BAR COUNCIL OF INDIA versus A.K. BALALJI AND ORS. on 13 March 2018

[2018] 3 S.C.R. 229

BAR COUNCIL OF INDIA

v

A.K. BALALJI AND ORS.

(Civil Appeal Nos. 7875-7879 of 2015)

MARCH 13, 2018

[ADARSH KUMAR GOEL AND UDAY UMESH LALIT, JJ.]

Advocates Act, 1961:

ss. 24, 29, 47(2) r/w s.49(1)(e) and s.49A – Foreign law firms/lawyers – Permissibility to practice in India – Held: Practice of lawincludes litigation as well as non-litigation – Giving of opinion,drafting of instruments, participation in conferences involving legaldiscussion are parts of non-litigation practice – Regulatorymechanism for conduct of advocates applies to non-litigation workalso – As per the Act, advocates enrolled with the Bar Council aloneare entitled to practice law – Foreign law firms/companies or foreignlawyers cannot practice profession of law in India either in thelitigation or in non-litigation side – Visit of any foreign lawyer onfly in and fly out basis may amount to practice of law if it is onregular basis – A casual visit for giving advice may not be coveredby the expression ‘practice’ – Whether a particular visit is casualor frequent so as to amount to practice is a question of fact to bedetermined from situation to situation – It is not correct that the Actapplies only if a person is practicing Indian law – A foreign lawyeris not entitled even to practice foreign law in India without subjectinghimself to the regulatory mechanism of the Bar Council of IndiaRules – Advocates Act equally deals with companies or firm andindividuals – Bar Council of India Rules,1975.

ss. 32 and 33 – Foreign law firms/lawyers – Permissibility toconduct arbitration proceedings – In respect of disputes arisingout of a contract relating to international commercial arbitration –Held: There is no absolute right of foreign lawyer to conduct sucharbitration proceedings – However, they may not be debarred fromconducting such arbitration proceedings in view of ss. 32 and 33,

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Aif the Rules of Institutional Arbitration apply or the matter is coveredby the provisions of Arbitration Act – But they will be governed byCode of Conduct applicable to legal profession in India – CentralGovernment or Bar Council of India is at liberty to frame rules inthis regard.

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Applicability of the Act – To the customised and integratedservice provided by Business Process Outsourcing (BPO) Companies– Held: If such services in pith and substance amount to practice oflaw, the Act would be applicable – The manner in which they arestyled may not be conclusive.

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Disposing of the appeals, the Court

HELD: 1. Ethics of the legal profession apply not only whenan advocate appears before the Court. The same also apply toregulate practice outside the Court. Adhering to such ethics isDintegral to the administration of justice. The professionalstandards laid down from time to time are required to be followed.Thus, practice of law includes litigation as well as non litigation.[Para 39] [270-A-B]

2. Practicing of law includes not only appearance in courtsEbut also giving of opinion, drafting of instruments, participationin conferences involving legal discussion. These are parts of non-litigation practice which is part of practice of law. Scheme inChapter-IV of the Advocates Act makes it clear that advocatesenrolled with the Bar Council alone are entitled to practice law,except as otherwise provided in any other law. All others canFappear only with the permission of the court, authority or personbefore whom the proceedings are pending. Regulatorymechanism for conduct of advocates applies to non-litigation workalso. The prohibition applicable to any person in India, other thanadvocate enrolled under the Advocates Act, certainly applies toGany foreigner. The view of the Bombay High Court and MadrasHigh Court to the effect that foreign law firms/companies orforeign lawyers cannot practice profession of law in India eitherin the litigation or in non-litigation side, is upheld. [Paras 40 and44] [270-C-E; 271-E-F]

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Pravin C. Shah versus K.A. Mohd. Ali (2001) 8 SCC650 : [2001] 3 Suppl. SCR 675 ; Ex. Capt. Harish Uppalv. Union of India (2003) 2 SCC 45 : [2002] 5 Suppl.SCR 186 – relied on.

3. Visit of any foreign lawyer on fly in and fly out basis mayamount to practice of law if it is on regular basis. A casual visitfor giving advice may not be covered by the expression ‘practice’.Whether a particular visit is casual or frequent so as to amountto practice is a question of fact to be determined from situationto situation. In case of a dispute whether a foreign lawyer waslimiting himself to “fly in and fly out” on casual basis for thepurpose of giving legal advice to their clients in India regardingforeign law or their own system of law and on diverse internationallegal issues or whether in substance he was doing practice whichis prohibited can be determined by the Bar Council of India.However, the Bar Council of India or Union of India will be atliberty to make appropriate Rules in this regard includingextending Code of Ethics being applicable even to such cases. Itis not correct that the Advocates Act applies only if a person ispracticing Indian law. It also cannot be said that a foreign lawyeris entitled to practice foreign law in India without subjectinghimself to the regulatory mechanism of the Bar Council of IndiaRules. The Advocates Act equally deals with companies or firmsand individuals. If prohibition applies to an individual, it equallyapplies to group of individuals or juridical persons. [Paras 41 and44] [270-F-G; 271-G-H]

4. The direction of Madras High Court that foreign lawyerscannot be debarred from coming to India to conduct arbitrationproceedings in respect of disputes arising out of a contractrelating to international commercial arbitration is also modified.There is no absolute right of the foreign lawyer to conductarbitration proceedings in respect of disputes arising out of acontract relating to international commercial arbitration. If theRules of Institutional Arbitration apply or the matter is coveredby the provisions of the Arbitration Act, foreign lawyers may notbe debarred from conducting arbitration proceedings arising out A

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Aof international commercial arbitration in view of Sections 32 and33 of the Advocates Act. However, they will be governed bycode of conduct applicable to the legal profession in India. BarCouncil of India or the Union of India are at liberty to frame rulesin this regard. [Para 45] [272-B-D]

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5. The Court also modifies the direction of the Madras HighCourt that the B.P.O. Companies providing wide range ofcustomized and integrated services and functions to its customerslike word processing, secretarial support, transcription services,proof reading services, travel desk support services, etc. do notCcome within the purview of the Advocates Act, 1961 or the BarCouncil of India Rules. Mere label of such services cannot betreated as conclusive. If in pith and substance the services amountto practice of law, the provisions of the Advocates Act will applyand foreign law firms or foreign lawyers will not be allowed to doso. If their services do not directly or indirectly amount to practiceDof law, the Advocates Act may not apply. This is a matter whichmay have to be dealt with on case to case basis having regard toa fact situation.[Paras 43 and 46] [271-D-F]

Bar Council of Maharashtra v. M.V. DabholkarE(1976) 2 SCC 291 : [1976] 2 SCR 48 – referred to.

Roel v. New York County Lawyers Association 3 N.Y.2d 224 (1957) ; Appell v. Reiner 43 N.J. 313 (1964) ;204 A.2d 146 ; Zauderer v. Office of DisciplinaryCounsel 471 US 626 (1985) ; Shapero v. Kentucky BarFAssociation 486 US 466 – referred to.

Case Law Reference

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CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7875-7879 of 2015.

From the Judgment and Order dated 21.02.2012 of the High Courtof Judicature at Madras in WP No. 5614 of 2010 and M.P. Nos.1, 3 to 5of 2010.

WITH

Civil Appeal Nos.8028 and 7170 of 2015.

C. U. Singh, Rajiv Dutta, Sr. Advs, Ardhendumauli Kumar Prasad,Ms. Taruna Ardhendumauli Prasad, Nirmal Kumar Ambastha, NamitSaxena, Nakul Dewan, Vikash Singh, Himanshu Chaubey, Zain Maqbool,Ms. Neelu Mohan, Ms. Abhishikta Mallick, Subhro Sanyal, Advs for theAppellant.

Maninder Singh, ASG, Arvind Datar, Sajjan Poovayya, DushyantDave, Vikas Singh, Gurukrishna Kumar, Sr. Advs, Rishi Kumar, MaheshAgarwal, Ms. Neeha Nagpal, Rishi Agrawala, E.C. Agrawala,Ms. Aastha Mehta, Ritin Rai, Chitranshul A. Sinha, Priyadarshi Banerjee,Pratibhanu Singh K., Ms. Sonali Khanna, Abhas Kshetrapal, Jayant Malik,M/s. Dua Associates, Sudhir Sharma, Abhishek Swaroop, Akhil Anand,Ayush Malhotra (for Abhay Kumar), Ms. Madhavi Diwan, AbhinavMukherjee, Prabhas Bajaj, Akshay Amritanshu, M. K. Maroria,Mrs. Anil Katiyar, Vikrant Yadav (For M.C. Dhingra), Aditya Verma,Ms. Jennifer Rohita Xavier, Vikas Singh Jangra, Ms. S. Lakshmi,M.S. Ananth, Moazzam Khan, Alppak Banerjee, Dushyant Tiwari, BrijeshKumar, Akshat Goel (for M/s.Lex Pretia & Co.), Nakul Dewan, VikashSingh, Himanshu Chaubey, Zain Maqbool, Ms. Neelu Mohan,Ms. Abhishikta Mallick, Syed Jafar Alam, Vipul Wadhwa, N. L. Ganapathi,Aman Shukla, Dr. Lalit Bhasin, Yakesh Anand, Ms. Anindita Pujari,Ms. Triveni Potekar, Syed Rehan, Ms. Kavita Bhardwaj, Satyajit Desai,Ms. Anagha S. Desai, Ardhendumauli Kumar Prasad, C. Mukund, PankajJain, M. B. Elakkumanan, Bijoy Kumar Jain, Dr. Lalit Bhasin, Ms. NinaGupta, Mudit Sharma, Ms. Palak Chadha, Tushar Sharma, PurushottamSharma Tripathi, Mrs. Shally Bhasin, Ritin Rai, C. Paramasivam, RakeshK. Sharma, Ms. Meera Mathur, Ms. Divya Harchandani, Nikhil Nayyar,Advs for the Respondents.

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234SUPREME COURT REPORTS

[2018] 3 S.C.R.

