corporate laws – whether foreign law firms/lawyers are permitted to practice in India = (i) Whether the expression ‘practise the profession of law’ includes only litigation practice or non-litigation practice also; 46 (ii) Whether such practice by foreign law firms or foreign lawyers is permissible without fulfilling the requirements of Advocates Act and the Bar Council of India Rules; (iii) If not, whether there is a bar for the said law firms or lawyers to visit India on ‘fly in and fly out’ basis for giving legal advice regarding foreign law on diverse international legal issues; (iv) Whether there is no bar to foreign law firms and lawyers from conducting arbitration proceedings and disputes arising out of contracts relating to international commercial arbitration; (v) Whether BPO companies providing integrated services are not covered by the Advocates Act or the Bar Council of India rules. – We, however, modify the direction of the Madras High Court in Para 63(ii) that there was no bar for the foreign law firms or foreign lawyers to visit India for a temporary period on a “fly in and fly out” basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues. We hold that the expression “fly in and fly out” will only cover a casual visit not amounting to “practice”. In case of a dispute whether a foreign lawyer was limiting himself to “fly in and fly out” on casual basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues or whether in substance he was doing practice which is prohibited can be determined by the Bar Council of India. However, the Bar Council of India or Union of India will be at liberty to make appropriate Rules in this regard including extending Code of Ethics being applicable even to such cases. We also modify the direction in Para 63 (iii) that foreign lawyers cannot be debarred from coming to India to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration. We hold that there is no absolute right of the foreign lawyer to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration. If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act. However, they will be governed by code of conduct applicable to the legal profession in India. Bar Council of India or the Union of India are at liberty to frame rules in this regard. ; We also modify the direction of the Madras High Court in Para 63(iv) that the B.P.O. Companies providing wide range of customized and integrated services and functions to its customers like word processing, secretarial support, transcription services, proof reading services, travel desk support services, etc. do not come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules. We hold that mere label of such services cannot be treated as conclusive. 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.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.7875-7879 OF 2015

BAR COUNCIL OF INDIA …APPELLANT

VERSUS

A.K. BALAJI AND ORS. …RESPONDENTS

WITH

CIVIL APPEAL NO.7170 OF 2015

(Association of Indian Lawyers versus M/s. London Court of

International Arbitration (LCIA) and ors.)

AND

CIVIL APPEAL NO. 8028 OF 2015

(Global Indian Lawyers versus Bar Council of India & Ors.)

J U D G M E N T

ADARSH KUMAR GOEL, J

1. The issue involved in this batch of matters is whether

foreign law firms/lawyers are permitted to practice in India.

Reference needs to be made to two leading matters. Civil

Appeal Nos.7875-79 of 2015 have been filed by the Bar

Council of India against the Judgment of Madras High Court

dated 21st February, 2012 in A.K. Balaji versus The

Government of India

1

. Civil Appeal No.8028 of 2015 has

1 AIR 2012 Mad 124

1

been filed by Global Indian Lawyers against the judgment of

Bombay High Court dated 16th December, 2009 in Lawyers

Collective versus Bar Council of India

2

.

2. The Madras High Court held as follows:

“63. After giving our anxious consideration to the

matter, both on facts and on law, we come to the

following conclusion :-

(i) Foreign law firms or foreign lawyers cannot

practice the profession of law in India either on the

litigation or non-litigation side, unless they fulfil the

requirement of the Advocates Act, 1961 and the Bar

Council of India Rules.

(ii) However, there is no bar either in the Act or the

Rules for the foreign law firms or foreign lawyers to

visit India for a temporary period on a “fly in and fly

out” basis, for the purpose of giving legal advise to

their clients in India regarding foreign law or their

own system of law and on diverse international legal

issues.

(iii) Moreover, having regard to the aim and object of

the International Commercial Arbitration introduced

in the Arbitration and Conciliation Act, 1996, 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.

(iv) The B.P.O. Companies providing wide range of

customised and integrated services and functions to

its customers like word-processing, secretarial

support, transcription services, proof-reading

services, travel desk support services, etc. do not

come within the purview of the Advocates Act, 1961

or the Bar Council of India Rules. However, in the

event of any complaint made against these B.P.O.

Companies violating the provisions of the Act, the Bar

Council of India may take appropriate action against

such erring companies.”

2

2010 (2) Mah LJ 726

2

3. The Bombay High Court, on the other hand, concluded as

follows:

“60. For all the aforesaid reasons, we hold that in the

facts of the present case, the RBI was not justified in

granting permission to the foreign law firms to open

liaison offices in India under Section 29 of the 1973

Act. We further hold that the expressions ‘ to practise

the profession of law’ in Section 29 of the 1961 Act is

wide enough to cover the persons practising in

litigious matters as well as persons practising in non

litigious matters and, therefore, to practise in non

litigious matters in India, the respondent Nos. 12 to

14 were bound to follow the provisions contained in

the 1961 Act. The petition is disposed of accordingly

with no order as to costs.”

4. When the matter against the judgment of the Madras

High Court came up for hearing before this Court on 4th July,

2012, following interim order was passed :

“In the meanwhile, it is clarified that Reserve

Bank of India shall not grant any permission to

the foreign law firms to open liaison offices in

India under Section 29 of the Foreign Exchange

Regulation Act, 1973. It is also clarified that the

expression “to practice the profession of law”

under Section 29 of the Advocates Act, 1961

covers the persons practicing litigious matters as

well as non-litigious matters other than

contemplated in para 63(ii) of the impugned

order and, therefore, to practice in non-litigious

matters in India the foreign law firms, by

whatever name called or described, shall be

bound to follow the provisions contained in the

Advocates Act, 1961.”

The said order has thereafter continued and is still in force.

3

5. In Civil Appeal Nos.7875-7879 of 2015, writ petition was

filed before the Madras High Court by one A.K. Balaji,

Advocate. Apart from official respondents, 32 law firms of

U.K., U.S.A., France and Australia have been impleaded as

respondents 9 to 40. Prayer in the writ petition is to take

action against the original respondents 9 to 40 or any other

foreign law firms or foreign lawyers illegally practicing the

profession of law in India and direct them to refrain from

having any illegal practice on the litigation side and in the

field of commercial transactions in any manner whatsoever.

PLEADINGS

6. Averments in the petition are that the writ petitioner was

an advocate enrolled with the Bar Council of Tamil Nadu. To

practice law in India, a person has to be Indian citizen and

should possess degree in law from a recognized University in

India. Nationals of other countries could be admitted as

advocates in India only if citizens of India are permitted to

practice in such other countries. Foreign degree of law from a

University outside India requires recognition by the Bar

Council of India. The Indian advocates are not allowed to

practice in U.K., U.S.A., Australia and other foreign nations

except on fulfilling onerous restrictions like qualifying tests,

4

experience, work permit. Foreign lawyers cannot be allowed

to practice in India without reciprocity.

7. Under the Advocates Act (the Act), a foreigner is not

entitled to practice in India in view of bar contained in Section

29. However, under the guise of LPOs (Legal Process

Outsourcing), conducting seminars and arbitrations, foreign

lawyers are visiting India on Visitor Visa and practicing

illegally. They also violate tax and immigration laws. They

have also opened their offices in India for practice in the fields

of mergers, take-overs, acquisitions, amalgamations, etc.

Disciplinary jurisdiction of the Bar Council extends only to

advocates enrolled under the Act. In India, the legal

profession is considered as a noble profession to serve the

society and not treated as a business but the foreign law firms

treat the profession as trade and business venture to earn

money. Indian lawyers are prohibited from advertising,

canvassing and solicit work but foreign law firms are

advertising through websites and canvass and solicit work by

assuring results. Many accountancy and management firms

are also employing graduates and thus rendering legal

services.

8. The stand of the Union of India initially was that if

foreign law firms are not allowed to take part in negotiations,

5

settling of documents and arbitrations in India, it will obstruct

the aim of making India a hub of international arbitration.

Many arbitrations with Indian Judges as arbitrators and Indian

lawyers are held outside India where foreign and Indian law

firms advise their clients. Barring the entry of foreign law

firms for arbitrations in India will result in many arbitrations

shifting to Singapore, Paris and London, contrary to the

declared policy of the Government and against national

interest. However, its final stand in affidavits dated 19th April,

2011 and 17th November, 2011 was different as recorded in

Para 3 of the High Court Judgment as follows :

“3 . The first respondent Union of India filed four

counter affidavits on 19.08.2010, 24.11.2010,

19.04.2011 and 17.11.2011. In one of the counter

affidavits, it is stated that the Bar Council of India,

which has been established under the Advocates Act,

1961, regulates the advocates who are on the

“Rolls”, but law firms as such are not required to

register themselves before any statutory authority,

nor do they require any permission to engage in nonlitigation

practice. Exploiting this loophole, many

accountancy and management firms are employing

law graduates who are rendering legal services,

which is contrary to the provisions of the Advocates

Act. It is stated that the Government of India along

with the Bar Council of India is considering this issue

and is trying to formulate a regulatory framework in

this regard. The 1

st

respondent in his counter warns

that if the foreign law firms are not allowed to take

part in negotiations, settling up documents and

arbitrations in India, it will have a counter productive

effect on the aim of the government to make India a

hub of International Arbitration. In this connection, it

is stated that many arbitrations with Indian Judges

and Lawyers as Arbitrators are held outside India,

where both foreign and Indian Law Firms advise their

clients. If foreign law firms are denied entry to deal

6

with arbitrations in India, then India will lose many of

the arbitrations to Singapore, Paris and London. It

will be contrary to the declared policy of the

government and against the national interest. In the

counter affidavit filed on 19.04.2011, it is

stated that a proposal to consider an

amendment to Section 29 of the Advocates

Act, 1961 permitting foreign law firms to

practice law in India in non litigious matters on

a reciprocity basis with foreign countries is

under consultation with the Bar Council of

India. Finally, in the counter filed on

17.11.2011, it is stated that the Government of

India has decided to support the stand of the

Bar Council of India that the provisions of the

Advocates Act, 1961 would apply with equal

force to both litigious and non-litigious

practice of law, and it is only persons enrolled

under Section 24 of the Act, who can practice

before the Indian Courts.”

