Supreme Court Upholds Ban on Foreign Lawyers Practicing Law in India, Allows Limited "Fly-In Fly-Out" Legal Advice on Foreign Law

SC Rules Foreign Law Firms Cannot Practice Indian Law Without Bar Council Enrollment; Permits Temporary Visits for Foreign Law Advice and Regulated Participation in International Arbitration

In a landmark decision dated March 13, 2018, the Supreme Court of India delivered a comprehensive judgment clarifying the scope of foreign lawyers' practice rights within India under the Advocates Act, 1961. The judgment arose from a batch of civil appeals including the Bar Council of India vs. A.K. Balaji and others, addressing whether foreign law firms and lawyers are permitted to practice law in India.

The apex court affirmed that the legal profession in India, encompassing both litigation and non-litigation practices, is exclusively reserved for advocates enrolled with the Bar Council of India under the Advocates Act, 1961. The Court emphasized that the phrase "practice the profession of law" includes a wide gamut of activities such as appearing before courts, giving legal opinions, drafting documents, and participating in legal conferences. This interpretation extends the regulatory and ethical framework of the Bar Council to non-litigation activities as well.

Rejecting claims that foreign lawyers can practice Indian law without enrollment, the Court held that no person other than an advocate enrolled under the Act can practice law in India, whether in courts or outside, without appropriate permission. This prohibition applies equally to individuals, groups, and juridical persons, including foreign law firms. Therefore, foreign law firms cannot establish liaison offices or legal practice operations in India without compliance with Indian law.

However, the Court carved out a limited exception for foreign lawyers visiting India on a "fly in and fly out" basis. Such visits, if casual and occasional, are permitted solely for the purpose of advising clients on foreign law or their own jurisdiction’s legal system. The Court clarified that if such visits become regular or substantial, they may amount to prohibited practice under the Advocates Act, subject to scrutiny by the Bar Council.

Regarding international commercial arbitration, the Supreme Court recognized the importance of allowing foreign lawyers to participate in arbitration proceedings seated in India, particularly under contracts involving international commercial arbitration as defined under the Arbitration and Conciliation Act, 1996. The Court stated that foreign lawyers are not absolutely barred from conducting such arbitrations, provided they comply with the applicable rules of institutional arbitration and adhere to the Indian legal profession's code of conduct. Both the Bar Council of India and the Union Government retain the authority to frame specific regulations governing foreign lawyers’ participation in arbitration.

The Court also addressed the role of Business Process Outsourcing (BPO) companies offering legal support services. It held that such companies do not violate the Advocates Act if their core activities do not amount to practicing law. The label or description of their services is not determinative; rather, the substantive nature of their work will be examined on a case-by-case basis.

The ruling thus strikes a balance between protecting the integrity and ethical standards of the Indian legal profession and accommodating the practical needs of international commerce and arbitration. The Supreme Court also directed the Union Government to expedite framing appropriate rules in consultation with the Bar Council of India to regulate foreign lawyers' activities in India.

This judgment resolves longstanding uncertainty over foreign legal practice in India and reinforces the exclusive domain of Indian advocates in legal practice, while recognizing limited roles for foreign lawyers in international contexts.

Statutory provisions

Advocates Act, 1961 Sections 2, 6, 17, 24, 29, 30, 32, 33, 35, 47, 49, Arbitration and Conciliation Act, 1996 Section 2(1)(f), 18, 19, 28(b), 32, 33, 34(2)(a)(iii), 48(1)(b), 53

Bar Council of India v. A.K. Balaji, (SC) : Law Finder Doc Id # 984842