AThe Judgment of the Court was delivered by ADARSH KUMAR GOEL, J. 1. The issue involved in thisbatch of matters is whether foreign law firms/lawyers are permitted topractice in India. Reference needs to be made to two leading matters.Civil Appeal Nos.7875-79 of 2015 have been filed by the Bar Council ofBIndia against the Judgment of Madras High Court dated 21[st] February,2012 in A.K. Balaji versus The Government of India[1]. Civil AppealNo.8028 of 2015 has been filed by Global Indian Lawyers against thejudgment of Bombay High Court dated 16[th] December, 2009 in LawyersCollective versus Bar Council of India[2].

C2. The Madras High Court held as follows:

“63. After giving our anxious consideration to the matter, bothon facts and on law, we come to the following conclusion :-

(i) Foreign law firms or foreign lawyers cannot practice theprofession of law in India either on the litigation or non-Dlitigation side, unless they fulfil the requirement of theAdvocates Act, 1961 and the Bar Council of India Rules.

(ii) However, there is no bar either in the Act or the Rules forthe foreign law firms or foreign lawyers to visit India for atemporary period on a “fly in and fly out” basis, for theEpurpose of giving legal advise to their clients in Indiaregarding foreign law or their own system of law and ondiverse international legal issues.

(iii) Moreover, having regard to the aim and object of theInternational Commercial Arbitration introduced in theFArbitration and Conciliation Act, 1996, foreign lawyers cannotbe debarred to come to India and conduct arbitrationproceedings in respect of disputes arising out of a contractrelating to international commercial arbitration.

(iv) The B.P.O. Companies providing wide range of customisedGand integrated services and functions to its customers likeword-processing, secretarial support, transcription services,proof-reading services, travel desk support services, etc. donot come within the purview of the Advocates Act, 1961 or 1 AIR 2012 Mad 124H2 2010 (2) Mah LJ 726

the Bar Council of India Rules. However, in the event of anycomplaint made against these B.P.O. Companies violating theprovisions of the Act, the Bar Council of India may takeappropriate action against such erring companies.”

3. The Bombay High Court, on the other hand, concluded asfollows:

“60. For all the aforesaid reasons, we hold that in the factsof the present case, the RBI was not justified in grantingpermission to the foreign law firms to open liaison offices inIndia under Section 29 of the 1973 Act. We further hold thatthe expressions ‘ to practise the profession of law’ in Section29 of the 1961 Act is wide enough to cover the personspractising in litigious matters as well as persons practising innon litigious matters and, therefore, to practise in non litigiousmatters in India, the respondent Nos. 12 to 14 were bound tofollow the provisions contained in the 1961 Act. The petitionis disposed of accordingly with no order as to costs.”

4. When the matter against the judgment of the Madras HighCourt came up for hearing before this Court on 4[th] July, 2012, followinginterim order was passed :

“In the meanwhile, it is clarified that Reserve Bank of Indiashall not grant any permission to the foreign law firms toopen liaison offices in India under Section 29 of the ForeignExchange Regulation Act, 1973. It is also clarified that theexpression “to practice the profession of law” under Section29 of the Advocates Act, 1961 covers the persons practicinglitigious matters as well as non-litigious matters other thancontemplated in para 63(ii) of the impugned order and,therefore, to practice in non-litigious matters in India theforeign law firms, by whatever name called or described, shallbe bound to follow the provisions contained in the AdvocatesAct, 1961.”

The said order has thereafter continued and is still in force.

5. In Civil Appeal Nos.7875-7879 of 2015, writ petition was filedbefore the Madras High Court by one A.K. Balaji, Advocate. Apartfrom official respondents, 32 law firms of U.K., U.S.A., France and A

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AAustralia have been impleaded as respondents 9 to 40. Prayer in thewrit petition is to take action against the original respondents 9 to 40 orany other foreign law firms or foreign lawyers illegally practicing theprofession of law in India and direct them to refrain from having anyillegal practice on the litigation side and in the field of commercialtransactions in any manner whatsoever.BPLEADINGS

6. Averments in the petition are that the writ petitioner was anadvocate enrolled with the Bar Council of Tamil Nadu. To practice lawin India, a person has to be Indian citizen and should possess degree inClaw from a recognized University in India. Nationals of other countriescould be admitted as advocates in India only if citizens of India arepermitted to practice in such other countries. Foreign degree of lawfrom a University outside India requires recognition by the Bar Councilof India. The Indian advocates are not allowed to practice in U.K.,U.S.A., Australia and other foreign nations except on fulfilling onerousDrestrictions like qualifying tests, experience, work permit. Foreignlawyers cannot be allowed to practice in India without reciprocity.

7. Under the Advocates Act (the Act), a foreigner is not entitledto practice in India in view of bar contained in Section 29. However,under the guise of LPOs (Legal Process Outsourcing), conductingEseminars and arbitrations, foreign lawyers are visiting India on VisitorVisa and practicing illegally. They also violate tax and immigration laws.They have also opened their offices in India for practice in the fields ofmergers, take-overs, acquisitions, amalgamations, etc. Disciplinaryjurisdiction of the Bar Council extends only to advocates enrolled underFthe Act. In India, the legal profession is considered as a noble professionto serve the society and not treated as a business but the foreign lawfirms treat the profession as trade and business venture to earn money.Indian lawyers are prohibited from advertising, canvassing and solicitwork but foreign law firms are advertising through websites and canvassand solicit work by assuring results. Many accountancy and managementGfirms are also employing graduates and thus rendering legal services.

8. The stand of the Union of India initially was that if foreign lawfirms are not allowed to take part in negotiations, settling of documentsand arbitrations in India, it will obstruct the aim of making India a hub ofinternational arbitration. Many arbitrations with Indian Judges as H

arbitrators and Indian lawyers are held outside India where foreign andIndian law firms advise their clients. Barring the entry of foreign lawfirms for arbitrations in India will result in many arbitrations shifting toSingapore, Paris and London, contrary to the declared policy of theGovernment and against national interest. However, its final stand inaffidavits dated 19[th] April, 2011 and 17[th] November, 2011 was differentas recorded in Para 3 of the High Court Judgment as follows :

“3 . The first respondent Union of India filed four counteraffidavits on 19.08.2010, 24.11.2010, 19.04.2011 and17.11.2011. In one of the counter affidavits, it is stated thatthe Bar Council of India, which has been established underthe Advocates Act, 1961, regulates the advocates who are onthe “Rolls”, but law firms as such are not required to registerthemselves before any statutory authority, nor do they requireany permission to engage in non-litigation practice.Exploiting this loophole, many accountancy and managementfirms are employing law graduates who are rendering legalservices, which is contrary to the provisions of the AdvocatesAct. It is stated that the Government of India along with theBar Council of India is considering this issue and is trying toformulate a regulatory framework in this regard. The 1[st]respondent in his counter warns that if the foreign law firmsare not allowed to take part in negotiations, settling updocuments and arbitrations in India, it will have a counterproductive effect on the aim of the government to make Indiaa hub of International Arbitration. In this connection, it isstated that many arbitrations with Indian Judges and Lawyersas Arbitrators are held outside India, where both foreign andIndian Law Firms advise their clients. If foreign law firms aredenied entry to deal with arbitrations in India, then India willlose many of the arbitrations to Singapore, Paris and London.It will be contrary to the declared policy of the governmentand against the national interest. In the counter affidavit filedon 19.04.2011, it is stated that a proposal to consider anamendment to Section 29 of the Advocates Act, 1961permitting foreign law firms to practice law in India in nonlitigious matters on a reciprocity basis with foreign countriesis under consultation with the Bar Council of India. Finally, AB

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Ain the counter filed on 17.11.2011, it is stated that theGovernment of India has decided to support the stand of theBar Council of India that the provisions of the Advocates Act,1961 would apply with equal force to both litigious and non-litigious practice of law, and it is only persons enrolled underSection 24 of the Act, who can practice before the IndianBCourts.”

(emphasis added)

9. In this Court, stand of the Union of India is that presently it iswaiting for the Bar Council of India to frame rules on the subject.CHowever, it can frame rules under Section 49A at any stage.

10. Stand of the Bar Council of India before the High Court isthat even non litigious practice is included in the practice of law whichcan be done only by advocates enrolled under the Act. Reliance wasplaced on the judgment of the Bombay High Court in Lawyers CollectiveD(supra). Further reference was made to Sections 24 and 29 of the Act.Section 47(2) read with Section 49(1)(e) provides for recognition ofqualifications of foreigners being recognized for practice. It wassubmitted that practice of foreign lawyers in India should be subject toregulatory powers of the Bar Council.

E11. Stand of the foreign law firms, inter alia, is that there is nobar to a company carrying on consultancy/support services in the fieldof protection and management of intellectual, business and industrialproprietary rights, carrying out market service and market research,publication of reports, journals etc. A person not appearing before Courtsor Tribunals and not giving legal advice cannot be said to be practice ofFlaw. The ninth respondent stated that it was a part of group of companiesand not a law firm and was duly registered under the Indian CompaniesAct, 1956. The tenth respondent, another foreign law firm, submittedthat there is no violation of law in giving advice on foreign law. EvenIndian lawyers are permitted to practice outside India and issue ofGreciprocity is a policy matter to be decided by the Government of India.It does not have a law office in India and does not give advice on Indianlaws. In England, foreign lawyers are free to advice on their own systemof law without nationality requirement or qualification of England. Theeleventh respondent is an American law firm and submitted that it advisesclients on international legal issues from different countries. Indian clients H

are given advice through Indian lawyers and law firms which are enrolledwith the Bar Council. There is no discrimination in U.S. against Indiancitizens practicing law. Indian lawyers travel to US on temporary basisfor consultation on Indian law issues.