(emphasis added)

9. In this Court, stand of the Union of India is that

presently it is waiting for the Bar Council of India to frame

rules on the subject. However, it can frame rules under

Section 49A at any stage.

10. Stand of the Bar Council of India before the High Court

is that even non litigious practice is included in the practice

of law which can be done only by advocates enrolled under

the Act. Reliance was placed on the judgment of the Bombay

High Court in Lawyers Collective (supra). Further

reference was made to Sections 24 and 29 of the Act.

Section 47(2) read with Section 49(1)(e) provides for

7

recognition of qualifications of foreigners being recognized

for practice. It was submitted that practice of foreign lawyers

in India should be subject to regulatory powers of the Bar

Council.

11. Stand of the foreign law firms, inter alia, is that there is

no bar to a company carrying on consultancy/support

services in the field of protection and management of

intellectual, business and industrial proprietary rights,

carrying out market service and market research, publication

of reports, journals etc. A person not appearing before

Courts or Tribunals and not giving legal advice cannot be said

to be practice of law. The ninth respondent stated that it was

a part of group of companies and not a law firm and was duly

registered under the Indian Companies Act, 1956. The tenth

respondent, another foreign law firm, submitted that there is

no violation of law in giving advice on foreign law. Even

Indian lawyers are permitted to practice outside India and

issue of reciprocity is a policy matter to be decided by the

Government of India. It does not have a law office in India

and does not give advice on Indian laws. In England, foreign

lawyers are free to advice on their own system of law without

nationality requirement or qualification of England. The

8

eleventh respondent is an American law firm and submitted

that it advises clients on international legal issues from

different countries. Indian clients are given advice through

Indian lawyers and law firms which are enrolled with the Bar

Council. There is no discrimination in U.S. against Indian

citizens practicing law. Indian lawyers travel to US on

temporary basis for consultation on Indian law issues.

12. The Act and the Bar Council Rules govern practice of

Indian law and not foreign law. Participation in seminars and

conferences does not constitute practice in law. The

fourteenth respondent denied the existence of its office in

India and that it was practicing Indian law. It also took the

same stand as Respondent No.11 that regulatory framework

for advocates did not govern practice of foreign law. It

denied that it is operating a Legal Process Outsourcing office

(LPOs) in India. Its lawyers fly in and fly out of India on need

basis to advice clients on international transactions. To the

extent Indian law is involved, such matters are addressed by

Indian lawyers. If the foreign law firms are prevented from

advice on foreign law, the transaction cost of Indian clients

for consultation on foreign law will increase. Other foreign

law firms have also taken more or less similar stand.

9

Fifteenth respondent stated that it is a Business Process

Outsourcing (BPO) company providing wide range of

customized and integrated services and functions. The

sixteenth respondent also stated that it has no office in India

and is only rendering services other than practice of Indian

law. The eighteenth respondent stated that it does not have

any office in India and does not practice law in India. It only

advises on non Indian law. Respondent Nos.19, 26, 39 and

40 stated that they are limited law partnerships under Laws

of England. They do not have any law office in India.

Respondents Nos.20, 21, 24, 25, 27, 28, 30, 31, 32, 33, 34

and 38 also stated that they do not have any office in India

and do not practice Indian law. Indian lawyers cannot advice

on foreign laws and the requirement of Indian litigants in

regard is met by foreign lawyers. Its lawyers fly in and fly out

of India on need basis to advise the clients on international

transactions. To the extent Indian law is involved such

matters are addressed by Indian lawyers.

13. The respondent No.22 stated that it is an international

law firm but does not have any office in India. It advises

clients on laws other than Indian laws. Its India Practice

Group advises clients on commercial matters involving an

10

“Indian Element” relating to mergers, acquisitions, capital

markets, projects, energy and infrastructure, etc. from an

international legal perspective and it does not amount to

practice in Indian law. Respondent No.23 stated that it is

only advising on matters of English, European Union and

Hong Kong laws. It has working relationships with leading law

firms in major jurisdictions and instructs appropriate local law

firms to provide local law advice. Respondent No.29 stated

that it is a limited law partnership registered in England and

Wales and does not have office in India. It does not

represent parties in Indian courts nor advises on Indian law.

Respondent No.35 stated that it does not maintain any office

in India and its expertise in international law. 36th

Respondent stated that it does not practice Indian law and

has no office in India nor it operates any LPO. Its lawyers fly

in and fly out on need basis to advise clients on international

transactions or matters involving Australian laws or

international Benches to which there is an Indian component.

Working of Indian laws is entrusted to Indian lawyers. The

37th Respondent denied that it has any office in India or is

running LPO in India. It only advises with respect to

regulatory laws other than Indian law.

11

FINDINGS

14. The High Court upheld the plea of the foreign law firms

to the effect that there was no bar to such firms taking part

in negotiations, settling of documents and conducting

arbitrations in India. There was no bar to carrying on

consultancy/support services in the field of protection and

management of intellectual, business and industrial

proprietary rights, carrying out market survey and research,

publication of reports, journals etc. without rendering any

legal advice. This could not be treated as practice of law in

India. Referring to Section 2(1)(f) of the Arbitration and

Conciliation Act, 1996 (the Arbitration Act), it was observed

that if in international commercial arbitration, India is chosen

as the seat of arbitration, the foreign contracting party is

bound to seek assistance from lawyers of their own country

on the contract. There could be no prohibition for such

foreign lawyers to advise their clients on the foreign law.

15. Judgment of the Bombay High Court in Lawyers

Collective (supra) was distinguished on the ground that

setting up of law offices for litigious and non litigious matters

was different but if a foreign law firm without establishing

12

any liaison office in India offers advice to their clients on

foreign law, there was no legal bar to do so.

16. The Bombay High Court in its judgment observed:

“44. It appears that before approaching RBI, these

foreign law firms had approached the Foreign

Investment Promotion Board (FIPB for short) a High

Powered body established under the New Industrial

Policy seeking their approval in the matter. The FIPB

had rejected the proposal submitted by the foreign

law firms. Thereafter, these law firms sought

approval from RBI and RBI granted the approval in

spite of the rejection of FIPB. Though specific

grievance to that effect is made in the petition, the

RBI has chosen not to deal with those grievances in

its affidavit in reply. Thus, in the present case,

apparently, the stand taken by RBI & FIPB are

mutually contradictory.

45. In any event, the fundamental question to be

considered herein is, whether the foreign law firms

namely respondent Nos. 12 to 14 by opening liaison

offices in India could carry on the practise in non

litigious matters without being enrolled as Advocates

under the 1961 Act ?

46. Before dealing with the rival contentions on the

above question, we may quote Sections 29, 30, 33

and 35 of the 1961 Act, which read thus:

29. Advocates to be the only recognised

class of persons entitled to practice law. –

Subject to the provisions of this Act and any

rules made there under, there shall, as from

the appointed day, be only one class of

persons entitled to practise the profession

of law, namely, advocates. (not brought into

force so far)

30. Right of advocates to practise. -Subject

to provisions of this Act, every advocate

whose name is entered in the State roll shall

be entitled as of right to practise throughout

the territories to which this Act extends,

13

(i) in all Courts including the Supreme

Court;

(ii) before any tribunal or person

legally authorized to take evidence;

(iii) before any other authority or

person before whom such advocate

by or under any law for the time being

in force entitled to practise.

33 . Advocates alone entitled to practise.

-Except as otherwise provided in this Act or

in any other law for the time being in force,

no person shall, on or after the appointed

day, be entitled to practice in any Court or

before any authority or person unless he is

enrolled as an advocate under this Act.

35 . Punishment of advocates for

misconduct – (1) Where on receipt of a

complaint or otherwise a State Bar Council

has reason to believe that any advocate on

its roll has been guilty of professional or

other misconduct, it shall refer the case for

disposal to its disciplinary committee.

(1-A) The State Bar Council may, either of

its own motion or on application made to it

by any person interested, withdraw a

proceeding pending before its disciplinary

committee and direct the inquiry to be

made by any other disciplinary committee

of that State Bar Council.

(2) The disciplinary committee of a State

Bar Council [***] shall fix a date for the

hearing of the case and shall cause a notice

thereof to be given to the advocate

concerned and to the Advocate-General of

the State.

