In a significant move that can open up cross-border deal pipelines for global law firms, the Bar Council of India (BCI) on Wednesday allowed foreign lawyers and law firms to practice in India.
This would include matters relating to foreign law and diverse international law and international arbitration matters in India, on a reciprocity basis, the note from the BCI said.
Until now, cross-border transactions including M&As, fund raises from global investors and Indian companies expanding overseas used the services of these firms through their local tie-ups in India.
“With India’s economic rise, the quantum of cross-border transactions being conducted by Indian companies is slated to increase. Successful negotiations hinge on the availability of timely and cost-effective advice on matters of foreign law, which this move shall aid,” said Amit Singh, managing director and co-head, enterprise technology and services investment banking, Avendus Capital.
The announcement comes five years after the Supreme Court (SC) reaffirmed the previous position of foreign lawyers practicing in India in the case of Bar Council of India Vs. A. K. Balaji and Ors. wherein the apex court restricted foreign law firms and lawyers from practicing in India.
The judgment however permitted such firms/lawyers to visit India on a casual or temporary basis to render legal advice regarding foreign law, since it would not be covered as "practice" under the Advocates Act, 1961.
The BCI now intends to help the legal profession grow in India to the benefit of lawyers.
It is important to note, however, that the rules do not permit foreign lawyers/law firms to appear before any courts, tribunals, or other statutory or regulatory authorities. As per the rules, foreign lawyers/law firms are permitted to only engage in non-litigious matters such as transactional work (joint ventures, mergers and acquisitions), intellectual property matters, drafting of contracts and other related matters on a reciprocal basis.
Historically, there has been a pushback from the domestic legal fraternity due to a lack of a level-playing field with their foreign counterparts.
“The resistance from the legal fraternity existed due to the differences in structures and rules applicable for practicing law in India as compared to foreign jurisdictions which didn’t offer a level playing field for Indian lawyers,” said Yashojit Mitra, partner at Economic Laws Practice (ELP), a homegrown law firm.
However, this move might open up doors for Indian firms to also tap into an increasing pool of cross-border work.
“This would be a great opportunity for domestic law firms in terms of collaboration with international firms and an influx of global talent which will help the sector grow,” Mitra of ELP added.
Sudip Mahapatra, partner at S&R Associates echoes the sentiment. “this would lead to an improvement in the overall industry standards. From a client's perspective, it will give them additional options. This will especially be relevant for global private equity funds, large multinational corporations and Indian corporates with significant overseas presence.”