12. The Act and the Bar Council Rules govern practice of Indianlaw and not foreign law. Participation in seminars and conferences doesnot constitute practice in law. The fourteenth respondent denied theexistence of its office in India and that it was practicing Indian law. Italso took the same stand as Respondent No.11 that regulatory frameworkfor advocates did not govern practice of foreign law. It denied that it isoperating a Legal Process Outsourcing office (LPOs) in India. Itslawyers fly in and fly out of India on need basis to advice clients oninternational transactions. To the extent Indian law is involved, suchmatters are addressed by Indian lawyers. If the foreign law firms areprevented from advice on foreign law, the transaction cost of Indianclients for consultation on foreign law will increase. Other foreign lawfirms have also taken more or less similar stand. Fifteenth respondentstated that it is a Business Process Outsourcing (BPO) company providingwide range of customized and integrated services and functions. Thesixteenth respondent also stated that it has no office in India and is onlyrendering services other than practice of Indian law. The eighteenthrespondent stated that it does not have any office in India and does notpractice law in India. It only advises on non Indian law. RespondentNos.19, 26, 39 and 40 stated that they are limited law partnerships underLaws of England. They do not have any law office in India. RespondentsNos.20, 21, 24, 25, 27, 28, 30, 31, 32, 33, 34 and 38 also stated that theydo not have any office in India and do not practice Indian law. Indianlawyers cannot advice on foreign laws and the requirement of Indianlitigants in regard is met by foreign lawyers. Its lawyers fly in and flyout of India on need basis to advise the clients on international transactions.To the extent Indian law is involved such matters are addressed by Indianlawyers.

13. The respondent No.22 stated that it is an international lawfirm but does not have any office in India. It advises clients on lawsother than Indian laws. Its India Practice Group advises clients oncommercial matters involving an “Indian Element” relating to mergers,acquisitions, capital markets, projects, energy and infrastructure, etc.from an international legal perspective and it does not amount to practice A

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Ain Indian law. Respondent No.23 stated that it is only advising on mattersof English, European Union and Hong Kong laws. It has workingrelationships with leading law firms in major jurisdictions and instructsappropriate local law firms to provide local law advice. RespondentNo.29 stated that it is a limited law partnership registered in England andWales and does not have office in India. It does not represent parties inBIndian courts nor advises on Indian law. Respondent No.35 stated thatit does not maintain any office in India and its expertise in internationallaw. 36[th] Respondent stated that it does not practice Indian law and hasno office in India nor it operates any LPO. Its lawyers fly in and fly outon need basis to advise clients on international transactions or mattersCinvolving Australian laws or international Benches to which there is anIndian component. Working of Indian laws is entrusted to Indian lawyers.The 37[th] Respondent denied that it has any office in India or is runningLPO in India. It only advises with respect to regulatory laws other thanIndian law.

DFINDINGS

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14. The High Court upheld the plea of the foreign law firms to theeffect that there was no bar to such firms taking part in negotiations,settling of documents and conducting arbitrations in India. There wasno bar to carrying on consultancy/support services in the field of protectionEand management of intellectual, business and industrial proprietary rights,carrying out market survey and research, publication of reports, journalsetc. without rendering any legal advice. This could not be treated aspractice of law in India. Referring to Section 2(1)(f) of the Arbitrationand Conciliation Act, 1996 (the Arbitration Act), it was observed that ifin international commercial arbitration, India is chosen as the seat ofFarbitration, the foreign contracting party is bound to seek assistance fromlawyers of their own country on the contract. There could be no prohibitionfor such foreign lawyers to advise their clients on the foreign law.

15. Judgment of the Bombay High Court in Lawyers Collective(supra) was distinguished on the ground that setting up of law offices forGlitigious and non litigious matters was different but if a foreign law firmwithout establishing any liaison office in India offers advice to their clientson foreign law, there was no legal bar to do so.

16. The Bombay High Court in its judgment observed:

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“44. It appears that before approaching RBI, these foreignlaw firms had approached the Foreign Investment PromotionBoard (FIPB for short) a High Powered body establishedunder the New Industrial Policy seeking their approval in thematter. The FIPB had rejected the proposal submitted by theforeign law firms. Thereafter, these law firms sought approvalfrom RBI and RBI granted the approval in spite of the rejectionof FIPB. Though specific grievance to that effect is made inthe petition, the RBI has chosen not to deal with thosegrievances in its affidavit in reply. Thus, in the present case,apparently, the stand taken by RBI & FIPB are mutuallycontradictory.

45. In any event, the fundamental question to be consideredherein is, whether the foreign law firms namely respondentNos. 12 to 14 by opening liaison offices in India could carryon the practise in non litigious matters without being enrolledas Advocates under the 1961 Act ?

46. Before dealing with the rival contentions on the abovequestion, we may quote Sections 29, 30, 33 and 35 of the1961 Act, which read thus:

29. Advocates to be the only recognised class of personsentitled to practice law. - Subject to the provisions of thisAct and any rules made there under, there shall, as fromthe appointed day, be only one class of persons entitled topractise the profession of law, namely, advocates. (notbrought into force so far)

30. Right of advocates to practise. -Subject to provisionsof this Act, every advocate whose name is entered in theState roll shall be entitled as of right to practise throughoutthe territories to which this Act extends,

(i) in all Courts including the Supreme Court;

(ii) before any tribunal or person legally authorized totake evidence;

(iii) before any other authority or person before whomsuch advocate by or under any law for the time being inforce entitled to practise.

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33 . Advocates alone entitled to practise. -Except asotherwise provided in this Act or in any other law for thetime being in force, no person shall, on or after theappointed day, be entitled to practice in any Court or beforeany authority or person unless he is enrolled as an advocateunder this Act.

35 . Punishment of advocates for misconduct - (1) Whereon receipt of a complaint or otherwise a State Bar Councilhas reason to believe that any advocate on its roll has beenguilty of professional or other misconduct, it shall referthe case for disposal to its disciplinary committee.

(1-A) The State Bar Council may, either of its own motionor on application made to it by any person interested,withdraw a proceeding pending before its disciplinarycommittee and direct the inquiry to be made by any otherdisciplinary committee of that State Bar Council.

(2) The disciplinary committee of a State Bar Council [***]shall fix a date for the hearing of the case and shall causea notice thereof to be given to the advocate concernedand to the Advocate-General of the State.

(3) The disciplinary committee of a State Bar Council aftergiving the advocate concerned and the Advocate-Generalan opportunity of being heard, may make any of thefollowing orders, namely:

(a) dismiss the complaint or, where the proceedings wereinitiated at the instance of the State Bar Council, directthat the proceedings be filed; (b) reprimand the advocate;

(c) suspend the advocate from practice or such periodas it may deem fit; (d) remove the name of the advocate from the State rollof advocates.

(4) Where an advocate is suspended from practice underClause (c) of Sub-section (3), he shall, during the periodof suspension, be debarred from practising in any Courtor before any authority or person in India.

(5) Where any notice is issued to the Advocate-Generalunder Subsection (2), the Advocate-General may appearbefore the disciplinary committee of the State Bar Councileither in person or through any advocate appearing onhis behalf. Explanation-In this section, (Section 37 andSection 38), the expressions “Advocate-General” and“Advocate-General of the State” shall, in relation to theUnion territory of Delhi, mean the Additional SolicitorGeneral of India.

47 . The argument of the foreign law firms is that Section 29of the 1961 Act is declaratory in nature and the said sectionmerely specifies the persons who are entitled to practise theprofession of law. According to the respondent Nos. 12 to 14,the expression ‘entitled to practise the profession of law’ inSection 29 of the 1961 Act does not specify the field in whichthe profession of law could be practised. It is Section 33 ofthe 1961 Act which provides that advocates alone are entitledto practise in any Court or before any authority or person.Therefore, according to respondent Nos. 12 to 14 the 1961Act applies to persons practising as advocates before anyCourt / authority and not to persons practising in non litigiousmatters. The question, therefore, to be considered is, whetherthe 1961 Act applies only to persons practising in litigiousmatters, that is, practising before Court and other authorities ?

48. In the statements of Objects & Reasons for enacting the1961 Act, it is stated that the main object of the Act is toestablish All India Bar Council and a common roll ofadvocates and Advocate on the common roll having a right topractise in any part of the country and in any Court, includingthe Supreme Court. Thus, from the Statement of Objects andReasons, it is seen that the 1961 Act is intended to apply to(one) persons practising the profession of law in any part ofthe country and (two) persons practising the profession oflaw in any Court including the Supreme Court. Thus, fromthe statement of objects and reasons it is evident that the 1961Act is intended to apply not only to the persons practisingbefore the Courts but it is also intended to apply to personswho are practising in non litigious matters outside the Court.

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49. Apart from the above, Section 29 of the 1961 Actspecifically provides is that from the appointed day, thereshall be only one class of persons entitled to practice theprofession of law, namely Advocates. It is apparent that priorto the 1961 Act there were different classes of persons entitledto practise the profession of law and from the appointed dayall these class of persons practising the profession of law,would form one class, namely, advocates. Thus, Section 29 ofthe 1961 Act clearly provides that from the appointed dayonly advocates are entitled to practise the profession of lawwhether before any Court / authority or outside the Court byway of practise in non litigious matters.

50. Section 33 of the 1961 Act is a prohibitory section in thesense that it debars any person from appearing before anyCourt or authority unless he is enrolled as an advocate underthe 1961 Act. The bar contained in Section 33 of the 1961 Acthas nothing to do with the persons entitled to be enrolled asadvocates under Section 29 of the 1961 Act. A person enrolledas an advocate under Section 29 of the 1961 Act, may or maynot be desirous of appearing before the Courts. He may beinterested in practising only in non litigious matters. Therefore,the bar under Section 33 from appearing in any Court (exceptwhen permitted by Court under Section 32 of the 1961 Act orany other Act) unless enrolled as an advocate does not bar aperson from being enrolled as an advocate under Section 29of the 1961 Act for practising the profession of law in nonlitigious matters. The Apex Court in the case of Ex-Capt.Harish Uppal (supra) has held that the right to practise is thegenus of which the right to appear and conduct cases in theCourt may be a specie. Therefore, the fact that Section 33 ofthe 1961 Act provides that advocates alone are entitled topractice before any Court / authority it cannot be inferredthat the 1961 Act applies only to persons practising in litigiousmatters and would not apply to person practising in nonlitigious matters.

