Professional Documents
Culture Documents
(Professional Ethics)
ACKNOWLEDGEMENTS
On the completion of this project I find that there are many persons to whom
I would like to express my gratitude, since without their help and cooperation the success of this educative endeavour would not have been
possible.
I welcome this opportunity to express my sincere gratitude to my teacher
and guide,Mr. Neeraj Tiwari, Faculty of Professional Ethics, who has been
a constant source of encouragement and guidance throughout the course of
this work.
I am grateful to the IT Staff for providing all necessary facilities for carrying
out this work. Thanks are also due to all members of the Library staff for
their help and assistance at all times.
I am also grateful to all my friends and colleagues for being helpful in their
differences
and
for
their
constant
support.
I express my deepest gratitude to my parents Ms. Richa Kumar and
Mr.Rakesh Kumar, who have been the real driving force for this work.
Aakanksha Kumar
ii
RESEARCH METHODOLOGY
SUBJECT:
Professional Ethics
TOPIC:
iii
iv
CONTENTS
TITLE
PAGE NO.
1. INTRODUCTION
2
4
10
6. CONCLUSION
13
7. BIBLIOGRAPHY
14
INTRODUCTION
The General Agreement on Trade in Services (GATS) was the first world trade
agreement to apply to services and includes legal services within its coverage. The GATS
framework provides the negotiations for various services including the legal services
sector. In due course of time, these negotiations may lead to further liberalisation of trade
in legal services and the imposition of regulatory measures to the legal services at the
International level. The legal services at the international level have acquired importance
and increasing demand at the international level due to certain developments like
corporate restructuring, privatisation of trade, cross-border merger, IPRs etc. However,
the growth in legal services in not free from obstacles like understanding of individual
national laws and religious law, visa permits, permits to practise law in a foreign nation,
recognition of qualifications etc.
The most hotly debated issue in the legal world in India these days, is the entry of foreign
law firms into India. The debate commenced in 1999 when the Law Commission of
India, under the leadership of the then law minister, Mr. Ram Jethmalani, and the Bar
Council of India prepared a review paper suggesting a series of radical measures
including amending the Advocates Act to introduce a legal consultancy regime for
foreign law firms in India. Since the foreign law firms are targeting the transaction side of
business, it is the law firms that are opposing them the most. The legal profession in India
is often nepotistic and it is these family run law firms that are making the loudest protest
against their entry.
With the Bombay HCs decision in Lawyers Collective v. Chadbourne and Park and
Others in 2009 and the very recent conflicting judgment of the Madras HC in A.K. Balaji
v. Govt. Of India and others we have judicial interpretations of the law in place today that
seek to clarify the position on entry of foreign law firms and legal practitioners in India.
Preamble, 2, General Agreement on Trade in Services, Annex 1B, The Final Act Embodying the Results
of the Uruguay Round of Multilateral Trade Negotiations, Signed on April 15, 1994.
2
7 SCOTT GALLACHER, The General Agreement on Trade in Services and the International Trade in Legal
Services, in GATS : A LEGAL DEBATE 154( P. Satyanarayana Prasad, ed.)
3
New Zealand Ministry of Foreign Affairs and Trade, Questions for a Trading Nation, Wellington, New
Zealand (2002) 14 in 7 SCOTT GALLACHER, The General Agreement on Trade in Services and the
International Trade in Legal Services, a f.n.no. 15 in GATS : A LEGAL DEBATE 154( P. Satyanarayana
Prasad, ed.)
4
World Trade Organisation, Legal Services Background Note by the Secretariat, 15. (July 6, 1998)
www.wto.org/english/tratop_e/serv_e/w43.doc
The United Nations Provisional Central Product Classification (UN CPC) sub-divides
legal services into a number of categories but most countries did not adopt this
classification as it did not reflect the reality of trade in legal services. 5 As such, countries
preferred to adopt (to varying degrees), the following distinctions :
While the international trade in goods involves the physical movement of goods from one
country to another, trade in services can involve a number of modes of supply. For the
purposes of classification, GATS divides trade in services into four modes of supply-7
Cross border supply of services (Mode 1). In context of legal services, Mode
1 would be involved when lawyers create a legal product or advice, which is then sent out
of their home country into another country, with the delivery occurring by way of mail,
facsimile or electronically;
abroad (Mode 2). In the context of legal services, Mode 2 would be involved when a
person purchases the services of foreign lawyers when he/she is abroad;
provided (Mode 3). In the context of legal services, Mode 3 would be involved when
lawyers establish a permanent presence in another country, e.g. a branch office; and
service there (Mode 4). In the context of legal services, Mode 4 addresses those
instances when lawyers enter another country in order to provide legal services. This is
frequently, though not necessarily, linked to Mode 3 because, if a law firm establishes an
office in another country, it will probably want to have some of its own lawyers staff the
office. This mode also applies to those cases when a lawyer temporarily visits another
country to provide legal services.
