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In Liberalization push, India may  face law firm hurdle

India’s law firms might be the last obstacle to the government’s plans to liberalize its legal industry, after the country’s most prominent law firm association sought responses to a recent government plan to allow foreign law firms to operate within special economic zones (SEZs).

Earlier the government amended a rule that would allow foreign law firms to operate from SEZs. “Some of the services of foreign lawyers that are outside the purview of Indian regulators include advice on foreign law and foreign-law related transactional advisory and International arbitration,” said Manoj Kumar, founder of law firm Hammurabi & Solomon.

“The government of India has expanded the definition of services in the context of SEZs to include foreign lawyers, thereby permitting foreign lawyers to set up offices (in those),” added Kumar, who is helping draft guidelines for the liberalization of the legal sector.

In response, the Society of Indian Law Firms, which comprises the country’s 100 largest law firms, has sent a questionnaire to its members seeking their response to this “sudden and significant development,” according to media reports.

The questions included whether such a notification could be issued by the Department of Commerce in the first place; whether the Bar Council of India had given its approval and who would monitor the foreign law firms; and whether foreign law firms could practice throughout India from the SEZ.

Kumar said he expected the liberalization process to proceed rapidly, and that 2017 would be the year that world-class legal services were available to Indian entepreneurs at their doorsteps. At the same time, liberalization of legal services will have to be accompanied with other initiatives to increase the comfort level of consumers of legal services to not look beyond Indian shores to access first-rate legal services.

“The challenge is to gain the confidence of foreign business operating in India,” explained Kumar. “This will need reform in the arbitration laws as necessary to enable all stakeholders to look at India as the hub for all International mediation, conciliation and arbitration. The need to do business in India but seek legal support and resolve dispute outside India should go.”

He concluded that in the meantime, India lawyers should not be unduly worried. “There are enough safeguards in the India Advocates Act, 1961, to protect the concerns of Indian lawyers on issues of practice of Indian law and litigation by foreign lawyers in India,“ Kumar said.

Indian lawyer barred to appear before the Supreme Court of Singapore

The Supreme Court of Singapore has disallowed senior advocate Harish Salve from appearing before it on behalf of corporate sellers of Ranbaxy, who are seeking to set aside an award in excess of $500 million by a local arbitration panel to purchaser Daiichi for not revealing the risks involved in the buyout.

Salve, in the first such application made by a senior advocate from India, made an application to the Singaporean Supreme Court seeking to argue against the award on behalf of the sellers. He has appeared earlier for the sellers in the Delhi High Court.

Former Ranbaxy promoters are accused of concealing information regarding wrongdoing at Ranbaxy when they sold a majority stake in it to the Japanese firm in 2008. The sellers are seeking to have the award either set aside or a reduction in the quantum, in appeal. Daiichi, on the other hand, has applied to the court to have the award enforced.

Salve filed an application in the top court seeking exemption from a Singapore law which bars foreign lawyers from appearing in local courts unless the court felt a “need” for his assistance considering his special qualifications or experience. He also mentioned his ample experience in this field to argue for an exception to be made in this case.

But the Singapore Supreme Court in a decision on February 17, 2017, refused to allow him to appear citing several reasons for this.

Among other things, the court said that no questions of Indian law were involved at this stage. when issues related to the Indian law had arisen, the sellers had employed senior counsel from Singapore, the court noted, and only led evidence from Indian law experts to defend their cases.

The court also said that foreign lawyers could be allowed in specific cases, but observed the party seeking to engage them has to first prove that such law was involved in the case, before pressing for counsel from that country. The court imposed a $8,000 costs before dismissing the application, but the costs would be paid by the true party who stood to benefit from the application, not Salve.

Source: ICA Arbitration Quarterly

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