51. It was contended that the 1961 Act does not contain anypenal provisions for breaches committed by a personpracticing in non-litigious matter and, therefore, the 1961

Act cannot apply to persons practising in non-litigious matters.There is no merit in this contention, because, Section 35 ofthe 1961 Act provides punishment to an advocate who is foundto be guilty of professional or other misconduct. The fact thatSection 45 of the 1961 Act provides imprisonment for personsillegally practicing in Courts and before other authorities, itcannot be said that the 1961 Act does not contain provisionsto deal with the persons found guilty of misconduct whilepractising in non litigious matters. Once it is held that thepersons entitled to practice the profession of law under the1961 Act covers the persons practising the profession of lawin litigious matters as well as non-litigious matters, then, thepenal provisions contained in Section 35 of the 1961 Act wouldapply not only to persons practising in litigious matter, butwould also apply to persons practising the profession of lawin non-litigious matters. The very object of the 1961 Act andthe Rules framed by the Bar Council of India are to ensurethat the persons practising the profession of law whether inlitigious matters or in non litigious matters, maintain highstandards in professional conduct and etiquette and,therefore, it cannot be said that the persons practising in nonlitigious matters are not governed by the 1961 Act.

52. Strong reliance was placed by the counsel for therespondent No. 12 on the decision of the Apex Court in thecase of O.N. Mohindroo (supra) in support of his contentionthat the 1961 Act applies only to persons practising theprofession of law before Courts / Tribunals / other authorities.It is true that the Apex Court in the above case has held thatthe 1961 Act is enacted by the Parliament in exercise of itspowers under entry 77 and 78 in List I of the Seventh Scheduleto the Constitution. However, the fact that entry 77 and 78 inList I refers to the persons practising before the SupremeCourt and the High Courts, it cannot be said that the 1961Act is restricted to the persons practising only before theSupreme Court and High Courts. Practising the professionof law involves a larger concept whereas, practising beforethe Courts is only a part of that concept. If the literalconstruction put forth by the respondents is accepted then, AB

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the Parliament under entry 77 & 78 in List I of the SeventhSchedule to make legislation only in respect of the advocatespracticing before the Supreme Court / High Courts and theParliament cannot legislate under that entry in respect ofadvocates practising before the District Courts/ Magistrate’sCourts / other Courts / Tribunals / authorities and consequently,the 1961 Act to the extent it applies to advocates practising inCourts other than the High Courts and Supreme Court wouldbe ultra vires the Constitution. Such a narrow construction isunwarranted because, once the Parliament invokes its powerto legislate on advocates practising the profession of law, thenthe entire field relating to advocates would be open to theParliament to legislate and accordingly the 1961 Act has beenenacted to cover the entire field. In any event, the question asto whether the persons practicing the profession of lawexclusively in non-litigious matters are covered under the 1961Act, or not was not an issue directly or indirectly consideredby the Apex Court in the case of O.N. Mohindroo (supra).Therefore, the decision of the Apex Court in the above casedoes not support the case of the contesting respondents.

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55. It was contended by the counsel for Union of India that ifit is held that the 1961 Act applies to persons practising innon-litigious matters, then no bureaucrat would be able todraft or give any opinion in non-litigious matters without beingenrolled as an advocate. There is no merit in the aboveargument, because, there is a distinction between a bureaucratdrafting or giving opinion, during the course of his employmentand a law firm or an advocate drafting or giving opinion tothe clients on professional basis. Moreover, a bureaucratdrafting documents or giving opinion is answerable to hissuperiors, whereas, a law firm or an individual engaged innon litigious matters, that is, drafting documents / givingopinion or rendering any other legal assistance areanswerable to none. To avoid such anomaly, the 1961 Act hasbeen enacted so as to cover all persons practising theprofession of law be it in litigious matters or in non-litigiousmatters within the purview of the 1961 Act.

56. The argument that the 1961 Act and the Bar Councilsconstituted there under have limited role to play has beentime and again negatived by the Apex Court. Recently, theApex Court in the case of Bar Council of India v. Board ofManagement, Dayanand College of Law reported in MANU/SC/5219/2006 : (2007) 2 SCC 202 held thus:

It may not be correct to say that the Bar Council of India istotally unconcerned with the legal education, thoughprimarily legal education may also be within the provinceof the universities. But, as the apex professional body, theBar Council of India is concerned with the standards ofthe legal profession and the equipment of those who seekentry into that profession. The Bar Council of India is alsothus concerned with the legal education in the country.Therefore, instead of taking a pendantic view of thesituation, the State Government and the recommendingauthority are expected to ensure that the requirement setdown by the Bar Council of India is also complied with.

Thus, when efforts are being made to see that the legalprofession stand tall in this fast changing world, it wouldbe improper to hold that the 1961 Act and the Bar Councilconstituted there under have limited role to play in the fieldrelating to practising the profession of law.

57. It is not in dispute that once a person is enrolled as anadvocate, he is entitled to practise the profession of law inlitigious matters as well as non-litigious matters. If theargument of the respondents that the 1961 Act is restricted tothe persons practising the profession of law in litigious mattersis accepted, then an advocate found guilty of misconduct inperforming his duties while practising in non-litigious matterscannot be punished under the 1961 Act. Similarly, where anadvocate who is debarred for professional misconduct canmerrily carry on the practise in nonlitigious matters on theground that the 1961 Act is not applicable to the personspractising the profession of law in non litigious matters. Suchan argument which defeats the object of the 1961 Act cannotbe accepted.

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58. It may be noted that Rule 6(1) in Chapter III Part VI ofthe Bar Council of India Rules framed under Section 49(1)(ah) of the 1961 Act provides that an advocate whose namehas been removed by an order of the Supreme Court or aHigh Court or the Bar Council as the case may be, shall notbe entitled to practise the profession of law either before theCourt and authorities mentioned under Section 30 of the 1961Act, or in chambers, or otherwise. The above rule clearly showsthat the chamber practise, namely, practise in non litigiousmatters is also within the purview of the 1961 Act.

59 . Counsel for the Union of India had argued that theCentral Government is actively considering the issue relatingto the foreign law firms practising the profession of law inIndia. Since the said issue is pending before the CentralGovernment for more than 15 years, we direct the CentralGovernment to take appropriate decision in the matter asexpeditiously as possible. Till then, the 1961 Act as enactedwould prevail, that is, the persons practising the professionof law whether in litigious matters or non litigious matterswould be governed by the 1961 Act and the Bar Councilsframed there under, apart from the powers of the Court totake appropriate action against advocates who are foundguilty of professional misconduct.

60. For all the aforesaid reasons, we hold that in the facts ofthe present case, the RBI was not justified in grantingpermission to the foreign law firms to open liaison offices inIndia under Section 29 of the 1973 Act. We further hold thatthe expressions ‘ to practise the profession of law’ in Section29 of the 1961 Act is wide enough to cover the personspractising in litigious matters as well as persons practising innon litigious matters and, therefore, to practise in non litigiousmatters in India, the respondent Nos. 12 to 14 were bound tofollow the provisions contained in the 1961 Act. The petitionis disposed of accordingly with no order as to costs.”

17. The Madras High Court agreed with the above view as follows :

“44. As noticed above, the facts of the case before the BombayHigh Court were that the respondents which were foreign lawfirms practising the profession of law in US/UK sought permission to open their liaison office in India and renderlegal assistance to another person in all litigious and non-litigious matters. The Bombay High Court, therefore, rightlyheld that establishing liaison office in India by the foreignlaw firm and rendering liaisoning activities in all forms cannotbe permitted since such activities are opposed to the provisionsof the Advocates Act and the Bar Council of India Rules. Wedo not differ from the view taken by the Bombay High Courton this aspect.”

18. The Madras High Court after above observation proceededto consider the matter as follows:

“45 . However, the issue which falls for consideration before thisCourt is as to whether a foreign law firm, without establishing anyliaison office in India visiting India for the purpose of offeringlegal advice to their clients in India on foreign law, is prohibitedunder the provisions of the Advocates Act. In other words, thequestion here is, whether a foreign lawyer visiting India for atemporary period to advise his client on foreign law can be barredunder the provisions of the Advocates Act. This issue was neitherraised nor answered by the Bombay High Court in the aforesaidjudgment.”

19. It was held :

“51. We find force in the submission made by the learnedcounsel appearing for the foreign law firms that if foreignlaw firms are not allowed to take part in negotiations, forsettling up documents and conduct arbitrations in India, itwill have a counter productive effect on the aim of theGovernment to make India a hub of International Arbitration.According to the learned counsel, many arbitrations withIndian Judges and Lawyers as Arbitrators are held outsideIndia, where both foreign and Indian law firms advise theirclients. If foreign law firms are denied entry to deal witharbitrations in India, then India will lose many of thearbitrations to foreign countries. It will be contrary to thedeclared policy of the Government and against the nationalinterest. Some of the companies have been carrying onconsultancy/support services in the field of protection andmanagement of intellectual, business and industrial AB

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proprietary rights, carrying out market surveys and marketresearch and publication of reports, journals, etc. withoutrendering any legal service, including advice in the form ofopinion, but they do not appear before any courts or tribunalsanywhere in India. Such activities cannot at all be consideredas practising law in India. It has not been controverted thatin England, foreign lawyers are free to advice on their ownsystem of law or on English Law or any other system of lawwithout any nationality requirement or need to be qualifiedin England.

52. Before enacting the Arbitration and Conciliation Act,1996 the Law Commission of India, several representativebodies of trade and industry and experts in the field ofarbitration have proposed amendments to the Act to make itmore responsive to contemporary requirements. It was alsorecognised that the economic reforms in India may not fullybecome effective if the law dealing with settlement of bothdomestic and international commercial disputes remains outof tune with such reforms. The United Nations Commissionon International Trade Law (UNCITRAL) adopted in 1985the Model Law on International Commercial Arbitration. TheArbitration and Conciliation Act is, therefore, consolidatedand amended to the law relating to domestic and internationalcommercial arbitration as well as for the enforcement offoreign arbitral award. The Act was enacted as a measure offulfilling India’s obligations under the International Treatiesand Conventions. On account of the growth in theinternational trade and commerce and also on account oflong delays occurring in the disposal of suits and appeals incourts, there has been tremendous movement towards theresolution of disputes through alternative forum of arbitrators.

53. Section 2(1)(f) of the Act defines the term “InternationalCommercial Arbitration” as under:- (f) International Commercial Arbitration means anarbitration relating to disputes arising out of legalrelationships, whether contractual or not, consideredas commercial under the law in force in India and whereat least one of the parties is

(i) an individual who is a national of, or habitually residentin, any country other than India; or

(ii) a body corporate which is incorporated in any countryother than India; or

(iii) a company or an association or a body of individualswhose central management and control is exercised inany country other than India; or

(iv) the Government of a foreign country.

