On March 10, 2023 the Bar Council of India ("BCI"), which is the apex disciplinary and regulatory body for legal profession and legal education in India, came out with the Rules for Registration of Foreign Lawyers and Foreign Law Firms in India, 2022 ("Rules").1Bar Council of India Notification, Bar Council of India Rules for Registration of Foreign Lawyers and Foreign Law Firms in India, 2022 (Mar. 10, 2023), https://www.livelaw.in/pdf_upload/bar-council-of-india-rules-for-registration-and-regulation-of-foreign-lawyers-and-foreign-law-firms-in-india-2022-463531.pdf [hereinafter “The Rules”].X1  Under the Rules, foreign lawyers/law firms are permitted, after registration, to provide legal services in non-litigious matters as detailed in the Rules.  One important area where foreign lawyers/law firms would be allowed to provide legal services is any international arbitration case which is conducted in India.  This is a drastic change from the protectionist stance previously adopted by the BCI pertaining to entry of foreign lawyers/law firms into the Indian legal industry and could help India gain popularity as a hub for international arbitration proceedings.

The question of allowing foreign lawyers/law firms to practice in India reached the Indian Supreme Court in 2015, after challenge to judgments of two High Courts.  In its 2018 decision in Bar Council of India v. A.K. Balaji,1Bar Council of India v. A.K. Balaji & Ors., AIR 2018 SC 1382 (2018) (India).X1 the Indian Supreme Court ruled that foreign law firms could operate in India only on a limited 'fly-in and fly-out' basis, i.e., via temporary visitation.  The Court further opined that as far as international commercial arbitration is concerned there is no absolute bar and the same would be subject to rules and regulations of the arbitral institution or of the provisions of the Advocate Act, 1961.

In the absence of clarity as to whether foreign lawyers/law firms could provide legal services for international commercial arbitration, international arbitration practitioners were discouraged from representing clients in international commercial arbitration proceedings in India.  This however was not the case for international arbitrations involving Indian parties that were seated outside of India, as in such proceedings the Indian parties typically chose to engage lawyers/law firms based in London, the Middle East or Singapore to represent them.

The ambiguity concerning representation in international arbitrations seated in India was clarified with the introduction of the Rules.  Under the Rules, foreign lawyers/law firms may register with the BCI to provide legal services in India in non-litigious matters as detailed in the Rules.  Notably, the practice of foreign lawyers/law firms may include "providing legal expertise/advise and appearing as a lawyer for a person, firm, company, corporation, trust, society etc. who/which is having an address or principal office or head office in a foreign country in any international arbitration case which is conducted in India and in such arbitration case ' [sic] foreign law may or may not be involved."1The Rules, Rule 8(2)(ii).X1  Two interesting facets of this provision are, firstly, that it permits foreign lawyers/law firms to appear for a person, firm, company, corporation, trust, society, etc., provided that the party’s address or principal office or head office is in a foreign country.  This implies that any law firm, company, corporation, trust, or society which is Indian but has an address in a foreign country would be able to seek representation of a foreign lawyer/law firm.  Secondly, the foreign lawyer/law firm can appear for a person or an entity in an international arbitration even if foreign law is not relevant to the underlying dispute.  Thus, foreign lawyers/law firms are essentially permitted to advise on issues relating to domestic law in international arbitration proceedings.

Noting the inconsistency, the BCI attempted to clarify the above noted facets by a March 19, 2023 Press Release titled "True Facts about the BCI's Rules regarding Entry, Rules and Regulations of Foreign lawyers and Law firms in India."2Press Release, Bar Council of India, True Facts about the BCI's Rules regarding Entry, Rules and Regulations of Foreign lawyers and Law firms in India (Mar. 19, 2023), https://images.assettype.com/barandbench/2023-03/57a2a39d-a1a9-4d43-ae22-aa1a5fbf3e8d/Press_Release_Dated_19_03_2023.pdf.X2  There, the BCI stated that foreign lawyers/law firms shall be allowed to advise their "foreign clients about foreign laws and international laws only."3Id. at ¶ 1.X3  The Press Release notes that foreign commercial entities and multi-national corporations generally do not prefer India as a venue of arbitration since they are not allowed to seek representation of foreign lawyers.  The BCI further hopes that the change in rules would encourage India being preferred as a venue for international arbitration proceedings.