5
The opening up of legal services debate had once again gained momentum in 2005..There
was continuing apprehension that with the World Trade Organisations (WTO)
commitments coming into force(earlier slated for end 2006), the Government of India
will be under obligation to liberalise legal services, thereby allowing foreign law firms to
8
Parvez Memon, Zulfiquar Memon and Ganesh Iyer, Legal Practice Developments In India, Business
Crime Defence (February, 2011) http://www.whoswholegal.com/news/features/article/28893/legalpractice-developments-india
9
8 ANANYA DASGUPTA AND VIDYA RANGAN, Liberalising Legal Services under GATS, in TRADE IN
SERVICES AND INDIA : PROSPECTS AND STRATEGIES 211 ( Rupa Chanda, ed.)
10
Liberalising Legal Services in India through the GATS :A Preliminary Analysis of Issues at Stake,
EQUATIONS (July 2006) http://www.scribd.com/doc/30280626/Liberalising-Legal-Services-in-Indiathrough-the-GATS-A-Preliminary-Analysis-of-Issues-at-Stake
laws shall have to be applied and for those entering in partnership with nations law firms
it would be easy to practice without any scrutiny from organized legal profession.11
As the law currently stands, the Advocates Act, 1961 and the Bar Council of India Rules,
1975 are the rules which regulate the legal services sector in India and the Bar Council
constituted under Advocates Act acts as the final regulating body. In India, Legal services
can be provided only by natural persons who are citizens of India, who are on the rolls of
the advocates in the states where the service is being provided. In order to be eligible for
enrolment as an advocate, a candidate has to be citizen of the country or a country which
allows Indian nationals to practice as per the reciprocity treatment, has to hold a degree in
law from an institution/university recognized by the Bar Council of India and be at least
twenty one years of age.12
11
Munmun
Garg,
Entry
of
Foreign
Firms
in
India
(September
29,
2009)
http://blogs.siliconindia.com/munmungarg/Entry_of_Foreign_Firms_in_India-bid-6o9R741r77635514.html
12
The Advocates Act, 1961, S. 24
Lawyers Collective v. Chadbourne and Park and Others, (December 16, 2009)
http://www.legallyindia.com/images/stories/pdf/Lawyers%20Collective%20v%20Ashurst%20&%20Ors%
20Judgement%2016%20Dec%202009.pdf
In effect the latest judgment of the High Court reaffirms the earlier decision of 1995 by
declaring the RBI's original grant of licences to the foreign firms illegal and ruling that
the foreign firms were practising law and should therefore be bound by and enrolled
under the Advocates Act. The decision is broad and largely unambiguous, and appears to
prohibit conduct that most foreign law firms had assumed was legal, i.e., the temporary
practice of giving advice in non litigious matters on behalf of Indian or foreign clients.
Despite the above notion, there are no provisions permitting foreign lawyers to practice in
India under the existing laws. The Advocates Act in Section 24 provides that only an
Indian Citizen has the right to practice and be enrolled as an advocate in India. However,
a national of any other country may be admitted as an advocate, if citizens of India are
permitted to practice law in that other country. As stated previously, Section 29 provides
that an advocate is the only recognized class of persons entitled to practice law in India.
Section 30 therefore grants every advocate whose name is entered in the state roll the
right to practice throughout the territories to which the Act extends:
before any other authority or person before whom such advocate is by or under
any law for the time being in force entitled to practice.
