The much awaited verdict of the Supreme Court of India was pronounced recently which virtually closed the door for entry of foreign law firms. The Government has drafted an updated defence policy which seeks to increase foreign direct investment in the sector. India and Canada have signed a memorandum of understanding in the field of intellectual property rights.

Entry of Foreign Law Firms – Supreme Court of India recently 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 Bench also directed the Centre and Bar Council of India (BCI) to frame rules. The judgement was passed in the matter of Bar Council of India v A. K. Balaji and Others. The Supreme Court heard the matter and modified orders passed by the Madras High Court and Bombay High Court. The apex court heard the parties’ arguments and contentions and ruled as follows:

We hold that the expression “fly in and fly out” will only cover a casual visit not amounting to “practice”. In case of a dispute whether a foreign lawyer was limiting himself to “fly in and fly out” on casual basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues or whether in substance he was doing practice which is prohibited can be determined by the Bar Council of India. However, the Bar Council of India or Union of India will be at liberty to make appropriate Rules in this regard including extending Code of Ethics being applicable even to such cases.

We hold that there is no absolute right of the foreign lawyer to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration. If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration Act, foreign lawyers may not be debarred from conducting arbitration proceedings arising out of international commercial arbitration in view of Sections 32 and 33 of the Advocates Act. However, they will be governed by code of conduct applicable to the legal profession in India. Bar Council of India or the Union of India are at liberty to frame rules in this regard.

The implications of this judgement are quite clear. The existing laws do not have any provisions to permit entry of foreign lawyers or foreign law firms. This has put to rest all debate on the possibility of opening the legal sector. There was wide speculation since the past three years due to various steps taken by the Government to progress the entry of foreign law firms. There were numerous instances when liberalization of the legal services sector was considered. The Government may now have to consider amending the law, if it is serious about allowing foreign lawyers to practice in India.

Draft Defence Policy – The Government had announced in the 2018 Financial Budget that it will bring out an industry friendly Defence Production Policy 2018 to promote domestic production by public sector, private sector and micro, small and medium enterprises (MSMEs). In pursuance of the above, a draft Defence Production Policy 2018 was released recently for public comments to be submitted latest by March 30, 2018. The vision of the policy is ‘To make India among the top five countries of the world in Aerospace and Defence industries, with active participation of public and private sector, fulfilling the objective of self-reliance as well as demand of other friendly countries.’ One of the objectives of the draft policy is to ‘Create an environment that encourages a dynamic, robust and competitive defence industry as an important part of the ‘Make in India’ initiative.’ Among the changes is further liberalization of the foreign direct investment in the defence regime. The current proposal is that FDI up to 74% under automatic route will be allowed in niche technology areas. This is an increase from the existing cap of 49% under the automatic route. It is interesting to note that the defence sector failed to attract any foreign direct investments during the April-December period of the current financial year.

MoU between India & Canada on IPR – The Union Cabinet chaired by Prime Minister Narendra Modi has given its ex-post approval for the Memorandum of Understanding (MoU) between India and Canada. The MoU was signed to establish bilateral cooperation activities in the field of Intellectual Property (IP). The MoU is intended to promote innovation, creativity and economic growth in both countries. The MoU establishes a broad and flexible framework through which both countries can exchange best practices and work together on training programs and technical exchanges to raise awareness on intellectual property rights (IPRs) and better protect IPRs.

Posted by Sourish Mohan Mitra

Sourish Mohan Mitra is an India-qualified lawyer from Symbiosis Law School, Pune and currently working as an in-house counsel with a global research firm in Delhi, India; views expressed are personal; he can be reached at sourish24x7@gmail.com; Twitter: @sourish247

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