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In an opinion rendered on the 19th of October, 2012 the United States District Court for the District of Delware ruled against Cadila Healthcare Ltd’s plea that its communications involving its Indian ‘in-house’ counsel were privileged and confidential under Indian law. While the opinion does not lay out the background context, I presume that the request was made by the plaintiffs in the litigation during the course of discovery.
The U.S. Court had appointed Justice Sri Krishna, a retired judge of the Indian Supreme Court as a neutral witness to render an opinion on the position of ‘in-house’ counsel in the Indian legal system and whether the communications involving such a counsel were confidential under Indian law.
Under Indian law, an advocate enrolled with the Bar Council has a duty of confidentiality to his clients under both the Evidence Act, 1872 (Section 126 & 129) and the ‘Professional Standards’ prescribed by the Bar Council of India. The focus of Justice Srikrishna’s opinion was whether an ‘in-house’ counsel for a company was an ‘advocate’ for the purposes of the above provisions.
Despite certain precedents of the Bombay High Court and Delhi High Court on the issue, Justice Srikirshna was of the opinion that ‘in-house’ counsels were not advocates since Bar Council rules (Rule 49) prohibited advocates from taking up ‘employment’ with corporations. In fact this is the position of the law in most countries and the U.S. is a rare exception where even ‘in-house’ counsel are given the same privileges as attorneys in law firms. The logic behind this rule is that ‘in-house’ counsel are not capable of independent advice as would be the case with an independent advocate.
This case should serve as an eye-opener for the pharmaceutical industry, both innovator and generic.
(i) The opinion of Justice Sri Krishna is available over here;
(ii) The Zydus brief is available over here;
(iii) The opinion of the U.S. Court is available over here.
We had covered a similar issue regarding patent agents, over here.
Dear Prashant:
I think J. SK’ opinion and the US district court both tried to do a quick job and hashed this.
I am an in-house counsel (conflict of interest) however, I think both the above parties did not do a proper job of looking at UK case law which usually is used by India in case of ambiguity.
Likewise, as you pointed out, the conflicting authority (in my view) was merely swept away without a proper analysis.
As the matter stands, the situation is problematic for in-house counsel.
Freq. Anon.
I think the US court indeed has made a hasty attempt to close such significant matter… may be because the plaintiff was a US company (I Smell Bias X-( ).
Agreed S. 126 would not be applicable to in-house counsels, but what about S. 129 (as you discussed in the other post) of the Evidence Act (Confidential communication with Legal Advisers) wherein all the communication with the ‘Legal Professional Adviser’, who has ofcourse not been called to witness is protected.
Especially in light of absence of any word like client which is there in S. 126, it clearly indicates that the Section must have been envisaged for no one but in-house counsels!
I think Respected Justice SriKrishna has either overlooked the Section or there is something that I am missing here…
I have read the opinion of Justice Srikrishna. I think he is right in his opinion. Mr. Freq. Anon seems to be wrong when he/she says “both the above parties did not do a proper job of looking at UK case law which usually is used by India in case of ambiguity”.
It has been made clear in page 15 of the opinion that “This is an area where Indian Law differs from the English law because of the effect of the1961 Act”. This has been opined after discussing the position in the European countries.
Mohan Vidhani, Advocate