Fly In, Fly Out, Stay Put? In-house bar is pushing to open the door for non-Indian lawyers

Thursday, September 28, 2017 - 12:39

In January 2012 Amar Sarwal, chief legal strategist at the Association of Corporate Counsel (ACC), filed an affidavit in a case in India. Ironically, the country where multinationals often outsource their legal work is also a jurisdiction where non-Indians have not been able to practice law – even if it is non-Indian law. That is the issue in dispute that prompted Sarwal’s action. “By preventing foreign lawyers including in-house lawyers from providing legal advice on laws of their home jurisdiction and international law in India on a fly in and fly out basis to their clients,” Sarwal wrote, India has made it “difficult for companies to obtain immediate access to the most useful advice – useful because it comes from in-house lawyers intimately familiar with their companies’ day-to-day business affairs around the world.” It was an interesting argument for Sarwal to be making in the homeland of both his parents. The interview has been edited for length and style.

 

You submitted an affidavit in a case before the High Court of Judicature at Madras in India. How did you get involved?

Amar Sarwal: We got involved in this case, Bar Council of India v. A.K. Balaji & Ors., because of the interest of our members – in-house counsel who practice for multinational companies around the world and have operations in India. They alerted us to a petition that Mr. A.K. Balaji, an Indian lawyer, had filed with a lower court in India. It put forth that non-Indian lawyers should not be permitted to practice non-Indian law in India on a fly-in, fly-out basis. Our members were particularly frustrated with that approach, not only because they may not have been able to use the outside counsel of their choice, but because of the possibly broader implications of their own in-house counsel traveling to India to support business operations.

Earlier legislation and interpretations by the Indian Supreme Court had clarified that non-Indian lawyers could not practice Indian law in India, which, of course, has also been a source of frustration for outside law firms. This new development bothered non-Indian law firms even more because Indian law itself was not an issue.

Prior to this petition, had foreign, non-Indian lawyers been able to practice non-Indian law in India in some form?

Sarwal: As in most jurisdictions, it was less than clear whether there was authorization to practice on a fly-in, fly-out basis, rather than having a continuous, systematic presence within a jurisdiction. This issue has plagued bar regulators around the world, and India isn’t any different in that respect. But that lack of clarity, perhaps, was being exploited by non-Indian law firms, which had opened operations in India, or at least had been engaging on a fly-in, fly-out basis.

What were the court rulings in response to Balaji's petition?

Sarwal: In this matter, the Madras High Court approved of that particular fly-in, fly-out practice. The Madras High Court, in some ways, could be seen as similar to a federal court of appeals in the United States.

Interestingly, both sides of the case, Balaji and the Bar Council of India, have been less than supportive of non-Indian legal practice. The Bar Council has generally opposed non-Indian law practice by non-Indians in India. It just happened to be the regulatory authority, so that's why it was sued. It would be much like when a company sues the U.S. Environmental Protection Agency (EPA) in an environmental regulation context, and the EPA itself may not believe in the underlying regulation, but is required to defend it. The case was appealed to the Indian Supreme Court, and it has not yet decided the issue, although some members of the court have opined that non-Indian law practice in India should be permitted on a very broad basis.

Supreme Court justices expressing an opinion on a matter before them would be improper in the United States. Are there different rules governing such behavior in India?

Sarwal: That’s absolutely correct. The members of the Indian Supreme Court have indicated their position on liberalization in the legal sector in public speeches, and such comments in the United States would almost immediately lead to a recusal motion. That’s not to say the motion would be granted, but it would definitely lead to such a motion, which doesn’t apparently happen in India.

What else have you learned about laws and the practice of law in India?

Sarwal: India shares a lot of similarities with other bars around the world, particularly in common law jurisdictions. For instance, outside counsel costs tend to vary in the same way. Conducting cross-border litigation, as a number of parties in this matter have, including us, does require more sensitivity to different rules, particularly cultural sensitivity to timing issues. That’s probably true of any jurisdiction, but has definitely been instructive to us. Finally, recognizing that the government itself is interested in liberalizing the legal sector from a political standpoint, when these types of legal regulatory matters don’t often enter the political sphere.

Did you become involved in this case because you are the chief legal strategist at the Association of Corporate Counsel?

Sarwal: I took a special interest given that my family is of Indian origin, but actually, our team focuses on advocacy on behalf of the in-house bar. We support general counsel who are trying to align their talent worldwide, supporting their chief executive officers and perhaps engaging in joint venture opportunities with Indian businesses. The cross-border implications certainly had personal ramifications as well.

About your family, following a formal requirement in cases in India, the affidavit lists your father’s name. Tell us about your background.

