American Bar Association (ABA) president Stephen N. Zack has approved India's decision of not allowing foreign lawyers to establish law firms in the country and has urged the Bar Council of India (BCI) to maintain the status quo till the matter is sorted out.

I understand that the Bar Council of India needs to evaluate fully, and adopt rules and regulations addressing, the broader issue of whether, for example, U.S. lawyers should be permitted to establish offices in India and give advice on the laws of their home countries and international law, which I hope you will adopt in the not too distant future, Zack wrote in a letter to BCI Chairman Gopal Subramanium.

However, until such rules are adopted, I request the Bar Council of India to not alter the status quo, he wrote.

The Bombay High Court had passed a landmark judgment in December 2009, which virtually denied foreign law firms entry into India on the basis of the existing laws. However, it was alleged that the firms, which were involved in the case, although comprising foreign nationals (not advocates), were providing consultancy legal services through their offices in India.

The judgment was pronounced in the matter of Lawyers Collective vs Chadbourne and Park and Others, against the right of foreign law firms Ashurst (UK), Chadbourne and Parke Associates (US) and White and Case (US) after they set up liaison offices in India had in the 1990s, after obtaining permission from the RBI under Section 29(1)(a) of the Foreign Exchange Regulation Act, 1973.

Currently, U.S. lawyers are allowed to travel to India on an in-and-out basis to advise their clients on non-Indian aspects of law. That status quo should be maintained as the BCI considers the broader issue of whether to allow the practice of law by foreign law firms in India, Zack said.

Last year in April, a Public Interest Litigation (PIL) filed by A. K. Balaji, an advocate, was also admitted in Madras High Court. The petition challenged the entry of foreign law firms into the country and was against 31 foreign law firms from UK and U.S., including one LPO.

It sought a Writ of Mandamus that would require the government to take action against foreign law firms practicing 'illegally' in India.

Senior advocate and former additional solicitor general Abhishek Manu Singhvi, who is representing a number of US law firms, had argued for an early disposal of the writ petition against the foreign law firms even as BCI counsel and advocate general P.S. Raman sought for an adjournment, promising that comprehensive guidelines regulating the activities of foreign law firms would be discussed at a meeting on January 29.

Additional Solicitor General M. Ravindran, who appeared on behalf of the Ministry of Law and Justice, had also sought more time to file a reply.

A division bench comprising Chief Justice M.Y. Eqbal and Justice T.S. Sivagnanam said the court would take a decision on it after hearing from concerned parties and adjourned the matter till March 8.

In his letter, Zack pointed out that some Indian lawyers have offices in the U.S., where they give advice on Indian law pursuant to the ABA's Foreign Legal Consultant Rule, which has no requirement for exams or special training. Similarly, U.S. lawyers travel to India temporarily to advise on non-Indian laws.

The ABA believes that allowing such activities is critical not only for the mutual benefit of the legal practitioners in both countries, the letter said, but also for fostering the vital and already close relationship between India and the United States and to promote the robust growth of trade and investments between our two countries. Allowing such activities is also essential in making India a preferred venue for international arbitration proceedings.

Last November, Zack had sent a letter to U.S. President Barack Obama requesting him to urge the the Indian government to allow American lawyers to open offices in India so they can counsel clients on the laws of the United States.

However, the issue was dropped during Obama's subsequent 3-day visit to India and the American president chose rather to focus on job creation.

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