54. From the above definition, it is manifestly clear that anyarbitration matter between the parties to the arbitrationagreement shall be called an “international commercialarbitration” if the matter relates to the disputes, which mayor may not be contractual, but where at least one of the partieshabitually resides abroad whether a national of that countryor not. The New York Convention will apply to an arbitrationagreement if it has a foreign element or flavour involvinginternational trade and commerce, even though such anagreement does not lead to a foreign award.

55. International arbitration is growing big time in India andin almost all the countries across the globe. India is a signatoryto the World Trade Agreement, which has opened up the gatesfor many international business establishments based indifferent parts of the world to come and set up their respectivebusinesses in India.

56 . Large number of Indian Companies have been reachingout to foreign destinations by mergers, acquisition or directinvestments. As per the data released by the Reserve Bank ofIndia during 2009, the total out ward investment from Indiaexcluding that which was made by Banks, had increased29.6% to U.S. Dollar 17.4 billion in 2007-08 and India isranked third in global foreign direct investment. Overseasinvestments in joint ventures and wholly owned subsidiarieshave been recognized as important avenues by IndianEntrepreneurs in terms of foreign exchange earning likedividend, loyalty, etc. India is the 7th largest, the second mostpopulated country and the fourth largest economy in theworld. Various economic reforms brought about have made A

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India grow rapidly in the Asia-Pacific Region, and the IndianPrivate Sector has offered considerable scope for foreigndirect investment, joint-venture and collaborations.Undoubtedly, these cross-border transactions and investmentswould give bigger opportunities for members of the legalfraternity, in order to better equip themselves to face thechallenges. It is common knowledge that in the recent past,parties conducting International Commercial Arbitrationshave chosen India as their destination. The arbitration lawin India is modelled on the lines of the UNCITRAL ModelLaw of Arbitration and makes a few departures from theprinciples enshrined therein. The Arbitration and ConciliationAct 1996, provides for international commercial arbitrationwhere at least one of the parties is not an Indian National orBody corporate incorporated in India or a foreignGovernment.

57. Institutional Arbitration has been defined to be anarbitration conducted by an arbitral institution in accordancewith the rules of the institution. The Indian Council ofArbitration is one such body. It is reported that in severalcases of International Commercial Arbitration, foreigncontracting party prefers to arbitrate in India and severalreasons have been stated to choose India as the seat ofarbitration. Therefore, when there is liberalization of economicpolicies, throwing the doors open to foreign investments, itcannot be denied that disputes and differences are bound toarise in such International contracts. When one of thecontracting party is a foreign entity and there is a bindingarbitration agreement between the parties and India is chosenas the seat of arbitration, it is but natural that the foreigncontracting party would seek the assistance of their ownsolicitors or lawyers to advice them on the impact of the lawsof their country on the said contract, and they may accompanytheir clients to visit India for the purpose of the Arbitration.Therefore, if a party to an International CommercialArbitration engages a foreign lawyer and if such lawyers cometo India to advice their clients on the foreign law, we seethere could be no prohibition for such foreign lawyers toadvise their clients on foreign law in India in the course of a International Commercial transaction or an InternationalCommercial Arbitration or matters akin thereto. Therefore, toadvocate a proposition that foreign lawyers or foreign lawfirms cannot come into India to advice their clients on foreignlaw would be a far fetched and dangerous proposition andin our opinion, would be to take a step backward, when Indiais becoming a preferred seat for arbitration in InternationalCommercial Arbitrations. It cannot be denied that we have acomprehensive and progressive legal frame work to supportInternational Arbitration and the 1996 Act, provides formaximum judicial support of arbitration and minimalintervention. That apart, it is not in all cases, a foreigncompany conducting an International Commercial Arbitrationin India would solicit the assistance of their foreign lawyers.The legal expertise available in India is of Internationalstandard and such foreign companies would not hesitate toavail the services of Indian lawyers. Therefore, the need tomake India as a preferred seat for International CommercialArbitration would benefit the economy of the country.

58. The Supreme Court in a recent decision in VodafoneInternational Holdings B.V. vs. Union of India and another,SLP(C) No.26529 of 2010, dated 20.01.2012, observed thatevery strategic foreign direct investment coming to India, asan investment destination should be seen in a holistic manner.The Supreme Court observed that the question involved inthe said case was of considerable public importance,especially on Foreign Direct Investment, which is indispensablefor a growing economy like India. Therefore, we should notlose site of the fact that in the overall economic growth of thecountry, International Commercial Arbitration would play avital part. The learned counsel appearing for the foreign lawfirms have taken a definite stand that the clients whom theyrepresent do not have offices in India, they do not advisetheir foreign clients on matters concerning Indian Law, butthey fly in and fly out of India, only to advise and hand-holdtheir clients on foreign laws. The foreign law firms, who arethe private respondents in this writ petition, have acceptedthe legal position that the term “practice” would include bothlitigation as well as non-litigation work, which is better known AB

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as chamber practice. Therefore, rendering advice to a clientwould also be encompassed in the term “practice”.

59. As noticed above, Section 2(a) of the Advocates Actdefines ‘Advocate’ to mean an advocate entered in any rollunder the provisions of the Act. In terms of Section 17(1) ofthe Act, every State Bar Council shall prepare and maintain aroll of Advocates, in which shall be entered the names andaddresses of (a) all persons who were entered as an Advocateon the roll of any High Court under the Indian Bar CouncilAct, 1926, immediately before the appointed date and (b) allother persons admitted to be Advocates on the roll of the StateBar Council under the Act on or after the appointed date. Interms of Section 24(1) of the Act, subject to the provisions ofthe Act and the Rules made thereunder, a person shall bequalified to be admitted as an advocate on a state roll if hefulfils the conditions (a) a citizen of India, (b) has completed21 years of age and (c) obtained a degree in Law. The provisoto Section 24(1)(a) states that subject to the other provisionsof the Act, a National of any other country may be admittedas an Advocate on a State roll, if a citizen of India, dulyqualified is permitted to practice law in that other country. Interms of Section 47(1) of the Act, where any country specifiedby the Central Government by notification prevents citizensof India practicing the profession of Law or subjects them tounfair discrimination in that country, no subject of any suchcountry shall be entitled to practice the profession of Law inIndia. In terms of Sub-Section (2) of Section 47, subject tothe provision of Sub-Section (1), the Bar Council of Indiamay prescribe conditions, if any, subject to which foreignqualifications in law obtained by persons other than citizensof India shall be recognized for the purpose of admission asan Advocate under the Act. Thus, Section 47 deals withreciprocity. As per the statement of objects and reasons of theAdvocates Act, it was a law enacted to provide one class oflegal practitioners, specifying the academic and professionalqualifications necessary for enrolling as a practitioner ofIndian Law, and only Indian citizens with a Law Degree froma recognized Indian University could enrol as Advocatesunder the Act. The exceptions are provided under the proviso to Section 24(1)(a), Section 24(1)(c)(iv) and Section 47(2).In the light of the scheme of the Act, if a lawyer from a foreignlaw firm visits India to advice his client on matters relating tothe law which is applicable to their country, for which purposehe “flies in and flies out” of India, there could not be a barfor such services rendered by such foreign law firm/foreignlawyer.

60. We are persuaded to observe so, since there may be severaltransactions in which an Indian company or a person ofIndian origin may enter into transaction with a foreigncompany, and the laws applicable to such transaction are thelaws of the said foreign country. There may be a necessity toseek legal advice on the manner in which the foreign lawwould be applied to the said transaction, for which purposeif a lawyer from a foreign law firm is permitted to fly intoIndia and fly out advising their client on the foreign law, itcannot be stated to be prohibited. The corollary would bethat such foreign law firm shall not be entitled to do any formof practice of Indian Law either directly or indirectly. Theprivate respondents herein, namely the foreign law firms, haveaccepted that there is express prohibition for a foreign lawyeror a foreign law firm to practice Indian Law. It is pointed outthat if an interpretation is given to prohibit practice of foreignlaw by a foreign law firms within India, it would result in amanifestly absurd situation wherein only Indian citizens withIndian Law degree who are enrolled as an advocate underthe Advocates Act could practice foreign law, when the factremains that foreign laws are not taught at graduate level inIndian Law schools, except Comparative Law Degree Coursesat the Master’s level.

61. As noticed above, the Government of India, in theircounter affidavit dated 19.08.2010, have stated that thecontention raised by the petitioner that foreign law firmsshould not be allowed to take part in negotiating settlements,settling up documents and arbitrations will be counterproductive, as International Arbitration will be confined to asingle country. It is further pointed out that many arbitrationsare held outside India with Indian Judges and Lawyers as A

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SUPREME COURT REPORTS

Arbitrators where both foreign and Indian Law firms advisetheir clients. It has been further stated if foreign law firmsare denied permission to deal with arbitration in India, thenwe would lose many arbitrations to other countries and thisis contrary to the declared policy of the Government and willbe against the National interest, especially when theGovernment wants India to be a hub of InternationalArbitration

62. At this juncture, it is necessary to note yet anothersubmission made by the Government of India in their counter.It has been stated that law firms as such or not required toregister themselves or require permission to engage in non-litigation practice and that Indian law firms elsewhere areoperating in a free environment without any curbs orregulations. It is further submitted that the oversight of theBar Council on non-litigation activities of such law firms wasvirtually nil till now, and exploiting this loop hole, many accountancy and management firms are employing lawgraduates, who are rendering legal services, which is contraryto the Advocates Act. Therefore, the concern of theGovernment of India as expressed in the counter affidavitrequires to be addressed by the Bar Council of India. Further,it is seen that the Government in consultation with the BarCouncil of India proposes to commission a study as to thenature of activities of LPOs, and an appropriate decisionwould be taken in consultation with the Bar Council of India.”

