Non-itigation Practice by Foreign Law Firms is illegal

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Non-litigation Practice by Foreign Law Firms is illegal

AIT News Network

MUMBAI. Giving a jolt to back door entry of foreign law firms in India and also to Indian Law Firms signing Best Friend MOUs with Foreign Law Firms; Bombay High Court has ruled that non-litigation Practice by Foreign Law Firms is illegal.

Bombay High Court has decided the issues: firstly, whether the permissions granted by the Reserve Bank of India to the respondent Nos.12 to 14 foreign law firms to establish their place of business in India (liaison office) under Section 29 of the Foreign Exchange Regulation Act, 1973 are legal and valid ? Secondly, assuming such permissions are valid, whether these foreign law firms could carry on their liaison activities in India only on being enrolled as advocates under the Advocates Act, 1961 ? To be specific, the question is, whether practising in non litigious matters amounts to ‘practising the profession of law’ under section 29 of the Advocates Act, 1961?

The petitioner Lawyers Collective sought declaration that the permission granted by RBI to the respondents No.12 to 14 (Foreign Law Firms White & Case,a firm of lawyers having its head office at 1155 Avenue of the Americans, New York, New York 10036, United States of America and with offices at the Nirmal Building, Nariman Point, Mumbai , Chadbourne & Parke,a law firm having its head office at Rockefeller Plaza, New York, New York 11012-0127, United States of America and with offices at Hotel Maurya Sheraton, new Delhi and/or at A-168, Anand Niketan, New Delhi – 110 021, 14. Ashurst Morris Crisp having its principal office at Broadwalla House) , is bad in law and that the respondents No.12 to 14 cannot be permitted to carry on their activities in India unless they are enrolled as advocates under the 1961 Act.

Respondents No.12 to 14, were the foreign law firms practising the profession of law in U.K. / U.S.A. and having branch offices in different parts of the world had applied to the RBI during the period 1993 to 1995 seeking permission to open their liaison offices in India

The liaison activity inter alia included providing “office support services for lawyers of those offices working in India on India related matters” and also included drafting documents, reviewing and providing comments on documents, conducting negotiations and advising clients on international standards and customary practice relating to the client’s transaction etc. It was contended by the respondent No.12 to 14 that they never had and has no intention to practise the profession of law in India. Thus, from the affidavit in reply, it was evident that the liaison activities were nothing but practising the profession of law in non litigious matters.

HC held that when the Parliament has enacted the 1961 Act to regulate the persons practising the profession of law, it would not be correct to hold that the 1961 Act is restricted to the persons practising in litigious matters and that the said Act does not apply to persons practising in non litigious matters. There is no reason to hold that in India the practise in non litigious matters is unregulated.

HC held that 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.

(Click here for full text of Judgment AIT-2009-473-HC)

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