Legal Restrictions on International Law Firms in India

The petition filed by A.K. Balaji sought to restrain international law firms from practicing in India. It also sought for directions to the Bar Council of India (BCI) and the Centre to take necessary steps against nearly 30 international law firms, which are practicing illegally in India. The matter was heard by a Bench comprising of Chief Justice M. Yusuf Eqbal and Justice T.S. Sivagnanam. The matter was adjourned till October 5, 2010.

 

Mr. Y.K. Singh, the Assistant Legal Adviser in the Ministry of Law and Justice, Department of Legal Affairs, filed a counter affidavit. The affidavit stated that the lack of a regulatory framework pertaining to the functioning of law firms in India has generated some serious apprehensions among legal professionals. Due to lack of a proper regulatory framework, there is no control or supervision of any activities pertaining to the foreign law firms. There is an urgent requirement of a regulatory framework to monitor their activities.

 

Further, no empirical data was available with the Bar Council of India or the Government of India regarding the practice or entry of such foreign firms, which are illegally undertaking law practice in India. The government is planning to commission a study to know the nature of Legal Process Outsourcing (LPO) undertaken by the foreign law firms. An appropriate decision shall be taken on the basis of the study.

 

However, Mr. Singh said that restricting international firms from taking part in negotiations and arbitrations will prove counter-productive. Much arbitration is held in foreign countries, with Indian judges and lawyers as arbitrators. If foreign law firms are barred from dealing in arbitration in India, then India would lose many of the arbitration. Also, such a step will prevent India from becoming a hub of international arbitration.

 

Not all Indian lawyers want restrictions to be placed on the entry of international law firms. However, several amendments and significant discussions with the legal fraternity, the Bar and the Bench, will be required before the entry of foreign law firms or legal service providers can be legalized as part of the Indian legal system.