RIVAL CONTENTIONS

RIVAL CONTENTIONS

20. Shri C.U. Singh, learned senior counsel for the Bar Council ofIndia submitted that Advocates enrolled with the Bar Council of Indiaare the only recognized class of persons entitled to practice law in India.Unless any other law so permits, no person can practice before any‘Court, authority or person’ other than an Advocate enrolled under theAct. In particular cases, the ‘Court, authority or person’ may permit aperson other than an advocate enrolled under the Act to appear beforehim. It was submitted that the expression “practice profession of law”covered not only appearance before the Court but also opinion workwhich is also known as chamber practice. The Ethics prescribed by theBar Council of India covered not only conduct in appearing before Court or authority but also in dealing with the clients including giving legalopinion, drafting or participation in law conference. If a person practicesbefore any ‘Court, authority or person’ illegally, is liable to punishmentfor imprisonment which may extend to six months. Thus, the view takenby the Madras High Court that visit by a foreign lawyer on fly in and flyout basis to give advice on foreign law or to conduct arbitration ininternational commercial arbitrations was erroneous. Reference hasalso been made to definition of the term ‘advocate’ under Section 2(a)of the Act. Section 6 lays down functions of the Bar Council includingadmission of persons as advocates, safeguarding rights, privileges andinterests of advocates. Section 17 lays down that every State Bar Councilshall prepare a roll of advocates and no person can be enrolled in morethan one State Bar Council. Section 24 lays down qualifications foradmission on the roll of a State Bar council. The qualifications includethe citizenship of India, unless a person is national of a country wherecitizens of India are permitted to practice. One is required to have theprescribed qualification from India or out of India if such degree isrecognized by the Bar Council of India, being a Barrister called to theBar before 31[st] December, 1976, passing of articled clerks examinationor any other examination specified by the Bombay or Calcutta HighCourt or obtaining foreign qualification recognized by the Bar Council ofIndia are also the prescribed qualifications. It was submitted that evenin other jurisdictions, persons other than those enrolled with the concernedBar Council are not allowed to practice. Even short term running oflegal service is subject to regulatory regime.

21. Learned counsel for the foreign law firms S/Shri Arvind Datar,Sajjan Poovayya, Dushyant Dave, learned senior counsel and Mr. NakulDewan, learned counsel supported the direction of the Madras HighCourt permitting foreign lawyers to render legal services on fly in andfly out basis and also with reference to international commercialarbitrations. It was submitted that Bar Council could come into pictureonly in respect of advocates enrolled with it. It is only with reference toappearance before the Courts or other authorities or persons that theregulatory regime of the Bar Council may apply but with regard to nonlitigation/advisory work even those not enrolled as advocates under theAdvocates Act are not debarred. It was also submitted by Shri Dewanthat Advocates Act applies only to individuals and not to law firms.Provision for reciprocity applies only for enrolment under the AdvocatesAct and not for casual legal services on fly in and fly out basis or in AB

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Aconnection with international commercial arbitration. Foreign lawyersare regulated by the disciplinary regime applicable to them and onlytheir Bar Councils could take action with regard to their working in Indiaalso. Practice of law in India did not cover advising on foreign law.Thus, if by a pre-determined invitation, a foreign lawyer visited India toadvise on a foreign law, there is no bar against doing so.B

22. Certain decisions have been cited at the Bar to which referencemay be made. In Roel versus New York County Lawyers Association[3],the Court of Appeals of the State of New York dealt with a case wherea Mexican citizen and lawyer, who was not a citizen of the United Statesnor a member of the New York Bar, maintained his office in New YorkCand advised members of the public on Mexican law. He did not give anyadvice as to New York law. The majority held that this was notpermissible. It was observed:

“To allow a Mexican lawyer to arrange the institution ofdivorce proceedings for a New York resident in a Mexicancourt, without allowing him to tell the client that the divorcemight be invalid (Querze v. Querze, 290 N.Y. 13) or that itmight adversely affect estate or other property rights or statusin this State (Matter of Rathscheck, 300 N.Y. 346), is to giveutterly inadequate protection to him (See 70 Harv.L.Rev. 1112-1113). Nor are we in anywise persuaded by the argument inthe brief of the Association of the Bar that there is anydifference between the right of a Mexican lawyer to act andadvise the public in divorce matters and the right (3 N.Y.2d232) of foreign lawyers generally to act an advise with respectto foreign law. … …

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The complex problem posed by the activities of foreignattorneys here is a long-standing one. It may well be thatforeign attorneys should be licensed to deal with clients inmatters exclusively concerning foreign law, but that is solelywithin the province of the Legislature. Our courts are givenGmuch control over the lawyers admitted to the Bar of our State;we have no control, however, over those professing to be foreignlaw experts.

We see no substance in appellant’s claim that section 270 ofthe Penal Law when applied to him deprives him of liberty3 3 N.Y.2d 224 (1957)H

and property without due process of law, in that the statute asso construed is unreasonable and serves no public purpose.”

23. The minority view, on the other hand, held that:

“In this century when the United States has become thecreditor nation of the world and when the ramifications ofour industrial, commercial, financial and recreational livesextend to every corner of the global, it is especially improbablethat the Legislature intended to preclude the giving of legaladvice in this State to our citizens concerning these far-flungenterprises by trained lawyers from abroad who are equippedto give accurate information and opinions regarding them.The customary residential requirements for admission to theBar would in themselves often preclude their becomingadmitted to our Bar. … …

The omission of the Legislature to enact statutes licensing orregulating the conduct of foreign lawyers in practicing purelyforeign law in this State, does not indicate that such conductis prohibited by sections 270 and 271 of the Penal Law, butmerely that the Legislature has not seen fit to subject them toregulation. Whatever the merits of such proposed legislation,it is not for us to enact it. If foreign lawyers came undersection 270 and 271 of the Penal Law, it would stifle theiractivities to the detriment of the large and increasing numberof our nationals who engage in transactions in foreigncountries, inasmuch as it would be impossible for most ofthem to be admitted to practice in this State.”

24. In Appell versus Reiner[4], the Supreme Court of New Jerseydealt with a case of New York lawyer, who was not admitted to theNew Jersey Bar, giving legal services to New Jersey residents in amatter involving the extension of credit and the compromise of claimsheld by New York and New Jersey creditors. The Chancery Divisionheld that the New York lawyer could not advice in respect of NewJersey creditors. The Supreme Court of New Jersey held:- “The Chancery Division correctly delineated the generallycontrolling principle that legal services to be furnished toNew Jersey residents relating to New Jersey matters may be4 43 N.J. 313 (1964); 204 A.2d 146

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furnished only by New Jersey counsel. We neverthelessrecognize that there are unusual situations in which a strictadherence to such a thesis is not in the public interest. In thisconnection recognition must be given to the numerous multi-state transactions arising in modern times. This is particularlytrue of our State, situated as it is in the midst of the financialand manufacturing center of the nation. An inflexibleobservance of the generally controlling doctrine may welloccasion a result detrimental to the public interest, and itfollows that there may be instances justifying such exceptionaltreatment warranting the ignoring of state lines. This is sucha situation. Under the peculiar facts here present, having inmind the nature of the services to be rendered, theinseparability of the New York and New Jersey transactions,and the substantial nature of the New York claim, we concludethat plaintiff’s agreement to furnish services in New Jerseywas not illegal and contrary to public policy.

It must be remembered that we are not here concerned withany participated by plaintiff in a court proceeding. What isinvolved is the rendering of advice and assistance in obtainingextensions of credit and compromises of indebtedness. … …”

25. Again, there was a dissenting view as follows:

“… …Regulation of the interests of the public and the barrequires a rule of general application. In cases such as wehave here, the only fair and workable rule is one whichrecognizes that the client’s matter is primarily a New Jerseyone and calls for the engagement of a member of our bar forthe legal services to be rendered here. And, in that connection,in the interest of interstate amity, if an out-of-state attorneyrenders legal services in New Jersey which are a minor orincidental part of a total problem which has its principal andprimary aspects in his state, he should be allowed to recoverin our courts for the work done in this jurisdiction.”

26. Mr. Poovayya referred to Rules of the Indian Council ofArbitration which could apply only if there was an agreement betweenthe parties that the arbitration was to be in accordance with the Rules ofthe Indian Council of Arbitration. Rule 45 laid down that parties have no right to be represented by lawyers unless the arbitral tribunal considersit necessary and allows.

27. Referring to the Arbitration Act, it was submitted thatinternational commercial arbitration is defined under Section 2(f) whichcovers arbitration relating to disputes where one of the parties is a nationalor habitual resident of a country other than India or a body corporateincorporated outside India or an association of body of individuals whosemanagement and control is exercised in a country other than India or aGovernment of a foreign country. In such cases, parties may agree tohave an arbitrator of any nationality, to any language to be used inarbitration proceedings, to any place of arbitration. Section 28(b) permitsArbitral Tribunal to decide disputes in accordance with rules of lawapplicable to the substance of the dispute as agreed by the parties. Thearbitrator has to give equal opportunity to the parties to present theircase (Section 18). Parties can agree on the procedure to be followed(Section 19). Section 34(2)(a)(iii) provides that an award may be setaside, inter-alia, on the ground that the party was unable to present itscase in the arbitration proceedings. Procedure for presenting case of aparty before the arbitrator may be governed by agreement or by theprocedural rules.

28. Shri Dushyant Dave referred to rules of certain ArbitrationInstitutions to the effect that the parties are free to be represented by anoutside lawyer. It was submitted that by way of Convention in internationalcommercial arbitrations, there cannot be any compulsion to engage onlya local lawyer. Section 48(1)(b) of the Arbitration Act provides thatenforcement of a foreign award can be refused if the parties were unableto present their case. The New York Convention Awards are governedby the First Schedule to the Act. Article-II provides for recognition ofan arbitration agreement between the parties. Article-V(1)(b) providesthat if the party against whom the award is invoked was not given propernotice or could not present his case, the award cannot be enforced.Section 53 of the Arbitration Act refers to Geneva Convention Awardswhich is regulated by the Second Schedule to the Act containing similarprovisions.

29. Mr. Dave submitted that the Special Leave Petition arisingout of the Delhi High Court order is on the question whether LondonCourt of International Arbitration could use the expression “COURT”

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Ahad become infructuous as the respondent had closed its working inIndia. He, however, referred the following:

I) Handbook of ICC Arbitration – Commentary, Precedents,Materials – Second Edition (Michael W. Buhler and ThomasH. Webster)

B

Article 21(4): “The parties may appear in person or throughduly authorized representatives. In addition, they may beassisted by advisers.”

