,” he contended, suggesting that arbitration must also be subject to BCI regulations. He said the BCI was willing to work things out, but the commerce ministry had brought in a foreign body to draft a law to open up the sector bypassing it. “That is not acceptable.” The BCI is the top regulato ry body regulating both educational standards and legal practices in India. It also takes disciplinary action against errant lawyers and faulty educational standards. His suggestion that arbitration be subjected to BCI oversight was vehemently opposed by senior advocate Dushyant Dave who appeared for the London Council of Arbitration.

“This will finish off arbitration in India and act as a dampener on investment,” he argued. “No one will sign contracts which have India as the seat of arbitration or under Indian laws,” he cautioned. “We, Indian lawyers, appear in every forum around the world. We don’t have to seek any permission,” he contended.

Dave suggested that the court appoint senior advocate Fali S Nariman as the amicus to help out the court in deciding whether arbitration should be subject to BCI regulations or not.

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