In a landmark decision, the Bar Council of India has opened Indian legal practice to foreign firms and lawyers. The Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022 entail provisions for the registration of foreign lawyers/firms, application regulations, eligibility, removal, law practice, disciplinary measures, regulatory provisions and so on.

The rules could be a game-changer for Indian counsels to get global exposure and acquire a competitive edge. The new policy is expected to foster mutually beneficial relationships between Indian and overseas lawyers, enabling global companies investing in India to receive legal advice from their preferred law firms.

Many regimes have allowed foreign counsels and firms to practise in their jurisdiction. Foreign legal firms have now been allowed to operate in Singapore and practise Singaporean law, aiding the capitalisation of Singapore as an international commercial arbitration hub. In 2020, Japan also passed regulations permitting foreign legal practice. In Australia and the United States of America, overseas lawyers may seek admission to the regional bar associations in states and territories under certain conditions.

The BCI has emphasised that the opening up of the legal industry will be restricted and regulated to ensure mutual benefit for all lawyers. The registration mandate will not apply to law practice by a foreign lawyer/law firm in case such practice is done on a ‘fly in and fly out basis’ for advisory purposes regarding foreign laws. Further, the registration of such foreign firm/lawyer shall be allowed only if an Indian advocate is allowed to practise in the jurisdiction of the said foreign lawyer/firm seeking registration under the principle of reciprocity. There is also the caveat that foreign practice shall be allowed only in non-litigious matters. The rules inter alia specify that (i) foreign lawyers/law firms shall not be permitted to appear before any courts, tribunals or other statutory or regulatory authorities; (ii) they shall be allowed to practise on transactional work/corporate work such as joint ventures, mergers and acquisitions, intellectual property matters, drafting of contracts and other related matters on a reciprocal basis; (iii) they shall not be permitted to do any work pertaining to conveyancing of property, title investigation or other similar works.

Opening up the Indian market to international counsels has been a matter of contention. Calls have been made to allow foreign lawyers into the market in order to increase competitiveness, improve the standards of legal service, and facilitate cross-border transactions. However, some contend that this would lead to foreign firms exploiting cheap labour and undercutting Indian counsels’ fees.

Some issues merit concern. While these rules have opened up the market for dual qualified Indian lawyers, they are silent on whether exclusive alliances are permitted between Indian law firms and foreign lawyers. While foreign lawyers are prohibited from practising Indian law, they will now be allowed to act in international arbitration cases. The rules provide that a foreign lawyer can be engaged in an Indian-seated arbitration by a foreign client. However, they are silent on whether Indian parties can do so. This might appear to be a drafting oversight.

India is already well-placed to become an international hub for commercial arbitration. The Indian legal system is well-placed to enforce contracts and arbitration agreements. However, MNCs and foreign commercial entities are reluctant to prefer India as a venue for arbitration proceedings because they are not allowed to bring counsels from their own countries. The new rules will change this notion.

The legal industry in India is likely to undergo a metamorphosis as a result of this policy change. It will face increased competition, have better access to international expertise, and witness the infusion of technology and machine learning for routine legal tasks as well as the promotion of cross-border transactions.

Trisha Shreyashi is an advocate