The authors’ comment is as follows:

C“In an ICC arbitration, parties have the right to be representedby the persons of their choice. A distinction should howeverbe made between “authorized representatives” and“advisors”. Usually, the parties have attorneys represent themin the arbitration. Thus, an attorney may have bothcapacities, but this may not always be the case. As an adviser,Dhe or she would not need a power of attorney. On the otherhand, as a representative of a party, he or she might need apower of attorney. In arbitration. The major centres ofarbitration do not appear to have restrictions on the right oflawyers from other countries to argue cases in those countries,with the possible exception of California.”

E

The footnote 31 is as follows:

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The footnote 31 is as follows:

“See Birbower, Montabano, Condon & Frank, P.C. v. TheSuperior Court of Santa Clara, 949 P.2d 1 (Cal. 1998); seealso Holtzmann and Donovan, “United States CountryReport” in ICCA Handbook, Supp. 28 (Paulsson edn, 1999).The California Rules of Court were modified in 2004 in orderto permit any US qualified lawyer to represent a party in anarbitration (r.966). However, it remains unclear whetherlawyers admitted to foreign bars can represent parties innational or international arbitration.”

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II) Arbitration of Commercial Disputes – International andEnglish Law and Practice (Andrew Tweeddale and KerenTweeddale).

Representation of the parties

10.15. The right to legal representation at trial has existedboth in the common law and in international treaties forcenturies[5]. However, the right to legal representation is notabsolute. The parties may agree to dispense with legalrepresentation[6]. Furthermore, some rules of arbitrationprohibit the use of legal representation[7]. In internationalcommercial arbitrations it is generally accepted that the partiesmay choose their own advocate without necessarily choosingone qualified at the seat of the arbitration[8][8]. However, in afew recent cases that principle has been challenged[9].”

5 See, for example, art 42 of the Statute of the International Court of Justice whichstates: ‘1. The parties shall be represented by agents. 2. They may have the assistanceof counsel or advocates before the Court. 3. The agents, counsel, and advocates ofparties before the Court shall enjoy the privileges and immunities necessary to theindependent exercise of their duties.’ See also art 37 of the Hague Convention 1899which states: ‘The parties have the right to appoint delegates or special agents toattend the Tribunal, for the purpose of serving as intermediaries between them and theTribunal. They are further authorized to retain, for the defense of their rights andinterests before the Tribunal, counsel or advocates appointed by them for this purpose.’6 Henry Bath & Son Ltd. v. Birgby Products [1962] Lloyd’s Rep 389; and see also theEnglish Arbitration Act 1996, s 36.

7 The arbitration rules of the Australian Football league, for example, limit legalrepresentation.

8 See, for example, In the matter of an Arbitration between Lawler, Matusky and Skelly,Engineers and the Attorney General of Barbados (No.320 of 1981) 22 August 1983where the High Court of Barbados held that there was a ‘common law right of everyonewho is sui juris to appoint an agent for any purpose’. The court held that this includedthe right to appoint a representative to appear as advocate on a party’s behalf in acommercial arbitration.

9 In the matter of an Arbitration between Builders Federal (Hong Kong) Ltd. andJoseph Gartner & Co., and Turner (East Asia) Pte Ltd (No. 90 of 1987) (1988) 2 MLJ280 the Malaysian Judicial Commissioner Chan Sek Keong ruled that the respondents,who were a foreign company, could not select a counsel from their own country becauseSingapore’s Legal Profession Act operated as a bar to foreign lawyers from representingtheir clients in international arbitrations in Singapore. However, in June 2004 Singaporefinally amended its Legal Profession Act to eliminate this restriction on representationby foreign lawyers in arbitrations in Singapore. See also Birbrower, Montabano, Condon& Frank v. Superior Court of Santa Clara County, 1998 Cal LEXIS 2, 1998 WL 1346(Cal 1/5/98) where the court held that a New York lawyer representing a client in aCalifornian arbitration was not qualified to act for his client because he was not calledto the Californian bar and therefore not entitled to recover his fees. The court, however,stated that this principle would not apply to an international commercial arbitration.

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AIII) Redfern and Hunter on International Arbitration B

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AIII) Redfern and Hunter on International Arbitration B

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“In general, the parties may also be represented by engineers,or commercial men, for the purpose of putting forward theoral submissions, and even for the examination of witnesses.It is not uncommon, where a case involves technical issues,for an engineer or other professional man to be part of theteam of advocates representing a party at a hearing, althoughit is more usual for such technical experts to be called aswitnesses in order that their opinions and submissions maybe tested by cross-examination. However, it may sometimesbe convenient and save time if technical experts address thearbitral tribunal directly as party representatives[10].

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The Supreme Court of California held in 1998 thatrepresenting a party in an arbitration without its seat inCalifornia was ‘engaging in the practice of law’ in that state.It followed that a New York lawyer, not a member of theCalifornian Bar, was not qualified to represent his client in aCalifornian arbitration; and was thus unable to recover hisfee when he sued for it[11]. Fortunately the court stated thatthe rule did not apply in international arbitration. IN Englandthere is not, and never has been, any danger of a similarsituation arising[12]. A party to an arbitration may, in theory,be represented by his plumber, his dentist, or anyone else ofhis choosing, although the choice usually falls on a lawyeror specialist claims consultant in the relevant industry[13].”

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10 Both the UNCITRAL RULES (Art4) and the LCIA Rules (Art18) make itclear that parties are entitled to be represented by non-lawyers.11 Birbrower, Montabane, Condon Frank v. The Superior Court of SantaClara County, 1998 Cal Lexis2; 1998 WL 1346 (Cal 1/5/98)

12 i.e. that only a member of the local bar should be entitled to represent a partyin a judicial or quasi-judicial proceeding.

13 English Arbitration Act, 1996, s 36. This reaffirms the previous common lawposition.

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IV) LONDON COURT OF INTERNATIONAL ARBITRATION(LCIA) RULES (2014)

Article 18 – Legal Representatives

“18.1Any party may be represented in the arbitration byone or more authorized legal representatives appearing byname before the Arbitral Tribunal.

18.2 Until the Arbitral Tribunal’s formation, the Registrar mayrequest from any party: (i) written proof of the authoritygranted by that party to any legal representative designatedin its Request or Response; and (ii) written confirmation ofthe names and addresses of all such party’s legalrepresentatives in the arbitration. After its formation, at anytime, the arbitral Tribunal may order any party to providesimilar proof or confirmation in any form considersappropriate.”

V) CHINA INTERNATIONAL ECONOMIC AND TRADEARBITRATION COMMISSIN (CIETAC) ARBITRATION

RULES.

Article 22 - Representation

“A party may be represented by its authorized Chinese and/or foreign representative(s) in handling matters relating tothe arbitration. In such a case, a Power of Attorney shall beforwarded to the Arbitration Court by the party or itsauthorized representative(s).”

VI) ARBITRATION RULES, MEDIATION RULES OFINTERNATIONAL CHAMBER OF COMMERCE.

ARTICLE 26 – Hearings

“4. The parties may appear in person or through dulyauthorized representatives. In addition, they may be assistedby advisers.”

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AVII)COMMERCIAL ARBITRATION RULES ANDMEDIATION PROCEDURES OF AMERICANARBITRATION ASSOCIATION

R-26. Representation

“Any party may participate without representation (pro se),Bor by counsel or any other representative of the party’schoosing, unless such choice is prohibited by applicable law.A party intending to be so represented shall notify the otherparty and the AAA of the name, telephone number andaddress, and email address if available, of the representativeCat least seven calendar days prior to the date set for thehearing at which that person is first to appear. When such arepresentative initiates an arbitration or responds for a party,notice is deemed to have been given.”

VIII)ARBITRATION RULES OF THE SINGAPOREDINTERNATIONAL ARBITRATION CENTRE (SIAC)

Party Representatives

“23.1Any party may be represented by legal practitionersor any other authorized representatives. The Registrar and/or the Tribunal may require proof of authority of any partyErepresentatives.

23.2After the constitution of the Tribunal, any changeor addition by a party to its representatives shall be promptlycommunicated in writing to the parties, the Tribunal and theRegistrar.”

FIX)RULES OF I NTERNATIONAL COMMERCIALARBITRATION BY INDIAN COUNCIL OFARBITRATION

20. Party Representation and assistance

“At the hearing, a party shall be entitled to appear throughAttorney, Advocate or a duly authorized Advisor orRepresentative or in person, subject to such proof of authorityto the satisfaction of the Registrar or the Tribunal.”

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30. Shri C.U. Singh, learned senior counsel, by way of rejoinder,opposed the submissions of learned counsel appearing for the foreignlaw firms. He submitted that the stand of the Central Government finallywas to support the stand of the Bar Council of India. The argument thatparticipation of foreign lawyers will be in the interest of the country wasraised by the foreign law firms only as shown from para 51 of the MadrasHigh Court judgment. He submitted that the arbitrator was also an‘authority’ before whom only advocates enrolled in India alone couldappear. The arbitrator could record evidence and summon witnessesthrough Court(Section 27). Rules of Arbitration Institutions have to be inconformity with the law of the land. He also submitted that the rulesframed by the Bar Council of India under Section 49 define the practiceof law so as to cover even giving of opinion.

31. Shri Singh further pointed out that Ethics for the profession asapplicable in India are different from the Ethics applicable in othercountries. In this regard, it was submitted that Rule 36 in Part VI, ChapterII of the BCI Rules prohibits direct or indirect advertising by advocates,or solicitation by any means whatsoever. Rule 18 bars an advocatefrom fomenting litigation. In Bar Council of Maharashtra versus M.V.Dabholkar[14], this Court held that advertising was a serious professionalmisconduct for an advocate. As against this, in USA Rule 7.3 of theAmerican Bar Association Rules bars only in-person or live telephonicsolicitation of clients, but expressly permits lawyer-to-lawyer solicitation,as well as client solicitation by written, recorded or electroniccommunication, unless the target of solicitation has made known to thelawyer his desire not to be solicited, or the solicitation involved coercion,duress or harassment. The US Supreme Court, inter alia, in Zauderer

versus Office of Disciplinary Counsel[15]and in Shapero versusKentucky Bar Association[16] struck down disciplinary actions againstlawyers for soliciting clients through print advertisements or hoardings.In UK, Solicitors Regulation Authority(SRA) is a regulatory bodyestablished under the Legal Services Act, 2007. Chapter 8 of the SRAHandbook permits publicity of the law firm but prohibits solicitations.