(3) The disciplinary committee of a State

Bar Council after giving the advocate

concerned and the Advocate-General an

opportunity of being heard, may make any

of the following orders, namely:

14

(a) dismiss the complaint or, where

the proceedings were initiated at the

instance of the State Bar Council,

direct that the proceedings be filed;

(b) reprimand the advocate;

(c) suspend the advocate from

practice or such period as it may

deem fit;

(d) remove the name of the advocate

from the State roll of advocates.

(4) Where an advocate is suspended from

practice under Clause (c) of Sub-section (3),

he shall, during the period of suspension, be

debarred from practising in any Court or

before any authority or person in India.

(5) Where any notice is issued to the

Advocate-General under Subsection (2), the

Advocate-General may appear before the

disciplinary committee of the State Bar

Council either in person or through any

advocate appearing on his behalf.

Explanation-In this section, (Section 37 and

Section 38), the expressions “AdvocateGeneral”

and “Advocate-General of the

State” shall, in relation to the Union territory

of Delhi, mean the Additional Solicitor

General of India.

47 . The argument of the foreign law firms is that

Section 29 of the 1961 Act is declaratory in nature

and the said section merely specifies the persons

who are entitled to practise the profession of law.

According to the respondent Nos. 12 to 14, the

expression ‘entitled to practise the profession of law’

in Section 29 of the 1961 Act does not specify the

field in which the profession of law could be

practised. It is Section 33 of the 1961 Act which

provides that advocates alone are entitled to practise

in any Court or before any authority or person.

Therefore, according to respondent Nos. 12 to 14 the

1961 Act applies to persons practising as advocates

before any Court / authority and not to persons

practising in non litigious matters. The question,

therefore, to be considered is, whether the 1961 Act

15

applies only to persons practising in litigious matters,

that is, practising before Court and other

authorities ?

48. In the statements of Objects & Reasons for

enacting the 1961 Act, it is stated that the

main object of the Act is to establish All India

Bar Council and a common roll of advocates

and Advocate on the common roll having a

right to practise in any part of the country and

in any Court, including the Supreme Court.

Thus, from the Statement of Objects and

Reasons, it is seen that the 1961 Act is

intended to apply to (one) persons practising

the profession of law in any part of the country

and (two) persons practising the profession of

law in any Court including the Supreme Court.

Thus, from the statement of objects and

reasons it is evident that the 1961 Act is

intended to apply not only to the persons

practising before the Courts but it is also

intended to apply to persons who are

practising in non litigious matters outside the

Court.

49. Apart from the above, Section 29 of the

1961 Act specifically provides is that from the

appointed day, there shall be only one class of

persons entitled to practice the profession of

law, namely Advocates. It is apparent that

prior to the 1961 Act there were different

classes of persons entitled to practise the

profession of law and from the appointed day

all these class of persons practising the

profession of law, would form one class,

namely, advocates. Thus, Section 29 of the

1961 Act clearly provides that from the

appointed day only advocates are entitled to

practise the profession of law whether before

any Court / authority or outside the Court by

way of practise in non litigious matters.

50. Section 33 of the 1961 Act is a prohibitory

section in the sense that it debars any person

from appearing before any Court or authority

unless he is enrolled as an advocate under the

1961 Act. The bar contained in Section 33 of

the 1961 Act has nothing to do with the

persons entitled to be enrolled as advocates

16

under Section 29 of the 1961 Act. A person

enrolled as an advocate under Section 29 of

the 1961 Act, may or may not be desirous of

appearing before the Courts. He may be

interested in practising only in non litigious

matters. Therefore, the bar under Section 33

from appearing in any Court (except when

permitted by Court under Section 32 of the

1961 Act or any other Act) unless enrolled as

an advocate does not bar a person from being

enrolled as an advocate under Section 29 of

the 1961 Act for practising the profession of

law in non litigious matters. The Apex Court in

the case of Ex-Capt. Harish Uppal (supra) has

held that the right to practise is the genus of

which the right to appear and conduct cases in

the Court may be a specie. Therefore, the fact

that Section 33 of the 1961 Act provides that

advocates alone are entitled to practice before

any Court / authority it cannot be inferred that

the 1961 Act applies only to persons practising

in litigious matters and would not apply to

person practising in non litigious matters.

51. It was contended that the 1961 Act does

not contain any penal provisions for breaches

committed by a person practicing in nonlitigious

matter and, therefore, the 1961 Act

cannot apply to persons practising in nonlitigious

matters. There is no merit in this

contention, because, Section 35 of the 1961

Act provides punishment to an advocate who is

found to be guilty of professional or other

misconduct. The fact that Section 45 of the

1961 Act provides imprisonment for persons

illegally practicing in Courts and before other

authorities, it cannot be said that the 1961 Act

does not contain provisions to deal with the

persons found guilty of misconduct while

practising in non litigious matters. Once it is

held that the persons entitled to practice the

profession of law under the 1961 Act covers

the persons practising the profession of law in

litigious matters as well as non-litigious

matters, then, the penal provisions contained

in Section 35 of the 1961 Act would apply not

only to persons practising in litigious matter,

but would also apply to persons practising the

profession of law in non-litigious matters. The

17

very object of the 1961 Act and the Rules

framed by the Bar Council of India are to

ensure that the persons practising the

profession of law whether in litigious matters

or in non litigious matters, maintain high

standards in professional conduct and

etiquette and, therefore, it cannot be said that

the persons practising in non litigious matters

are not governed by the 1961 Act.

52 . Strong reliance was placed by the counsel

for the respondent No. 12 on the decision of

the Apex Court in the case of O.N. Mohindroo

(supra) in support of his contention that the

1961 Act applies only to persons practising the

profession of law before Courts / Tribunals /

other authorities. It is true that the Apex Court

in the above case has held that the 1961 Act is

enacted by the Parliament in exercise of its

powers under entry 77 and 78 in List I of the

Seventh Schedule to the Constitution.

However, the fact that entry 77 and 78 in List I

refers to the persons practising before the

Supreme Court and the High Courts, it cannot

be said that the 1961 Act is restricted to the

persons practising only before the Supreme

Court and High Courts. Practising the

profession of law involves a larger concept

whereas, practising before the Courts is only a

part of that concept. If the literal construction

put forth by the respondents is accepted then,

the Parliament under entry 77 & 78 in List I of

the Seventh Schedule to make legislation only

in respect of the advocates practicing before

the Supreme Court / High Courts and the

Parliament cannot legislate under that entry in

respect of advocates practising before the

District Courts/ Magistrate’s Courts / other

Courts / Tribunals / authorities and

consequently, the 1961 Act to the extent it

applies to advocates practising in Courts other

than the High Courts and Supreme Court would

be ultra vires the Constitution. Such a narrow

construction is unwarranted because, once the

Parliament invokes its power to legislate on

advocates practising the profession of law,

then the entire field relating to advocates

would be open to the Parliament to legislate

and accordingly the 1961 Act has been enacted

18

to cover the entire field. In any event, the

question as to whether the persons practicing

the profession of law exclusively in nonlitigious

matters are covered under the 1961

Act, or not was not an issue directly or

indirectly considered by the Apex Court in the

case of O.N. Mohindroo (supra). Therefore, the

decision of the Apex Court in the above case

does not support the case of the contesting

respondents.

……..

……..

55. It was contended by the counsel for Union

of India that if it is held that the 1961 Act

applies to persons practising in non-litigious

matters, then no bureaucrat would be able to

draft or give any opinion in non-litigious

matters without being enrolled as an advocate.

There is no merit in the above argument,

because, there is a distinction between a

bureaucrat drafting or giving opinion, during

the course of his employment and a law firm or

an advocate drafting or giving opinion to the

clients on professional basis. Moreover, a

bureaucrat drafting documents or giving

opinion is answerable to his superiors,

whereas, a law firm or an individual engaged in

non litigious matters, that is, drafting

documents / giving opinion or rendering any

other legal assistance are answerable to none.

To avoid such anomaly, the 1961 Act has been

enacted so as to cover all persons practising

the profession of law be it in litigious matters

or in non-litigious matters within the purview

of the 1961 Act.

56. The argument that the 1961 Act and the Bar

Councils constituted there under have limited role to

play has been time and again negatived by the Apex

Court. Recently, the Apex Court in the case of Bar

Council of India v. Board of Management, Dayanand

College of Law reported in MANU/SC/5219/2006 :

(2007) 2 SCC 202 held thus:

It may not be correct to say that the Bar

Council of India is totally unconcerned with

the legal education, though primarily legal

education may also be within the province

19

of the universities. But, as the apex

professional body, the Bar Council of India is

concerned with the standards of the legal

profession and the equipment of those who

seek entry into that profession. The Bar

Council of India is also thus concerned with

the legal education in the country.

Therefore, instead of taking a pendantic

view of the situation, the State Government

and the recommending authority are

expected to ensure that the requirement set

down by the Bar Council of India is also

complied with.

Thus, when efforts are being made to see

that the legal profession stand tall in this

fast changing world, it would be improper to

hold that the 1961 Act and the Bar Council

constituted there under have limited role to

play in the field relating to practising the

profession of law.

57. It is not in dispute that once a person is

enrolled as an advocate, he is entitled to

practise the profession of law in litigious

matters as well as non-litigious matters. If the

argument of the respondents that the 1961 Act

is restricted to the persons practising the

profession of law in litigious matters is

accepted, then an advocate found guilty of

misconduct in performing his duties while

practising in non-litigious matters cannot be

punished under the 1961 Act. Similarly, where

an advocate who is debarred for professional

misconduct can merrily carry on the practise in

nonlitigious matters on the ground that the

1961 Act is not applicable to the persons

practising the profession of law in non litigious

matters. Such an argument which defeats the

object of the 1961 Act cannot be accepted.