The Rules and the Press Release, though confounding in certain aspects, make it abundantly clear that foreign lawyers/law firms can represent foreign clients in international arbitration proceedings conducted in India.  This is surely going to boost India's image as a center for international arbitration.  Institutional arbitration centers such as the Singapore International Arbitration Centre (SIAC), the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) and the Hong Kong International Arbitration Centre (HKIAC) remain popular destinations for Indian parties.  In 2021, Indian parties were the top users of the facilities of SIAC with 164 parties and an additional 23 parent companies of parties hailing from India.1Singapore International Arbitration Centre, Annual Report 2021, at 21 (2022), https://siac.org.sg/wp-content/uploads/2022/06/SIAC-AR2021-FinalFA.pdf.X1  However, domestic institutions such as the Mumbai Centre for International Arbitration (MCIA), the Delhi International Arbitration Centre (DIAC) and the Indian Council of Arbitration International Arbitration and Mediation Centre (IAMC), Hyderabad, which was established in 2021, are gaining increasing traction and popularity for parties to international arbitration proceedings.2Chambers & Partners, International Arbitration 2022 – Law and Practice in India, https://practiceguides.chambers.com/practice-guides/international-arbitration-2022/india.X2  This growth in popularity has coincided with inflow of huge amounts of foreign direct investment to India.3See Arijit Barman & Bodhisatva Ganguli, India over the next 10 years will see a dramatic increase in FDI: Bruce Flatt, CEO, Brookfield, The Economic Times, Mar. 20, 2023, https://economictimes.indiatimes.com/news/company/corporate-trends/india-over-the-next-10-years-will-see-a-dramatic-increase-in-fdi-bruce-flatt-ceo-brookfield/articleshow/98788903.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cp)pst; see also FDI flowing out of China, into India: Noted economist Nouriel Roubini, Mint, Feb. 20, 2023, https://www.livemint.com/news/india/see-fdi-flowing-out-of-china-into-india-noted-economist-nouriel-roubini-11676875454197.html.X3  The immense inflow of capital and increase in popularity of arbitration institutions in India when coupled with the changes brought about by the Rules present a great opportunity for foreign lawyers/law firms seeking to establish a presence in the burgeoning international arbitration community in India.  However, whether this on its own is sufficient to make foreign parties choose India as a venue may be aspirational at best given the substantial economic burdens that the Rules impose on any foreign lawyer / law firm aiming to practice in India.  An individual foreign lawyer must pay a registration fee of US$25,000, whereas a foreign law firm has to pay double that amount.  These are considerable amounts which are likely to discourage foreign lawyers, especially solo practitioners, from practicing in India.  In addition to the above, registration has to be renewed every five years, entailing a renewal fee of US$10,000 for an individual or US$20,000 for a law firm.  Such registration and renewal fees are significantly higher than those charged in other jurisdictions.  This higher fee may hinder a number of foreign lawyers looking to set up a base in India.

Another significant aspect of the Rules is that registration of foreign lawyers/law firms are allowed only on a reciprocal basis, i.e., lawyers/law firms of only those nations would be permitted in India where Indian lawyers are permitted to practice.  The UK, Canada, Australia, Singapore, UAE, and a few other African and South Asian nations allow Indian lawyers to practice.  As far as the US is concerned, 34 States allow foreign trained attorneys to practice.  How the BCI would interpret this qualification provision with respect to lawyers/law firms from the US remains to be seen.  While uncertainties remain, these changes are sure to be lauded by international arbitration practitioners the world over, and bode well for India as a venue for arbitration in the years to come.

The new Rules reflect a sea change in the policy that had been place in India since time immemorial.  These Rules are likely to encourage foreign lawyers/law firms to tap into a hitherto unavailable market.  The Rules specifically providing for international arbitration is especially noteworthy as it recognizes the global nature of the practice of international arbitration.  These Rules also bode well for arbitral institutions in India which are likely to benefit if India is chosen as a seat for an international arbitration proceedings.  All things considered, the Rules are likely to propel forward the practice of international arbitration in India.