American Court rules against confidentiality for Cadila’s ‘in-house’ Indian counsel

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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.