RBI cannot permit foreign law firms under Fema: SC

The Supreme Court asked the Reserve Bank of India not to give permission to foreign law firms to open liaison offices in India under foreign exchange laws until the court takes a final call on the issue

Written by Indu Bhan | New Delhi | Published: July 5, 2012 1:16:34 am

The Supreme Court on Wednesday asked the Reserve Bank of India (RBI) not to give permission to foreign law firms to open liaison offices in India under foreign exchange (Fema) laws until the court takes a final call on the issue.

While refusing to stay the Madras High Court judgment,an apex court bench headed by justice RM Lodha sought replies from the ministries of law,home,finance and external affairs,the income tax department,RBI,and 31 foreign law firms,Integreon,an LPO,and others.

The court clarified that the foreign law firms should follow Advocates Act,1961,which covers both litigious and non-litigious work.

Earlier in 1994,RBI had allowed three foreign law firms — White & Case LLP,Ashurst LLP and Chadbourne & Parke LLP — to open liaison offices on condition that these firms would not earn any income in India.

The Bar Council of India (BCI) has challenged the Madras HC’s judgment that held that foreign law firms or foreign lawyers cannot practise law in India either on the litigation or non-litigation side,unless they fulfill the requirement of the Advocates Act,1961 and the BCI rules.

The HC,however,said that there is no bar on foreign lawyers to visit India for giving advice on foreign law to clients in India,which has been challenged by BCI.

FE

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