Sarwal: My father grew up in Punjab, which is a state in northern India. My mother is of Indian heritage, but grew up in east Africa and then later in the United Kingdom. My father immigrated to the United States in the late 1960s to study various subjects at American universities. He liked it so much, he stuck around. I was born in the United Kingdom, but I grew up in the United States. It's an interesting twist on what we're talking about today. My Indian father came here to the United States to study and work as a professional in the American system, in the American economy, and in this particular case, non-Indians are going to India to do the same.

How has your family reacted to your involvement in this matter?

Sarwal: For any mother it's always a source of pride that her son is involved in a matter involving her home country. My father has since passed on, and it did make me think that he too would be pretty proud himself.

Do you have a special interest in India? Does this case have particular meaning for you?

Sarwal: Absolutely. There’s a large Indian community in the United States and in other countries in the West, and there are so many opportunities for cross-border cooperation and collaboration, led in part by those immigrants and their descendants. It's a shame if we don't take advantage of that, allowing non-Indian law firms and other in-house counsel to practice in India and exploit that opportunity. Considering my background, and also the work we do here in the United States and elsewhere, I've been personally involved, as has my team, in advocating for broader practice rights for non-American trained counsel in the United States, particularly inside counsel, allowing them to be trained in India or France, et cetera, yet able to practice in the United States as in-house lawyers. It's not only in my personal upbringing, but also the work that my team and I have been engaged in in the United States as well.

Not for the first time, there have been recent reports that India is about to open its doors to foreign lawyers who wish to practice there. What is the status of the Balaji case right now?

Sarwal: The Indian Supreme Court’s decision has been held in abeyance, pending negotiations among various parties – including the Bar Council, the Society of Indian Law Firms and other bar associations in India – to negotiate a liberalization regime for the legal sector. That effort has been ongoing for about four years and builds on efforts in previous decades. Over the last three to six months, it's become clear that Prime Minister Narendra Modi's government is particularly interested in opening up the Indian legal sector to non-Indian law firms, perhaps in quite a broad manner. Those various parties have been instructed to move more quickly in coming up with a proposal to make that liberalization happen.

They are interested in orchestrating a phased approach to liberalization, in which there would be some opening in the first few years, so that outside law firms could establish beachheads in specialized economic zones, and domestic law firms could gear up for the additional competition. After this first phase ends, there would be additional opportunities for outside law firms to move outside of the specialized economic zones. That’s generally where the conversation is, but there's definitely an appreciation on the part of domestic law firms that change is afoot. While liberalization might be phased, it's possible that it won't be. There might be more significant change even in the near term. This is based on the government of India's strong objective to open up the Indian economy more generally. If the Indian economy doesn't open up the legal sector, it's going to be much harder to convince businesses around the world to enter the Indian economy on other fronts.

The various parties are to be commended for their efforts to seek an extrajudicial resolution of this issue that can work for all parties. It's a source of inspiration for any kind of significant court case that the parties are working hard to find an answer. Unfortunately, when you have extrajudicial negotiations, they don't operate on a normal calendar, so it has taken a little bit longer than everyone would have liked.

You filed the affidavit in January 2012, and we're talking in August 2017. Does the long wait surprise you?

Sarwal: When we first filed, we thought that the underlying legal case was quite strong for resolving it in favor of non-Indian lawyers practicing non-Indian law in India. We felt that our intervention was merely to make sure that the interests of in-house counsel and their clients were safeguarded. We've since learned that the issues in the Indian legal sector are far deeper, and there's a broader reform that needs to happen. Waiting more than five years isn't ideal, but if those reforms do take hold, then all sides, including the Indian law firms themselves, will see a net benefit and the wait will be worth it.

Is this joint liberalization effort in response to your filing in this case?

Sarwal: No. It's largely responsive to Balaji's initial filing and then the appeal to the Indian Supreme Court. The in-house counsel perspective is extremely important for the larger Indian legal sector, because I think that's what Prime Minister Modi and others are focused on leveraging. At the end of the day, the government's insistence on seeing a liberalization regime, be it either phased in or imposed wholesale, is driven by the corporate sector, particularly multinationals, for which our members are the lawyers.

When do you think this issue is likely to be resolved?

Sarwal: It's hard to predict exactly, but given that it's a core part of the government's agenda, I would say that we should see a general sense of what the phased approach will be during the next year. I’ll add that the various parties are not discussing whether to have non-Indian law firms or lawyers practicing Indian law. That particular objection isn't new to us at the ACC. We see it worldwide. Our frustration, particularly when it's in-house counsel serving in similar roles around the world, is that such a restrictive approach to the practice of local, domestic law makes it very difficult for in-house counsel to do their jobs. Unfortunately, that's beyond the scope of this particular negotiation.


Amar Sarwal is chief legal strategist at the Association of Corporate Counsel (ACC) in Washington, D.C. He can be reached at Sarwal@acc.com.