NEW DELHI: The government’s plan of opening up the legal sector to foreign players has ground to a halt after the Bar Council of India (BCI) pulled out of a process of drafting rules for entry of overseas firms into India.
The BCI — which regulates the legal profession in India — opposed a commerce ministry suggestion that foreign lawyers be allowed to practice Indian law in the country, its chairman Manan Kumar Mishra told HT. Under current law, only Indian citizens can do that.
Mishra said the BCI withdrew from a meeting by the law ministry last Thursday because at a state bar councils gathering in August, all lawyers’ bodies opposed the entry of foreign firms.
The BCI also accused officials in the law and commerce ministries of playing dirty and outsourcing the body’s powers to a “lesser known entity” called the Indian Corporate Counsel Association (ICCA), a Noida-based lawyers’ body. “We wanted to obey the sentiments of our government so we went ahead and prepared the draft rules,” Mishra said. “But ignoring the BCI and inviting those persons is most improper.”
A senior law ministry official called the BCI’s stance a “U-turn” that stalled the entire process. The legal sector is one of the last few where foreign investment is restricted and the BCI’s opposition sets the liberalisation process back by years. The BCI had formed the draft rules and the government circulated it to stakeholders for a discussion on July 5.
{{/usCountry}}A senior law ministry official called the BCI’s stance a “U-turn” that stalled the entire process. The legal sector is one of the last few where foreign investment is restricted and the BCI’s opposition sets the liberalisation process back by years. The BCI had formed the draft rules and the government circulated it to stakeholders for a discussion on July 5.
{{/usCountry}}The BCI, which had participated in the July meeting, shot off a letter to the ministry on September 27 saying it was withdrawing the draft and that the September 29 meeting be cancelled.
It also warned that the government would have to wait for the Supreme Court to decide on the issue, otherwise it would “tantamount to contempt of court”.
The BCI was angered by the government’s consulting the ICCA, which sent an entire draft legislation, Foreign Legal Practioners’ (Regulation of Practice) Bill, in response to the apex legal body’s draft rules.
This draft bill proposes allowing FDI of 26 to 49 per cent in the legal services sector within a two to five year period. It also calls for setting up a Foreign Practitioners’ Registration Board and restraining the BCI’s role to a single position on the five-member board. “The BCI’s decision is a retrograde step,” said Ashok Sharma, president of the ICCA.
The Society of Indian Law Firms (SILF) wanted the liberalisation process to be a “phased and sequential” one. “The first step should be reform in the Indian legal system. The second is allowing foreign lawyers to offer services here on the laws of their own countries,” SILF president Dr Lalit Bhasin said.