58. It may be noted that Rule 6(1) in Chapter

III Part VI of the Bar Council of India Rules

framed under Section 49(1) (ah) of the 1961

Act provides that an advocate whose name has

been removed by an order of the Supreme

Court or a High Court or the Bar Council as the

case may be, shall not be entitled to practise

the profession of law either before the Court

20

and authorities mentioned under Section 30 of

the 1961 Act, or in chambers, or otherwise.

The above rule clearly shows that the chamber

practise, namely, practise in non litigious

matters is also within the purview of the 1961

Act.

59 . Counsel for the Union of India had argued that

the Central Government is actively considering the

issue relating to the foreign law firms practising the

profession of law in India. Since the said issue is

pending before the Central Government for more

than 15 years, we direct the Central Government to

take appropriate decision in the matter as

expeditiously as possible. Till then, the 1961 Act as

enacted would prevail, that is, the persons practising

the profession of law whether in litigious matters or

non litigious matters would be governed by the 1961

Act and the Bar Councils framed there under, apart

from the powers of the Court to take appropriate

action against advocates who are found guilty of

professional misconduct.

60. For all the aforesaid reasons, we hold that in the

facts of the present case, the RBI was not justified in

granting permission to the foreign law firms to open

liaison offices in India under Section 29 of the 1973

Act. We further hold that the expressions ‘ to practise

the profession of law’ in Section 29 of the 1961 Act is

wide enough to cover the persons practising in

litigious matters as well as persons practising in non

litigious matters and, therefore, to practise in non

litigious matters in India, the respondent Nos. 12 to

14 were bound to follow the provisions contained in

the 1961 Act. The petition is disposed of accordingly

with no order as to costs.”

17. The Madras High Court agreed with the above view as follows :

“44. As noticed above, the facts of the case before

the Bombay High Court were that the respondents

which were foreign law firms practising the

profession of law in US/UK sought permission to open

their liaison office in India and render legal

assistance to another person in all litigious and nonlitigious

matters. The Bombay High Court, therefore,

rightly held that establishing liaison office in India by

the foreign law firm and rendering liaisoning

21

activities in all forms cannot be permitted since such

activities are opposed to the provisions of the

Advocates Act and the Bar Council of India Rules. We

do not differ from the view taken by the

Bombay High Court on this aspect.”

18. The Madras High Court after above observation proceeded to

consider the matter as follows:

“45 . However, the issue which falls for

consideration before this Court is as to whether a

foreign law firm, without establishing any liaison

office in India visiting India for the purpose of offering

legal advice to their clients in India on foreign law, is

prohibited under the provisions of the Advocates Act.

In other words, the question here is, whether a

foreign lawyer visiting India for a temporary period to

advise his client on foreign law can be barred under

the provisions of the Advocates Act. This issue was

neither raised nor answered by the Bombay High

Court in the aforesaid judgment.”

19. It was held :

“51. We find force in the submission made by the

learned counsel appearing for the foreign law firms

that if foreign law firms are not allowed to take part

in negotiations, for settling up documents and

conduct arbitrations in India, it will have a counter

productive effect on the aim of the Government to

make India a hub of International Arbitration.

According to the learned counsel, many arbitrations

with Indian Judges and Lawyers as Arbitrators are

held outside India, where both foreign and Indian law

firms advise their clients. If foreign law firms are

denied entry to deal with arbitrations in India, then

India will lose many of the arbitrations to foreign

countries. It will be contrary to the declared policy of

the Government and against the national interest.

Some of the companies have been carrying on

consultancy/support services in the field of

protection and management of intellectual, business

and industrial proprietary rights, carrying out market

surveys and market research and publication of

22

reports, journals, etc. without rendering any legal

service, including advice in the form of opinion, but

they do not appear before any courts or tribunals

anywhere in India. Such activities cannot at all be

considered as practising law in India. It has not been

controverted that in England, foreign lawyers are

free to advice on their own system of law or on

English Law or any other system of law without any

nationality requirement or need to be qualified in

England.

52. Before enacting the Arbitration and Conciliation

Act, 1996 the Law Commission of India, several

representative bodies of trade and industry and

experts in the field of arbitration have proposed

amendments to the Act to make it more responsive

to contemporary requirements. It was also

recognised that the economic reforms in India may

not fully become effective if the law dealing with

settlement of both domestic and international

commercial disputes remains out of tune with such

reforms. The United Nations Commission on

International Trade Law (UNCITRAL) adopted in 1985

the Model Law on International Commercial

Arbitration. The Arbitration and Conciliation Act is,

therefore, consolidated and amended to the law

relating to domestic and international commercial

arbitration as well as for the enforcement of foreign

arbitral award. The Act was enacted as a measure of

fulfilling India’s obligations under the International

Treaties and Conventions. On account of the growth

in the international trade and commerce and also on

account of long delays occurring in the disposal of

suits and appeals in courts, there has been

tremendous movement towards the resolution of

disputes through alternative forum of arbitrators.

53. Section 2(1)(f) of the Act defines the term

“International Commercial Arbitration” as under:-

(f) International Commercial Arbitration means

an arbitration relating to disputes arising

out of legal relationships, whether

contractual or not, considered as

commercial under the law in force in India

and where at least one of the parties is

(i) an individual who is a national of, or

habitually resident in, any country other

than India; or

23

(ii) a body corporate which is incorporated in

any country other than India; or

(iii) a company or an association or a body of

individuals whose central management

and control is exercised in any country

other than India; or

(iv) the Government of a foreign country.

54 . From the above definition, it is manifestly clear

that any arbitration matter between the parties to

the arbitration agreement shall be called an

“international commercial arbitration” if the matter

relates to the disputes, which may or may not be

contractual, but where at least one of the parties

habitually resides abroad whether a national of that

country or not. The New York Convention will apply to

an arbitration agreement if it has a foreign element

or flavour involving international trade and

commerce, even though such an agreement does

not lead to a foreign award.

55 . International arbitration is growing big time in

India and in almost all the countries across the globe.

India is a signatory to the World Trade Agreement,

which has opened up the gates for many

international business establishments based in

different parts of the world to come and set up their

respective businesses in India.

56 . Large number of Indian Companies have been

reaching out to foreign destinations by mergers,

acquisition or direct investments. As per the data

released by the Reserve Bank of India during 2009,

the total out ward investment from India excluding

that which was made by Banks, had increased 29.6%

to U.S. Dollar 17.4 billion in 2007-08 and India is

ranked third in global foreign direct investment.

Overseas investments in joint ventures and wholly

owned subsidiaries have been recognized as

important avenues by Indian Entrepreneurs in terms

of foreign exchange earning like dividend, loyalty,

etc. India is the 7th largest, the second most

populated country and the fourth largest economy in

the world. Various economic reforms brought about

have made India grow rapidly in the Asia-Pacific

Region, and the Indian Private Sector has offered

considerable scope for foreign direct investment,

joint-venture and collaborations. Undoubtedly, these

cross-border transactions and investments would

24

give bigger opportunities for members of the legal

fraternity, in order to better equip themselves to face

the challenges. It is common knowledge that in the

recent past, parties conducting International

Commercial Arbitrations have chosen India as their

destination. The arbitration law in India is modelled

on the lines of the UNCITRAL Model Law of

Arbitration and makes a few departures from the

principles enshrined therein. The Arbitration and

Conciliation Act 1996, provides for international

commercial arbitration where at least one of the

parties is not an Indian National or Body corporate

incorporated in India or a foreign Government.

57. Institutional Arbitration has been defined to be

an arbitration conducted by an arbitral institution in

accordance with the rules of the institution. The

Indian Council of Arbitration is one such body. It is

reported that in several cases of International

Commercial Arbitration, foreign contracting party

prefers to arbitrate in India and several reasons have

been stated to choose India as the seat of

arbitration. Therefore, when there is liberalization of

economic policies, throwing the doors open to

foreign investments, it cannot be denied that

disputes and differences are bound to arise in such

International contracts. When one of the contracting

party is a foreign entity and there is a binding

arbitration agreement between the parties and India

is chosen as the seat of arbitration, it is but natural

that the foreign contracting party would seek the

assistance of their own solicitors or lawyers to advice

them on the impact of the laws of their country on

the said contract, and they may accompany their

clients to visit India for the purpose of the

Arbitration. Therefore, if a party to an International

Commercial Arbitration engages a foreign lawyer and

if such lawyers come to India to advice their clients

on the foreign law, we see there could be no

prohibition for such foreign lawyers to advise their

clients on foreign law in India in the course of a

International Commercial transaction or an

International Commercial Arbitration or matters akin

thereto. Therefore, to advocate a proposition that

foreign lawyers or foreign law firms cannot come into

India to advice their clients on foreign law would be a

far fetched and dangerous proposition and in our

opinion, would be to take a step backward, when

India is becoming a preferred seat for arbitration in

25

International Commercial Arbitrations. It cannot be

denied that we have a comprehensive and

progressive legal frame work to support International

Arbitration and the 1996 Act, provides for maximum

judicial support of arbitration and minimal

intervention. That apart, it is not in all cases, a

foreign company conducting an International

Commercial Arbitration in India would solicit the

assistance of their foreign lawyers. The legal

expertise available in India is of International

standard and such foreign companies would not

hesitate to avail the services of Indian lawyers.