32. In India, with regard to Contingency fees, Rule 20 in Part VI,Chapter II of the BCI Rules bars an advocate from stipulating a feecontingent on the results of the litigation or from agreeing to share the14 (1976) 2 SCC 29115 471 US 626 (1985)16 486 US 466

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Aproceeds thereof. Rule 21 prohibits practices akin to champerty ormaintenance, and prohibits an advocate from buying or trafficking in orstipulating or agreeing to receive any share or interest in an actionableclaim. In USA Rule 1.5 (c) of the ABA Rules permits lawyers to chargecontingency fees, except in certain specified cases like criminal defence,etc. Fee-splitting arrangements between lawyers from different firmsBare also permitted with some restrictions. In U.K., Section 58 of theCourts and Legal Services Act, 1990 permits “conditional fee agreements”except in criminal proceedings and family law matters and Section 58AApermits “damages-based fee agreements”, all of which entitle legalpractitioners to a share of the “winnings”.C33. In India, there are no rules framed by the Bar Council on thesubject ‘sale of law practice’. In U.S.A., Rule 1.17 permits law firms orlawyers having private practice to sell their practice including the goodwill.In U.K., SRA Guidelines permit sale of practice as a going concern oracquisition of a practice which is closing down.D34. In India, senior advocates are barred from interacting directlywith clients, and are not permitted to draft pleadings or affidavits,correspond on behalf of clients, or to appear in court unassisted by anadvocate (Part VI, Chapter I of the Bar Council of India Rules). InU.S.A., no such distinction or designations are made. In U.K., thereappear to be no restrictions on Queen’s Counsel (QCs) similar to theEones imposed by the Bar Council in India. QCs are permitted to join lawfirms as partners.

35. In India, funding of litigation by advocates is not explicitlyprohibited, but a conjoint reading of Rule 18 (fomenting litigation), Rule20 (contingency fees), Rule 21 (share or interest in an actionable claim)Fand Rule 22 (participating in bids in execution, etc.) would strongly suggestthat advocates in India cannot fund litigation on behalf of their clients.There appears to be no restriction on third parties (non-lawyers) fundingthe litigation and getting repaid after the outcome of the litigation. InU.S.A., lawyers are permitted to fund the entire litigation and take theirGfee as a percentage of the proceeds if they win the case. Third PartyLitigation Funding/Legal Financing agreements are not prohibited. InU.K., Section 58B of the Courts and Legal Services Act, 1990 permitslitigation funding agreements between legal service providers and litigantsor clients, and also permits third party Litigation Funding or LegalFinancing agreements, whereby the third party can get a share of theHdamages or “winnings”.

36. In India, partnerships with non-lawyers for conducting legalpractice is not permitted. In U.K., Section 66 of the Courts and LegalServices Act, 1990 expressly permits solicitors and barristers to enterinto partnerships with non-solicitors and non-barristers.

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CONSIDERATION OF THE ISSUES

37. We have considered the rival submissions. Questions forconsideration mainly arise out of directions in para 63 of the MadrasHigh Court judgment which have already been quoted in the beginningof this judgment. viz. :

B

(i) Whether the expression ‘practise the profession of law’includes only litigation practice or non-litigation practice also; C

(ii) Whether such practice by foreign law firms or foreign lawyersis permissible without fulfilling the requirements of AdvocatesAct and the Bar Council of India Rules;

(iii) If not, whether there is a bar for the said law firms or lawyersto visit India on ‘fly in and fly out’ basis for giving legal adviceDregarding foreign law on diverse international legal issues;

(iv) Whether there is no bar to foreign law firms and lawyersfrom conducting arbitration proceedings and disputes arisingout of contracts relating to international commercialarbitration; E

(v) Whether BPO companies providing integrated services arenot covered by the Advocates Act or the Bar Council ofIndia rules.

RE : (i)

38. In Pravin C. Shah versus K.A. Mohd. Ali[17], it was observedthat right to practice is genus of which right to appear and conduct casesis specie. It was observed:

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“………The right of the advocate to practise envelopes a lotof acts to be performed by him in discharge of his professionalduties. Apart form appearing in the courts he can be consultedby his clients, he can give his legal opinion whenever soughtfor, he can draft instruments, pleadings, affidavits or anyother documents, he can participate in any conferenceinvolving legal discussions etc. ……”

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[2018] 3 S.C.R.

AIn Ex. Capt. Harish Uppal versus Union of India[18], same viewwas reiterated.

39. Ethics of the legal profession apply not only when an advocateappears before the Court. The same also apply to regulate practice outsidethe Court. Adhering to such Ethics is integral to the administration ofBjustice. The professional standards laid down from time to time arerequired to be followed. Thus, we uphold the view that practice of lawincludes litigation as well as non litigation.

RE : (ii)

40. We have already held that practicing of law includes not onlyCappearance in courts but also giving of opinion, drafting of instruments,participation in conferences involving legal discussion. These are partsof non-litigation practice which is part of practice of law. Scheme inChapter-IV of the Advocates Act makes it clear that advocates enrolledwith the Bar Council alone are entitled to practice law, except as otherwiseprovided in any other law. All others can appear only with the permissionDof the court, authority or person before whom the proceedings are pending.Regulatory mechanism for conduct of advocates applies to non-litigationwork also. The prohibition applicable to any person in India, other thanadvocate enrolled under the Advocates Act, certainly applies to anyforeigner also.

ERE : (iii)

41. Visit of any foreign lawyer on fly in and fly out basis mayamount to practice of law if it is on regular basis. A casual visit forgiving advice may not be covered by the expression ‘practice’. Whethera particular visit is casual or frequent so as to amount to practice is aFquestion of fact to be determined from situation to situation. Bar Councilof India or Union of India are at liberty to make appropriate rules in thisregard. We may, however, make it clear that the contention that theAdvocates Act applies only if a person is practicing Indian law cannotbe accepted. Conversely, plea that a foreign lawyer is entitled to practiceforeign law in India without subjecting himself to the regulatoryGmechanism of the Bar Council of India Rules can also be not accepted.We do not find any merit in the contention that the Advocates Act doesnot deal with companies or firms and only individuals. If prohibition appliesto an individual, it equally applies to group of individuals or juridical persons.

RE: (iv)

RE: (iv)

42. It is not possible to hold that there is absolutely no bar to aforeign lawyer for conducting arbitrations in India. If the matter isgoverned by particular rules of an institution or if the matter otherwisefalls under Section 32 or 33, there is no bar to conduct such proceedingsin prescribed manner. If the matter is governed by an internationalcommercial arbitration agreement, conduct of proceedings may fall underSection 32 or 33 read with the provisions of the Arbitration Act. Even insuch cases, Code of Conduct, if any, applicable to the legal profession inIndia has to be followed. It is for the Bar Council of India or CentralGovernment to make a specific provision in this regard, if consideredappropriate.

RE: (v)

43. The BPO companies providing range of customized andintegrated services and functions to its customers may not violate theprovisions of the Advocates Act, only if the activities in pith and substancedo not amount to practice of law. The manner in which they are styledmay not be conclusive. As already explained, if their services do notdirectly or indirectly amount to practice of law, the Advocates Act maynot apply. This is a matter which may have to be dealt with on case tocase basis having regard to a fact situation.

44. In view of above, we uphold the view of the Bombay HighCourt and Madras High Court in para 63 (i) of the judgment to the effectthat foreign law firms/companies or foreign lawyers cannot practiceprofession of law in India either in the litigation or in non-litigation side.We, however, modify the direction of the Madras High Court in Para63(ii) that there was no bar for the foreign law firms or foreign lawyersto visit India for a temporary period on a “fly in and fly out” basis forthe purpose of giving legal advice to their clients in India regarding foreignlaw or their own system of law and on diverse international legal issues.We hold that the expression “fly in and fly out” will only cover a casualvisit not amounting to “practice”. In case of a dispute whether a foreignlawyer was limiting himself to “fly in and fly out” on casual basis for thepurpose of giving legal advice to their clients in India regarding foreignlaw or their own system of law and on diverse international legal issuesor whether in substance he was doing practice which is prohibited canbe determined by the Bar Council of India. However, the Bar Council A

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Aof India or Union of India will be at liberty to make appropriate Rules inthis regard including extending Code of Ethics being applicable even tosuch cases.

45. We also modify the direction in Para 63 (iii) that foreign lawyerscannot be debarred from coming to India to conduct arbitrationBproceedings in respect of disputes arising out of a contract relating tointernational commercial arbitration. We hold that there is no absoluteright of the foreign lawyer to conduct arbitration proceedings in respectof disputes arising out of a contract relating to international commercialarbitration. If the Rules of Institutional Arbitration apply or the matteris covered by the provisions of the Arbitration Act, foreign lawyers mayCnot be debarred from conducting arbitration proceedings arising out ofinternational commercial arbitration in view of Sections 32 and 33 of theAdvocates Act. However, they will be governed by code of conductapplicable to the legal profession in India. Bar Council of India or theUnion of India are at liberty to frame rules in this regard.D46. We also modify the direction of the Madras High Court inPara 63(iv) that the B.P.O. Companies providing wide range ofcustomized and integrated services and functions to its customers likeword processing, secretarial support, transcription services, proof readingservices, travel desk support services, etc. do not come within the purviewEof the Advocates Act, 1961 or the Bar Council of India Rules. We holdthat mere label of such services cannot be treated as conclusive. If inpith and substance the services amount to practice of law, the provisionsof the Advocates Act will apply and foreign law firms or foreign lawyerswill not be allowed to do so.

FThe Civil Appeals are disposed of accordingly.

Kalpana K. Tripathy

Appeals disposed of.

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