Section 33 further makes it clear that advocates are alone entitled to practice in any Court
or before any authority. Notwithstanding the provisions of the Advocates Act, as per the
Bar Council of India Rules, 1975 no foreigner is allowed to practice law in India unless
there is a reciprocal right of the same kind in the country of his origin 14 and he has
obtained a degree from a University recognised by the Bar Council of India. 15 There has
been talk of imminent amendments to the Advocates Act in order to permit the presence
of foreign law firms. However, as per the view of the High Court in the recent judgment,
it is apparent that the Advocates Act and the Bar Council of India Rules in their current
forms are insufficient for that purpose. However, concessions under the GATS or
amendments to the Advocates Act are unlikely until the inherent restraints faced by the
Indian legal profession are removed. These regulatory barriers faced by the profession,
14
15
16
Anirudh
Hariani,
Foreign
Law
Firms
In
India,
www.hariani.co.in/newsletter_february_Foreign_Law_Firms_10.php
(June
17,
2010)
10
who have a global presence and who require assistance from these law firms from an
international law perspective.
17
The court of chief justice MY Eqbal, with justice T.S Sivagnanam, presided all day on
February 1, 2012 in the matter AK Balaji v The Government of India, Ashurst LLP, White
& Case et al
18
and reserved its judgement. The Chief Justice M. Yusuf Eqbal has
disposed of the writ petition with certain directions in his judgment of February 21, 2012.
This judgment clears the air on a long winded debate on what foreign lawyers and law
firms can and cannot do in India. The court stated the issue in paragraph 44 of the order:
[W]hether a foreign law firm, without establishing any liaison office in
India visiting India for the purpose of offering legal advice to their clients in
India on foreign law, is prohibited under the provisions of the Advocates
Act. In other words, the question here is, whether a foreign lawyer visiting
India for a temporary period to advise his client on foreign law can be
barred under the provisions of the Advocates Act. (emphasis supplied)
In a nutshell, the court answered the question in the negative. In other words, foreign law
firms can: (1) send their lawyers to India for temporary periods of time, (2) to advise their
clients on foreign law, and (3) without establishing a liaison office in India.
The court came up with a list of guidelines, some of which are as follows19 :
i.
Foreign law firms or foreign lawyers cannot practice the profession of law in
India either on the litigation or non-litigation side, unless they fulfil the
requirement of the Advocates Act, 1961 and the Bar Council of India Rules.
ii.
However, there is no bar either in the Act or the Rules for the foreign law firms or
foreign lawyers to visit India for a temporary period on a fly in and fly out basis,
for the purpose of giving legal advise to their clients in India regarding foreign
law or their own system of law and on diverse international legal issues.
iii.
Moreover, having regard to the aim and object of the International Commercial
Arbitration introduced in the Arbitration and Conciliation Act, 1996, foreign
17
31 Foreign Law Firms deny all the allegations made by A.K. Balaji, Bar & Bench News Network
(August 1, 2011) http://barandbench.com/brief/2/1637/31-foreign-law-firms-deny-all-the-allegations-madeby-ak-balaji
18
WP5614/2010.
Judgment
of
February
21,
2012
at
http://judis.nic.in/judis_chennai/qrydisp.aspx?filename=35290
19
Kian Ganz , Chennai writ losers: LPOs, CAs, secondments & logic. Winners: Invisible in-house &
pragmatism (February 24, 2012) http://www.legallyindia.com/201202242598/Analysis/editorial-chennaiforeign-firm-ruling-ignores-in-house-endangers-indian-lpos-cas-secondments-a-common-sense-forpragmatism
11
The judgement has caused confusion as it seemed to be in conflict with the Bombay high
courts ruling in the 2009 Lawyers Collective case, BCI chairman Ashok Parija said.
The Bombay high court had said there is a total ban on foreign lawyers coming to India.
This judgement says fly-in fly-out is possible. To that extent we might have some
difficulty with this judgement, said Parija.20
BCI has called a meeting on 3 March to discuss the judgements and appeal to the
Supreme Court to resolve any conflict in the rulings. Maybe we will file (an) SLP
(special leave petition) so that the conflict between judgements is resolved, he said.21
20
Nikhil Kanekal & Kian Ganz, BCI may appeal Chennai writ ruling as foreign firms, SILF like judgment
(February 24, 2012) http://www.livemint.com/2012/02/24002628/Bar-Council-may-appeal-HC-ruli.html
21
Id.