Therefore, the need to make India as a preferred seat

for International Commercial Arbitration would

benefit the economy of the country.

58. The Supreme Court in a recent decision in

Vodafone International Holdings B.V. vs. Union of

India and another, SLP(C) No.26529 of 2010, dated

20.01.2012, observed that every strategic foreign

direct investment coming to India, as an investment

destination should be seen in a holistic manner. The

Supreme Court observed that the question involved

in the said case was of considerable public

importance, especially on Foreign Direct Investment,

which is indispensable for a growing economy like

India. Therefore, we should not lose site of the fact

that in the overall economic growth of the country,

International Commercial Arbitration would play a

vital part. The learned counsel appearing for the

foreign law firms have taken a definite stand that the

clients whom they represent do not have offices in

India, they do not advise their foreign clients on

matters concerning Indian Law, but they fly in and fly

out of India, only to advise and hand-hold their

clients on foreign laws. The foreign law firms, who

are the private respondents in this writ petition, have

accepted the legal position that the term “practice”

would include both litigation as well as non-litigation

work, which is better known as chamber practice.

Therefore, rendering advice to a client would also be

encompassed in the term “practice”.

59. As noticed above, Section 2(a) of the Advocates

Act defines ‘Advocate’ to mean an advocate entered

in any roll under the provisions of the Act. In terms of

Section 17(1) of the Act, every State Bar Council

shall prepare and maintain a roll of Advocates, in

which shall be entered the names and addresses of

26

(a) all persons who were entered as an Advocate on

the roll of any High Court under the Indian Bar

Council Act, 1926, immediately before the appointed

date and (b) all other persons admitted to be

Advocates on the roll of the State Bar Council under

the Act on or after the appointed date. In terms of

Section 24(1) of the Act, subject to the provisions of

the Act and the Rules made thereunder, a person

shall be qualified to be admitted as an advocate on a

state roll if he fulfils the conditions (a) a citizen of

India, (b) has completed 21 years of age and (c)

obtained a degree in Law. The proviso to Section

24(1)(a) states that subject to the other provisions of

the Act, a National of any other country may be

admitted as an Advocate on a State roll, if a citizen

of India, duly qualified is permitted to practice law in

that other country. In terms of Section 47(1) of the

Act, where any country specified by the Central

Government by notification prevents citizens of India

practicing the profession of Law or subjects them to

unfair discrimination in that country, no subject of

any such country shall be entitled to practice the

profession of Law in India. In terms of Sub-Section (2)

of Section 47, subject to the provision of Sub-Section

(1), the Bar Council of India may prescribe

conditions, if any, subject to which foreign

qualifications in law obtained by persons other than

citizens of India shall be recognized for the purpose

of admission as an Advocate under the Act. Thus,

Section 47 deals with reciprocity. As per the

statement of objects and reasons of the Advocates

Act, it was a law enacted to provide one class of

legal practitioners, specifying the academic and

professional qualifications necessary for enrolling as

a practitioner of Indian Law, and only Indian citizens

with a Law Degree from a recognized Indian

University could enrol as Advocates under the Act.

The exceptions are provided under the proviso to

Section 24(1)(a), Section 24(1)(c)(iv) and Section

47(2). In the light of the scheme of the Act, if a

lawyer from a foreign law firm visits India to advice

his client on matters relating to the law which is

applicable to their country, for which purpose he

“flies in and flies out” of India, there could not be a

bar for such services rendered by such foreign law

firm/foreign lawyer.

60 . We are persuaded to observe so, since there

may be several transactions in which an Indian

27

company or a person of Indian origin may enter into

transaction with a foreign company, and the laws

applicable to such transaction are the laws of the

said foreign country. There may be a necessity to

seek legal advice on the manner in which the foreign

law would be applied to the said transaction, for

which purpose if a lawyer from a foreign law firm is

permitted to fly into India and fly out advising their

client on the foreign law, it cannot be stated to be

prohibited. The corollary would be that such foreign

law firm shall not be entitled to do any form of

practice of Indian Law either directly or indirectly.

The private respondents herein, namely the foreign

law firms, have accepted that there is express

prohibition for a foreign lawyer or a foreign law firm

to practice Indian Law. It is pointed out that if an

interpretation is given to prohibit practice of foreign

law by a foreign law firms within India, it would result

in a manifestly absurd situation wherein only Indian

citizens with Indian Law degree who are enrolled as

an advocate under the Advocates Act could practice

foreign law, when the fact remains that foreign laws

are not taught at graduate level in Indian Law

schools, except Comparative Law Degree Courses at

the Master’s level.

61 . As noticed above, the Government of India, in

their counter affidavit dated 19.08.2010, have stated

that the contention raised by the petitioner that

foreign law firms should not be allowed to take part

in negotiating settlements, settling up documents

and arbitrations will be counter productive, as

International Arbitration will be confined to a single

country. It is further pointed out that many

arbitrations are held outside India with Indian Judges

and Lawyers as Arbitrators where both foreign and

Indian Law firms advise their clients. It has been

further stated if foreign law firms are denied

permission to deal with arbitration in India, then we

would lose many arbitrations to other countries and

this is contrary to the declared policy of the

Government and will be against the National interest,

especially when the Government wants India to be a

hub of International Arbitration

62 . At this juncture, it is necessary to note yet

another submission made by the Government of

India in their counter. It has been stated that law

firms as such or not required to register themselves

28

or require permission to engage in non-litigation

practice and that Indian law firms elsewhere are

operating in a free environment without any curbs or

regulations. It is further submitted that the oversight

of the Bar Council on non-litigation activities of such

law firms was virtually nil till now, and exploiting this

loop hole, many accountancy and management firms

are employing law graduates, who are rendering

legal services, which is contrary to the Advocates

Act. Therefore, the concern of the Government of

India as expressed in the counter affidavit requires to

be addressed by the Bar Council of India. Further, it

is seen that the Government in consultation with the

Bar Council of India proposes to commission a study

as to the nature of activities of LPOs, and an

appropriate decision would be taken in consultation

with the Bar Council of India.”

RIVAL CONTENTIONS

20. Shri C.U. Singh, learned senior counsel for the Bar Council of

India submitted that Advocates enrolled with the Bar Council of India

are the only recognized class of persons entitled to practice law in

India. Unless any other law so permits, no person can practice

before any ‘Court, authority or person’ other than an Advocate

enrolled under the Act. In particular cases, the ‘Court, authority or

person’ may permit a person other than an advocate enrolled under

the Act to appear before him. It was submitted that the expression

“practice profession of law” covered not only appearance before the

Court but also opinion work which is also known as chamber

practice. The Ethics prescribed by the Bar Council of India covered

not only conduct in appearing before Court or authority but also in

dealing with the clients including giving legal opinion, drafting or

29

participation in law conference. If a person practices before any

‘Court, authority or person’ illegally, is liable to punishment for

imprisonment which may extend to six months. Thus, the view

taken by the Madras High Court that visit by a foreign lawyer on fly

in and fly out basis to give advice on foreign law or to conduct

arbitration in international commercial arbitrations was erroneous.

Reference has also been made to definition of the term ‘advocate’

under Section 2(a) of the Act. Section 6 lays down functions of the

Bar Council including admission of persons as advocates,

safeguarding rights, privileges and interests of advocates. Section

17 lays down that every State Bar Council shall prepare a roll of

advocates and no person can be enrolled in more than one State Bar

Council. Section 24 lays down qualifications for admission on the

roll of a State Bar council. The qualifications include the citizenship

of India, unless a person is national of a country where citizens of

India are permitted to practice. One is required to have the

prescribed qualification from India or out of India if such degree is

recognized by the Bar Council of India, being a Barrister called to

the Bar before 31st December, 1976, passing of articled clerks

examination or any other examination specified by the Bombay or

Calcutta High Court or obtaining foreign qualification recognized by

the Bar Council of India are also the prescribed qualifications. It was

submitted that even in other jurisdictions, persons other than those

30

enrolled with the concerned Bar Council are not allowed to practice.

Even short term running of legal service is subject to regulatory

regime.

21. Learned counsel for the foreign law firms S/Shri Arvind Datar,

Sajjan Poovayya, Dushyant Dave, learned senior counsel and Mr.

Nakul Dewan, learned counsel supported the direction of the Madras

High Court permitting foreign lawyers to render legal services on fly

in and fly out basis and also with reference to international

commercial arbitrations. It was submitted that Bar Council could

come into picture only in respect of advocates enrolled with it. It is

only with reference to appearance before the Courts or other

authorities or persons that the regulatory regime of the Bar Council

may apply but with regard to non litigation/advisory work even

those not enrolled as advocates under the Advocates Act are not

debarred. It was also submitted by Shri Dewan that Advocates Act

applies only to individuals and not to law firms. Provision for

reciprocity applies only for enrolment under the Advocates Act and

not for casual legal services on fly in and fly out basis or in

connection with international commercial arbitration. Foreign

lawyers are regulated by the disciplinary regime applicable to them

and only their Bar Councils could take action with regard to their

working in India also. Practice of law in India did not cover advising

on foreign law. Thus, if by a pre-determined invitation, a foreign

31

lawyer visited India to advise on a foreign law, there is no bar

against doing so.

