SC concludes hearing, reserves the judgement in case of entry of foreign firms in India

The Supreme Court bench comprising of Justices AK Goel and UU Lalit on Thursday (February 1st) reserved its judgement in the case relating to entry of Foreign Law firms into Indian legal market. Senior Advocates Sajan Poovayya, Arvind Datar, CU Singh, Dushyant Dave and Guru Krishnakumar and advocate Nakul Dewan argued on the final day of the four-day long hearing.

Advocate Nakul Dewan, appearing on behalf of Global Indian Lawyers Association has stated that Advocates Act deals with the practice of Indian law only. He reiterated his submission made previously, stating that the practice of law under Sections 29, 30 and 33 do not cover practice of foreign law. He submitted that the court should only consider whether an Indian lawyer can team up with a foreign lawyer to set up a foreign law firm in India, and should not go into how the structures will play out.  He further submitted that when a foreign lawyer gives advice on foreign law in India, he is regulated by the law of the country where is enrolled as well as by Section 36 of Advocates Act.

Senior Advocate Sajan Poovayya, representing US-based law firms White & Case and Covington & Burling, made it clear that his submission would be limited to the ‘fly in fly out’ aspect of the Madras High Court judgment and the permission granted for International Commercial Arbitration. He highlighted the correctness of law according to him which was laid down in the Madras High court judgment with respect to these aspects. He said, “I am not challenging the Bombay High Court judgment. It is also my submission that there is no incongruence between the two judgments and that the Madras High court, in fact, accepts the Bombay High Court judgment.”

Mr. Poovayya also argued that fly in fly out would be on mandate of the client and the test for ‘fly in fly out’ would be permanence of establishment. “What if a foreign lawyer has mandate for fly in fly out every day by different persons? Will he not be able to permanently stay here”, questioned Justice Goel. He replied that regularity of frequency of ‘fly in fly out’ is not what should be taken into account but the permanence of the establishment which should be looked into.

Senior advocate Arvind Datar, appearing on behalf of six law firms from United Kingdom, had earlier argued on the scope of Sections 30 and 33 of the Advocates Act, particularly the ambit of the term “practice”. On Thursday, he submitted that Section 29 the provision is intended to obliterate different classes of lawyers and bring in uniformity among advocates.

Mr. Datar submitted before the bench a compilation of judgments on the meaning of ‘practice of the profession of law’, including Aswani Kumar Ghosh v. Arabinda Bose (1952) wherein it was held that ‘practice’ implies ‘acting and pleading’.

Praying before the bench to uphold the Madras High Court judgment in respect of international commercial arbitration and ‘fly in and fly out’, he submitted, “Any prohibition on ‘fly in and fly out’ regime can be only by way of an act of the Parliament and not by any rule framed under section 24(1) of the Advocates Act”.

Senior advocate Guru Krishnakumar appeared on behalf of Freehills, Australia and Norton Rose. His argument was that the Advocates Act has to be construed and interpreted in the context of changed scenario of current times.

He drew the attention of the bench to three aspects of section 33 of the Advocates Act- “one, the phrase ‘any other law for the time being in force’; two, to correlate the Arbitration Act of 1996 with the language of section 33 of the Advocates Act of 1961 and three, to read the Advocates Act in the light of its specific objectives of streamlining class of persons for practice of the law as well as legal education and in context of the changed times.”

Senior advocate Dushyant Dave assisted the court with respect to the necessity of allowing foreign lawyers for International Commercial Arbitration. “The simple reason why there can be no prohibition on International Commercial Arbitration is because it is voluntary mechanism and State has minimal role. A party can engage anybody to plead his case and that person need not be a lawyer. The person representing the party before the arbitral tribunal is called representative and not lawyer,” said Mr. Dave.

Further, it was Dave’s contention that since Arbitral tribunal was not bound by the Code of Civil Procedure or Indian Evidence Act, there cannot be prohibitions on such a voluntary mechanism.

Advocate CU Singh, appearing for the Bar Council of India, responded to the submissions made by various law firms. Citing Sections 19 and 24 of Arbitration and Conciliation Act, Mr. Singh contended that there is no prohibition on Arbitral Tribunals taking evidence.

He then proceeded to deal with the scope of the term of ‘practice’ only to be met with a barrage of questions from the Bench.

“If only lawyers can practice, how can retired Supreme Court and High court judges go for arbitration, give legal opinions etc”, asked Justice Lalit.

The Court sat till 5.30 pm, well past the scheduled time of 4 pm before concluding the hearing and reserving its judgement.