12
CONCLUSION
"The legal profession in so-called advanced countries is a product of Industrial
Revolution whereas in India it is a product of Independence Revolution"
-- Mr Lalit Bhasin
The above issues are not really about whether foreign law firms should be allowed to
have offices in India, but they should lie at the heart of the profession. For one, there
remains the lingering suspicion that the BCI does not fully understand, or has chosen to
wilfully misunderstand, many sectors in the modern Indian legal profession. To that
extent it has not been an effective regulator. Meanwhile, the poor Madras High Court,
following the example of the Bombay High Court, has done its best and bent over
backwards in trying to make sense of the legal market through the lens of the 51-year-old
Advocates Act.
But did the drafters in 1961 envisaged giant in-house legal departments, magic circle
lawyers flying in and out, CA firms doing law, international commercial arbitration, huge
Indian corporate law firms run as businesses and LPOs? No. But even if the Supreme
Court ultimately hears this case and it very well might according to the BCI chairmans
statement reported by Mint (as mentioned earlier), rumours that the Chennai advocates
camp or the foreign firms might appeal the fact of the matter is that the Advocates Act
still remains desperately unfit for its present-day purpose, no matter how hard it may try
to dodge the tough questions.
13
BIBLIOGRAPHY
STATUTES AND RULES
1. Advocates Act, 1961
2. Bar Council of India Rules, 1975
CASES
1. A.K. Balaji v. Government of India and Others, WP5614/2010. Judgment of
February
21,
2012
at
http://judis.nic.in/judis_chennai/qrydisp.aspx?filename=35290
2. Lawyers Collective v. Chadbourne and Park and Others, (December 16, 2009)
http://www.legallyindia.com/images/stories/pdf/Lawyers%20Collective%20v%20
Ashurst%20&%20Ors%20Judgement%2016%20Dec%202009.pdf
INTERNATIONAL LEGAL DOCUMENTS
1. General Agreement on Trade in Services, Annex 1B, The Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade Negotiations, Signed on
April 15, 1994.
2. World Trade Organisation, Legal Services Background Note by the Secretariat,
(July 6, 1998) www.wto.org/english/tratop_e/serv_e/w43.doc
BOOKS
1. GATS : A LEGAL DEBATE ( P. Satyanarayana Prasad, ed.)
2. TRADE IN SERVICES AND INDIA : PROSPECTS AND STRATEGIES ( Rupa Chanda, ed.)
ARTICLE
1. Ananya Dasgupta and Vidya Rangan, Liberalising Legal Services under GATS.
2. Anirudh
Hariani,
Foreign
Law
Firms
In
India,
(June
17,
2010)
www.hariani.co.in/newsletter_february_Foreign_Law_Firms_10.php
3. Liberalising Legal Services in India through the GATS :A Preliminary Analysis of
Issues
at
Stake,
EQUATIONS
(July
2006)
http://www.scribd.com/doc/30280626/Liberalising-Legal-Services-in-Indiathrough-the-GATS-A-Preliminary-Analysis-of-Issues-at-Stake
14
In
India,
Business
Crime
Defence
(February,
2011)
http://www.whoswholegal.com/news/features/article/28893/legal-practicedevelopments-india.
6. Scott Gallacher, The General Agreement on Trade in Services and the
International Trade in Legal Services.
NEWS REPORTS
1. 31 Foreign Law Firms deny all the allegations made by A.K. Balaji, Bar & Bench
News Network (August 1, 2011) http://barandbench.com/brief/2/1637/31-foreignlaw-firms-deny-all-the-allegations-made-by-ak-balaji
2. Kian Ganz, Chennai writ losers: LPOs, CAs, secondments & logic. Winners:
Invisible
in-house
&
pragmatism
(February
24,
2012)
http://www.legallyindia.com/201202242598/Analysis/editorial-chennai-foreignfirm-ruling-ignores-in-house-endangers-indian-lpos-cas-secondments-a-commonsense-for-pragmatism
3. Nikhil Kanekal & Kian Ganz, BCI may appeal Chennai writ ruling as foreign
firms,
SILF
like
judgment
(February
24,
2012)
http://www.livemint.com/2012/02/24002628/Bar-Council-may-appeal-HCruli.html
15