22. Certain decisions have been cited at the Bar to which

reference may be made. In Roel versus New York County

Lawyers Association

3

, the Court of Appeals of the State of New

York dealt with a case where a Mexican citizen and lawyer, who was

not a citizen of the United States nor a member of the New York Bar,

maintained his office in New York and advised members of the

public on Mexican law. He did not give any advice as to New York

law. The majority held that this was not permissible. It was

observed:

“To allow a Mexican lawyer to arrange the

institution of divorce proceedings for a New

York resident in a Mexican court, without

allowing him to tell the client that the divorce

might be invalid (Querze v. Querze, 290 N.Y.

13) or that it might adversely affect estate or

other property rights or status in this State

(Matter of Rathscheck, 300 N.Y. 346), is to give

utterly inadequate protection to him (See 70

Harv.L.Rev. 1112-1113). Nor are we in anywise

persuaded by the argument in the brief of the

Association of the Bar that there is any

difference between the right of a Mexican

lawyer to act and advise the public in divorce

matters and the right (3 N.Y.2d 232) of foreign

lawyers generally to act an advise with respect

to foreign law. … …

The complex problem posed by the

activities of foreign attorneys here is a

long-standing one. It may well be that

3

3 N.Y.2d 224 (1957)

32

foreign attorneys should be licensed to

deal with clients in matters exclusively

concerning foreign law, but that is solely

within the province of the Legislature.

Our courts are given much control over

the lawyers admitted to the Bar of our

State; we have no control, however, over

those professing to be foreign law

experts.

We see no substance in appellant’s claim

that section 270 of the Penal Law when

applied to him deprives him of liberty and

property without due process of law, in

that the statute as so construed is

unreasonable and serves no public

purpose.”

23. The minority view, on the other hand, held that:

“In this century when the United States has

become the creditor nation of the world and

when the ramifications of our industrial,

commercial, financial and recreational lives

extend to every corner of the global, it is

especially improbable that the Legislature

intended to preclude the giving of legal advice

in this State to our citizens concerning these

far-flung enterprises by trained lawyers from

abroad who are equipped to give accurate

information and opinions regarding them. The

customary residential requirements for

admission to the Bar would in themselves

often preclude their becoming admitted to our

Bar. … …

The omission of the Legislature to enact

statutes licensing or regulating the conduct of

foreign lawyers in practicing purely foreign law

in this State, does not indicate that such

conduct is prohibited by sections 270 and 271

of the Penal Law, but merely that the

Legislature has not seen fit to subject them to

regulation. Whatever the merits of such

33

proposed legislation, it is not for us to enact it.

If foreign lawyers came under section 270 and

271 of the Penal Law, it would stifle their

activities to the detriment of the large and

increasing number of our nationals who

engage in transactions in foreign countries,

inasmuch as it would be impossible for most of

them to be admitted to practice in this State.”

24. In Appell versus Reiner

4

, the Supreme Court of New Jersey

dealt with a case of New York lawyer, who was not admitted to the

New Jersey Bar, giving legal services to New Jersey residents in a

matter involving the extension of credit and the compromise of

claims held by New York and New Jersey creditors. The Chancery

Division held that the New York lawyer could not advice in respect

of New Jersey creditors. The Supreme Court of New Jersey held:-

“The Chancery Division correctly delineated

the generally controlling principle that legal

services to be furnished to New Jersey

residents relating to New Jersey matters may

be furnished only by New Jersey counsel. We

nevertheless recognize that there are unusual

situations in which a strict adherence to such a

thesis is not in the public interest. In this

connection recognition must be given to the

numerous multi-state transactions arising in

modern times. This is particularly true of our

State, situated as it is in the midst of the

financial and manufacturing center of the

nation. An inflexible observance of the

generally controlling doctrine may well

occasion a result detrimental to the public

interest, and it follows that there may be

instances justifying such exceptional treatment

warranting the ignoring of state lines. This is

such a situation. Under the peculiar facts here

4

43 N.J. 313 (1964); 204 A.2d 146

34

present, having in mind the nature of the

services to be rendered, the inseparability of

the New York and New Jersey transactions, and

the substantial nature of the New York claim,

we conclude that plaintiff’s agreement to

furnish services in New Jersey was not illegal

and contrary to public policy.

It must be remembered that we are not here

concerned with any participated by plaintiff in

a court proceeding. What is involved is the

rendering of advice and assistance in obtaining

extensions of credit and compromises of

indebtedness. … …”

25. Again, there was a dissenting view as follows:

“… …Regulation of the interests of the public

and the bar requires a rule of general

application. In cases such as we have here,

the only fair and workable rule is one which

recognizes that the client’s matter is primarily

a New Jersey one and calls for the engagement

of a member of our bar for the legal services

to be rendered here. And, in that connection,

in the interest of interstate amity, if an out-ofstate

attorney renders legal services in New

Jersey which are a minor or incidental part of a

total problem which has its principal and

primary aspects in his state, he should be

allowed to recover in our courts for the work

done in this jurisdiction.”

26. Mr. Poovayya referred to Rules of the Indian Council of

Arbitration which could apply only if there was an agreement

between the parties that the arbitration was to be in accordance

with the Rules of the Indian Council of Arbitration. Rule 45 laid

down that parties have no right to be represented by lawyers

unless the arbitral tribunal considers it necessary and allows.

35

27. Referring to the Arbitration Act, it was submitted that

international commercial arbitration is defined under Section 2(f)

which covers arbitration relating to disputes where one of the

parties is a national or habitual resident of a country other than

India or a body corporate incorporated outside India or an

association of body of individuals whose management and control is

exercised in a country other than India or a Government of a foreign

country. In such cases, parties may agree to have an arbitrator of

any nationality, to any language to be used in arbitration

proceedings, to any place of arbitration. Section 28(b) permits

Arbitral Tribunal to decide disputes in accordance with rules of law

applicable to the substance of the dispute as agreed by the parties.

The arbitrator has to give equal opportunity to the parties to

present their case (Section 18). Parties can agree on the procedure

to be followed (Section 19). Section 34(2)(a)(iii) provides that an

award may be set aside, inter-alia, on the ground that the party was

unable to present its case in the arbitration proceedings. Procedure

for presenting case of a party before the arbitrator may be

governed by agreement or by the procedural rules.

28. Shri Dushyant Dave referred to rules of certain Arbitration

Institutions to the effect that the parties are free to be represented

by an outside lawyer. It was submitted that by way of Convention

36

in international commercial arbitrations, there cannot be any

compulsion to engage only a local lawyer. Section 48(1)(b) of the

Arbitration Act provides that enforcement of a foreign award can be

refused if the parties were unable to present their case. The New

York Convention Awards are governed by the First Schedule to the

Act. Article-II provides for recognition of an arbitration agreement

between the parties. Article-V(1)(b) provides that if the party

against whom the award is invoked was not given proper notice or

could not present his case, the award cannot be enforced. Section

53 of the Arbitration Act refers to Geneva Convention Awards which

is regulated by the Second Schedule to the Act containing similar

provisions.

29. Mr. Dave submitted that the Special Leave Petition arising out

of the Delhi High Court order is on the question whether London

Court of International Arbitration could use the expression “COURT”

had become infructuous as the respondent had closed its working

in India. He, however, referred the following:

I) Handbook of ICC Arbitration – Commentary,

Precedents, Materials – Second Edition (Michael

W. Buhler and Thomas H. Webster)

Article 21(4): “The parties may appear in person or

through duly authorized representatives. In addition,

they may be assisted by advisers.”

The authors’ comment is as follows:

37

“In an ICC arbitration, parties have the right to

be represented by the persons of their choice. A

distinction should however be made between

“authorized representatives” and “advisors”.

Usually, the parties have attorneys represent

them in the arbitration. Thus, an attorney may

have both capacities, but this may not always be

the case. As an adviser, he or she would not

need a power of attorney. On the other hand, as

a representative of a party, he or she might need

a power of attorney. In arbitration. The major

centres of arbitration do not appear to have

restrictions on the right of lawyers from other

countries to argue cases in those countries, with

the possible exception of California.”

The footnote 31 is as follows:

“See Birbower, Montabano, Condon & Frank, P.C.

v. The Superior Court of Santa Clara, 949 P.2d 1

(Cal. 1998); see also Holtzmann and Donovan,

“United States Country Report” in ICCA

Handbook, Supp. 28 (Paulsson edn, 1999). The

California Rules of Court were modified in 2004

in order to permit any US qualified lawyer to

represent a party in an arbitration (r.966).

However, it remains unclear whether lawyers

admitted to foreign bars can represent parties in

national or international arbitration.”

II) Arbitration of Commercial Disputes –

International and English Law and Practice

(Andrew Tweeddale and Keren Tweeddale).

Representation of the parties

10.15. The right to legal representation at trial

has existed both in the common law and in

international treaties for centuries

5

. However,

5 See, for example, art 42 of the Statute of the International Court of Justice which states: ‘1. The

parties shall be represented by agents. 2. They may have the assistance of counsel or advocates

before the Court. 3. The agents, counsel, and advocates of parties before the Court shall enjoy the

privileges and immunities necessary to the independent exercise of their duties.’ See also art 37 of

the Hague Convention 1899 which states: ‘The parties have the right to appoint delegates or

special agents to attend the Tribunal, for the purpose of serving as intermediaries between them

38

the right to legal representation is not absolute.

