SC refuses Foreign Law firms to open office in India but permits to advise clients on ‘fly-in-fly-out’ basis, Read Judgment

    The Supreme court on Tuesday said that foreign law firms cannot set up offices in India but their lawyers could give legal advise on foreign laws.

    The bench headed by justices Adarsh Kumar Goel and Uday Umesh Lalit said that foreign lawyers could come to the country and participate in international commercial arbitration. The bench ruled that foreign law firms can fly in and fly out of the country to give legal advice, but they can’t be allowed to set up permanent offices in the country.

    SC 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.

    Justice Goel, while pronouncing the judgment, said that even for the limited purposes they would be subject to the Bar Council of India’s Code of Conduct. The court also said that BPO companies engaged in rendering legal services did not come within the ambit of the Advocate Act and thus they can operate in India.

    About arbitration, the Court said that there was no absolute right foreign firms had to participate in arbitration involving foreign laws and that it would only be permissible on the basis of the type of the agreement as well as the sanction under Sections 32 and 33 of the Act.
    The court verdict came on pleas challenging judgements by the Bombay and Madras high courts. Madras high court had said that foreign lawyers can fly in and fly out for tendering legal advice on foreign laws.

    Interestingly, last year in January, the ministry of commerce and industry on January 3 amended a rule allowing foreign law firms to set up offices and advise clients from Indian Special Economic Zones (SEZs). Before that, India did not permit multinational law firms to operate in the country. Indian law firms were also not allowed to operate from any of the SEZs.  Last year’s amendment was made by the commerce ministry, while whether to allow a foreign law firm in India is a purview of ministry of law and justice, said industry experts at the time.

    Read full judgment here: