March 13, 2018

SC restricts entry of foreign law firms, says Foreign Lawyers Can Advice Clients On ‘Fly in And Fly Out’ Basis


On March 13, the Supreme Court of India held that foreign law firms cannot set up offices in India or practice in Indian Courts. But they can give advice to Indian clients on ‘fly in and fly out’ mode in temporary basis.

The Bombay and Madras High Court judgements were upheld, however, with some modifications in which the High Court held that

  • That foreign lawyers may visit India for a temporary period on a fly in and fly out basis, for the purpose of giving legal advice to their clients in India regarding foreign law, and
  • That foreign lawyers cannot be debarred to come to India and conduct international commercial arbitration proceedings.

Moreover, the Court has also asked BCI and the Central Government to frame necessary rules in this regard.

In January 2017, the Ministry of Commerce and Industry 3 revised a rule allowing foreign law firms to set up offices and advise clients from Indian Special Economic Zones (SEZs). It was the first time India allowed multinational law firms to operate in the country. Indian law firms were also not allowed to operate from any of the SEZs.

Senior Advocate CU Singh appeared for the BCI. He stated that the Bombay High Court judgment laid down correct law and that the Madras High Court decision insofar as it permitted the two exceptions, was wrong.

Additional Solicitor General Maninder Singh spoke for the Central government. He told the court that a proper framework needs to be prepared to deal with the issue and it urged BCI to do the same. It was also the Centre’s stand that he would support the stand taken by the BCI till Rules are framed to govern the field. “The rules are needed. We want foreign lawyers to come so as to not deny the Indian advocates of the same privilege in other countries. If the BCI does not frame the rules, the Central government would take it upon itself to stipulate the rules”, the ASG stated.

Senior Advocate Arvind Datar along with Advocate Rishi Kumar appeared for Clifford Chance LLP, Linklaters LLP, Bird & Bird LLP, Clyde & Co, Ashurst LLP and Eversheds LLP. They had prayed that the Court should uphold the judgment of the Madras High Court.

Advocate Nakul Dewan who represented the Global Indian Lawyers Association had contended that the Advocates Act does not apply to law firms but only applies to individual lawyers. Hence, the Bombay High Court judgment, which barred foreign law firms under the Advocates Act was wrong, according to his perspective.

Senior Advocate Sajan Poovayya appearing for US-based law firms White & Case and Covington & Burling had argued that the Madras High Court judgment has laid down correct law with respect to permission granted for fly in fly out.

Senior Advocate Dushyant Dave assisted the court with respect to the necessity of allowing foreign lawyer for International Commercial Arbitration.

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