The parties may agree to dispense with legal

representation

6

. Furthermore, some rules of

arbitration prohibit the use of legal

representation

7

. In international commercial

arbitrations it is generally accepted that the

parties may choose their own advocate without

necessarily choosing one qualified at the seat of

the arbitration

8

. However, in a few recent cases

that principle has been challenged

9

.”

III) Redfern and Hunter on International Arbitration

“In general, the parties may also be represented

by engineers, or commercial men, for the

purpose of putting forward the oral submissions,

and even for the examination of witnesses. It is

not uncommon, where a case involves technical

issues, for an engineer or other professional man

to be part of the team of advocates representing

a party at a hearing, although it is more usual for

such technical experts to be called as witnesses

and the Tribunal. They are further authorized to retain, for the defense of their rights and interests

before the Tribunal, counsel or advocates appointed by them for this purpose.’

6

Henry Bath & Son Ltd. v. Birgby Products [1962] Lloyd’s Rep 389; and see also the

English Arbitration Act 1996, s 36.

7 The arbitration rules of the Australian Football league, for example, limit legal representation.

8 See, for example, In the matter of an Arbitration between Lawler, Matusky and Skelly, Engineers

and the Attorney General of Barbados (No.320 of 1981) 22 August 1983 where the High Court of

Barbados held that there was a ‘common law right of everyone who is sui juris to appoint an agent

for any purpose’. The court held that this included the right to appoint a representative to appear

as advocate on a party’s behalf in a commercial arbitration.

9

In the matter of an Arbitration between Builders Federal (Hong Kong) Ltd. and Joseph Gartner &

Co., and Turner (East Asia) Pte Ltd (No. 90 of 1987) (1988) 2 MLJ 280 the Malaysian Judicial

Commissioner Chan Sek Keong ruled that the respondents, who were a foreign company, could

not select a counsel from their own country because Singapore’s Legal Profession Act operated as

a bar to foreign lawyers from representing their clients in international arbitrations in Singapore.

However, in June 2004 Singapore finally amended its Legal Profession Act to eliminate this

restriction on representation by foreign lawyers in arbitrations in Singapore. See also Birbrower,

Montabano, Condon & Frank v. Superior Court of Santa Clara County, 1998 Cal LEXIS 2, 1998

WL 1346 (Cal 1/5/98) where the court held that a New York lawyer representing a client in a

Californian arbitration was not qualified to act for his client because he was not called to the

Californian bar and therefore not entitled to recover his fees. The court, however, stated that this

principle would not apply to an international commercial arbitration.

39

in order that their opinions and submissions may

be tested by cross-examination. However, it

may sometimes be convenient and save time if

technical experts address the arbitral tribunal

directly as party representatives

10

.

The Supreme Court of California held in 1998

that representing a party in an arbitration

without its seat in California was ‘engaging in the

practice of law’ in that state. It followed that a

New York lawyer, not a member of the

Californian Bar, was not qualified to represent his

client in a Californian arbitration; and was thus

unable to recover his fee when he sued for it

11

.

Fortunately the court stated that the rule did not

apply in international arbitration. IN England

there is not, and never has been, any danger of

a similar situation arising

12

. A party to an

arbitration may, in theory, be represented by his

plumber, his dentist, or anyone else of his

choosing, although the choice usually falls on a

lawyer or specialist claims consultant in the

relevant industry

13

.”

IV) LONDON COURT OF INTERNATIONAL

ARBITRATION (LCIA) RULES (2014)

Article 18 – Legal Representatives

“18.1Any party may be represented in the

arbitration by one or more authorized legal

representatives appearing by name before the

Arbitral Tribunal.

18.2 Until the Arbitral Tribunal’s formation, the

Registrar may request from any party: (i) written

proof of the authority granted by that party to

any legal representative designated in its

Request or Response; and (ii) written

10 Both the UNCITRAL RULES (Art4) and the LCIA Rules (Art18) make it clear that parties are

entitled to be represented by non-lawyers.

11 Birbrower, Montabane, Condon Frank v. The Superior Court of Santa Clara County, 1998 Cal

Lexis2; 1998 WL 1346 (Cal 1/5/98)

12 i.e. that only a member of the local bar should be entitled to represent a party in a judicial or

quasi-judicial proceeding.

13 English Arbitration Act, 1996, s 36. This reaffirms the previous common law position.

40

confirmation of the names and addresses of all

such party’s legal representatives in the

arbitration. After its formation, at any time, the

arbitral Tribunal may order any party to provide

similar proof or confirmation in any form

considers appropriate.”

V) CHINA INTERNATIONAL ECONOMIC AND TRADE

ARBITRATION COMMISSIN (CIETAC)

ARBITRATION RULES.

Article 22 – Representation

“A party may be represented by its authorized

Chinese and/or foreign representative(s) in

handling matters relating to the arbitration. In

such a case, a Power of Attorney shall be

forwarded to the Arbitration Court by the party

or its authorized representative(s).”

VI) ARBITRATION RULES, MEDIATION RULES OF

INTERNATIONAL CHAMBER OF COMMERCE.

ARTICLE 26 – Hearings

“4. The parties may appear in person or

through duly authorized representatives. In

addition, they may be assisted by advisers.”

VII) COMMERCIAL ARBITRATION RULES AND

MEDIATION PROCEDURES OF AMERICAN

ARBITRATION ASSOCIATION

R-26. Representation

“Any party may participate without

representation (pro se), or by counsel or any

other representative of the party’s choosing,

unless such choice is prohibited by applicable

law. A party intending to be so represented shall

notify the other party and the AAA of the name,

telephone number and address, and email

41

address if available, of the representative at

least seven calendar days prior to the date set

for the hearing at which that person is first to

appear. When such a representative initiates an

arbitration or responds for a party, notice is

deemed to have been given.”

VIII)ARBITRATION RULES OF THE SINGAPORE

INTERNATIONAL ARBITRATION CENTRE (SIAC)

Party Representatives

“23.1Any party may be represented by legal

practitioners or any other authorized

representatives. The Registrar and/or the

Tribunal may require proof of authority of any

party representatives.

23.2 After the constitution of the Tribunal, any

change or addition by a party to its

representatives shall be promptly communicated

in writing to the parties, the Tribunal and the

Registrar.”

IX) RULES OF INTERNATIONAL COMMERCIAL

ARBITRATION BY INDIAN COUNCIL OF

ARBITRATION

20. Party Representation and assistance

“At the hearing, a party shall be entitled to

appear through Attorney, Advocate or a duly

authorized Advisor or Representative or in

person, subject to such proof of authority to the

satisfaction of the Registrar or the Tribunal.”

30. Shri C.U. Singh, learned senior counsel, by way of rejoinder,

opposed the submissions of learned counsel appearing for the

foreign law firms. He submitted that the stand of the Central

Government finally was to support the stand of the Bar Council of

42

India. The argument that participation of foreign lawyers will be in

the interest of the country was raised by the foreign law firms only

as shown from para 51 of the Madras High Court judgment. He

submitted that the arbitrator was also an ‘authority’ before whom

only advocates enrolled in India alone could appear. The arbitrator

could record evidence and summon witnesses through

Court(Section 27). Rules of Arbitration Institutions have to be in

conformity with the law of the land. He also submitted that the

rules framed by the Bar Council of India under Section 49 define the

practice of law so as to cover even giving of opinion.

31. Shri Singh further pointed out that Ethics for the profession as

applicable in India are different from the Ethics applicable in other

countries. In this regard, it was submitted that Rule 36 in Part VI,

Chapter II of the BCI Rules prohibits direct or indirect advertising by

advocates, or solicitation by any means whatsoever. Rule 18 bars

an advocate from fomenting litigation. In Bar Council of

Maharashtra versus M.V. Dabholkar

14

, this Court held that

advertising was a serious professional misconduct for an advocate.

As against this, in USA Rule 7.3 of the American Bar Association

Rules bars only in-person or live telephonic solicitation of clients,

but expressly permits lawyer-to-lawyer solicitation, as well as client

solicitation by written, recorded or electronic communication, unless

14 (1976) 2 SCC 291

43

the target of solicitation has made known to the lawyer his desire

not to be solicited, or the solicitation involved coercion, duress or

harassment. The US Supreme Court, inter alia, in Zauderer

versus Office of Disciplinary Counsel

15 and in Shapero versus

Kentucky Bar Association

16

struck down disciplinary actions

against lawyers for soliciting clients through print advertisements or

hoardings. In UK, Solicitors Regulation Authority(SRA) is a

regulatory body established under the Legal Services Act, 2007.

Chapter 8 of the SRA Handbook permits publicity of the law firm but

prohibits solicitations.

