In an important decision,the Madras High Court on Tuesday allowed foreign lawyers and law firms to do business in India on a fly-in-and-fly-out basis while categorically refusing their plea to be allowed to practice in India,whether in litigation or non-litigation.
Hearing the A K Balaji versus Union of India matter,the Division Bench of Chief Justice M Y Eqbal and Justice T S Sivagnanam ruled that foreign lawyers couldnt be debarred to come to India and conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration.
The court also paved the way for setting up legal process outsourcing (LPO) companies,but said they would have to stay away from court practice and giving legal advice,unless the advice pertains to foreign law.
Todays ruling,which is likely to be challenged in the Supreme Court,also empowers the Bar Council of India to take action against erring LPOs that set up shop in India.
The court ruling came after lengthy hearings on the plea seeking a ban on the entry of foreign law firms in India on the ground that such firms violate rules laid down in the Advocates Act,1964.
As many as 31 international law firms and some LPO companies were party to the case. Appearing for the Union of India,Additional Solicitor General M Ravindran had told the court that the Centre had decided to introduce new rules to set up a regulatory authority to streamline the operations of law firms in India.
He had told the court that if foreign law firms were denied permission to conduct arbitration in India,the country would lose out on the highly-lucrative arbitration sector to other countries.
When contacted,Som Mandal,managing partner,Fox Mandal,who has been spearheading the demand for entry of foreign law firms in India,said the judgment would have far-reaching impact as it clarifies many issues.