32. In India, with regard to Contingency fees, Rule 20 in Part VI,

Chapter II of the BCI Rules bars an advocate from stipulating a fee

contingent on the results of the litigation or from agreeing to share

the proceeds thereof. Rule 21 prohibits practices akin to champerty

or maintenance, and prohibits an advocate from buying or

trafficking in or stipulating or agreeing to receive any share or

interest in an actionable claim. In USA Rule 1.5 (c) of the ABA Rules

permits lawyers to charge contingency fees, except in certain

specified cases like criminal defence, etc. Fee-splitting

arrangements between lawyers from different firms are also

permitted with some restrictions. In U.K., Section 58 of the Courts

and Legal Services Act, 1990 permits “conditional fee agreements”

15 471 US 626 (1985)

16 486 US 466

44

except in criminal proceedings and family law matters and Section

58AA permits “damages-based fee agreements”, all of which entitle

legal practitioners to a share of the “winnings”.

33. In India, there are no rules framed by the Bar Council on the

subject ‘sale of law practice’. In U.S.A., Rule 1.17 permits law firms

or lawyers having private practice to sell their practice including the

goodwill. In U.K., SRA Guidelines permit sale of practice as a going

concern or acquisition of a practice which is closing down.

34. In India, senior advocates are barred from interacting directly

with clients, and are not permitted to draft pleadings or affidavits,

correspond on behalf of clients, or to appear in court unassisted by

an advocate (Part VI, Chapter I of the Bar Council of India Rules). In

U.S.A., no such distinction or designations are made. In U.K., there

appear to be no restrictions on Queen’s Counsel (QCs) similar to the

ones imposed by the Bar Council in India. QCs are permitted to join

law firms as partners.

35. In India, funding of litigation by advocates is not explicitly

prohibited, but a conjoint reading of Rule 18 (fomenting litigation),

Rule 20 (contingency fees), Rule 21 (share or interest in an

actionable claim) and Rule 22 (participating in bids in execution,

etc.) would strongly suggest that advocates in India cannot fund

litigation on behalf of their clients. There appears to be no

45

restriction on third parties (non-lawyers) funding the litigation and

getting repaid after the outcome of the litigation. In U.S.A., lawyers

are permitted to fund the entire litigation and take their fee as a

percentage of the proceeds if they win the case. Third Party

Litigation Funding/Legal Financing agreements are not prohibited.

In U.K., Section 58B of the Courts and Legal Services Act, 1990

permits litigation funding agreements between legal service

providers and litigants or clients, and also permits third party

Litigation Funding or Legal Financing agreements, whereby the third

party can get a share of the damages or “winnings”.

36. In India, partnerships with non-lawyers for conducting legal

practice is not permitted. In U.K., Section 66 of the Courts and

Legal Services Act, 1990 expressly permits solicitors and barristers

to enter into partnerships with non-solicitors and non-barristers.

CONSIDERATION OF THE ISSUES

37. We have considered the rival submissions. Questions for

consideration mainly arise out of directions in para 63 of the Madras

High Court judgment which have already been quoted in the

beginning of this judgment. viz. :

(i) Whether the expression ‘practise the profession of law’

includes only litigation practice or non-litigation practice

also;

46

(ii) Whether such practice by foreign law firms or foreign

lawyers is permissible without fulfilling the requirements

of Advocates Act and the Bar Council of India Rules;

(iii) If not, whether there is a bar for the said law firms or

lawyers to visit India on ‘fly in and fly out’ basis for giving

legal advice regarding foreign law on diverse international

legal issues;

(iv) Whether there is no bar to foreign law firms and lawyers

from conducting arbitration proceedings and disputes

arising out of contracts relating to international

commercial arbitration;

(v) Whether BPO companies providing integrated services are

not covered by the Advocates Act or the Bar Council of

India rules.

RE : (i)

38. In Pravin C. Shah versus K.A. Mohd. Ali

17

, it was observed

that right to practice is genus of which right to appear and conduct

cases is specie. It was observed:

“………The right of the advocate to practise

envelopes a lot of acts to be performed by him in

discharge of his professional duties. Apart form

appearing in the courts he can be consulted by

17 (2001) 8 SCC 650

47

his clients, he can give his legal opinion

whenever sought for, he can draft instruments,

pleadings, affidavits or any other documents, he

can participate in any conference involving legal

discussions etc. ……”

In Ex. Capt. Harish Uppal versus Union of India

18

, same

view was reiterated.

39. Ethics of the legal profession apply not only when an advocate

appears before the Court. The same also apply to regulate practice

outside the Court. Adhering to such Ethics is integral to the

administration of justice. The professional standards laid down from

time to time are required to be followed. Thus, we uphold the view

that practice of law includes litigation as well as non litigation.

RE : (ii)

40. We have already held that practicing of law includes not only

appearance in courts but also giving of opinion, drafting of

instruments, participation in conferences involving legal discussion.

These are parts of non-litigation practice which is part of practice of

law. Scheme in Chapter-IV of the Advocates Act makes it clear that

advocates enrolled with the Bar Council alone are entitled to

practice law, except as otherwise provided in any other law. All

others can appear only with the permission of the court, authority or

person before whom the proceedings are pending. Regulatory

mechanism for conduct of advocates applies to non-litigation work

18 (2003) 2 SCC 45

48

also. The prohibition applicable to any person in India, other than

advocate enrolled under the Advocates Act, certainly applies to any

foreigner also.

RE : (iii)

41. Visit of any foreign lawyer on fly in and fly out basis may

amount to practice of law if it is on regular basis. A casual visit for

giving advice may not be covered by the expression ‘practice’.

Whether a particular visit is casual or frequent so as to amount to

practice is a question of fact to be determined from situation to

situation. Bar Council of India or Union of India are at liberty to

make appropriate rules in this regard. We may, however, make it

clear that the contention that the Advocates Act applies only if a

person is practicing Indian law cannot be accepted. Conversely,

plea that a foreign lawyer is entitled to practice foreign law in India

without subjecting himself to the regulatory mechanism of the Bar

Council of India Rules can also be not accepted. We do not find any

merit in the contention that the Advocates Act does not deal with

companies or firms and only individuals. If prohibition applies to an

individual, it equally applies to group of individuals or juridical

persons.

RE: (iv)

42. It is not possible to hold that there is absolutely no bar to a

foreign lawyer for conducting arbitrations in India. If the matter is

49

governed by particular rules of an institution or if the matter

otherwise falls under Section 32 or 33, there is no bar to conduct

such proceedings in prescribed manner. If the matter is governed by

an international commercial arbitration agreement, conduct of

proceedings may fall under Section 32 or 33 read with the

provisions of the Arbitration Act. Even in such cases, Code of

Conduct, if any, applicable to the legal profession in India has to be

followed. It is for the Bar Council of India or Central Government to

make a specific provision in this regard, if considered appropriate.

RE: (v)

43. The BPO companies providing range of customized and

integrated services and functions to its customers may not violate

the provisions of the Advocates Act, only if the activities in pith and

substance do not amount to practice of law. The manner in which

they are styled may not be conclusive. As already explained, if their

services do not directly or indirectly amount to practice of law, the

Advocates Act may not apply. This is a matter which may have to

be dealt with on case to case basis having regard to a fact situation.

44. In view of above, we uphold the view of the Bombay High

Court and Madras High Court in para 63 (i) of the judgment to the

effect that foreign law firms/companies or foreign lawyers cannot

practice profession of law in India either in the litigation or in nonlitigation

side. We, however, modify the direction of the Madras

50

High Court in Para 63(ii) that there was no bar for the foreign law

firms or foreign lawyers to visit India for a temporary period on a

“fly in and fly out” basis for the purpose of giving legal advice to

their clients in India regarding foreign law or their own system of law

and on diverse international legal issues. We hold that the

expression “fly in and fly out” will only cover a casual visit not

amounting to “practice”. In case of a dispute whether a foreign

lawyer was limiting himself to “fly in and fly out” on casual basis for

the purpose of giving legal advice to their clients in India regarding

foreign law or their own system of law and on diverse international

legal issues or whether in substance he was doing practice which is

prohibited can be determined by the Bar Council of India. However,

the Bar Council of India or Union of India will be at liberty to make

appropriate Rules in this regard including extending Code of Ethics

being applicable even to such cases.

45. We also modify the direction in Para 63 (iii) that foreign

lawyers cannot be debarred from coming to India to conduct

arbitration proceedings in respect of disputes arising out of a

contract relating to international commercial arbitration. We hold

that there is no absolute right of the foreign lawyer to conduct

arbitration proceedings in respect of disputes arising out of a

contract relating to international commercial arbitration. If the

Rules of Institutional Arbitration apply or the matter is covered by

51

the provisions of the Arbitration Act, foreign lawyers may not be

debarred from conducting arbitration proceedings arising out of

international commercial arbitration in view of Sections 32 and 33 of

the Advocates Act. However, they will be governed by code of

conduct applicable to the legal profession in India. Bar Council of

India or the Union of India are at liberty to frame rules in this regard.

46. We also modify the direction of the Madras High Court in Para

63(iv) that the B.P.O. Companies providing wide range of customized

and integrated services and functions to its customers like word

processing, secretarial support, transcription services, proof reading

services, travel desk support services, etc. do not come within the

purview of the Advocates Act, 1961 or the Bar Council of India Rules.

We hold that mere label of such services cannot be treated as

conclusive. 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.

The Civil Appeals are disposed of accordingly.

.….………………………………..J.

[ADARSH KUMAR GOEL]

.….………………………………..J.

[UDAY UMESH LALIT]

NEW DELHI;

MARCH 13, 2018.

52