An Indian ‘magic circle’ firm has criticised the formation of ‘best friend’ relationships in the country, saying they do not follow the spirit of rules on foreign lawyers.

Rajiv Luthra, managing partner at Luthra & Luthra, told the Gazette that his firm has turned down multiple offers to form best friend relationships from magic circle and UK City firms, as well as major US, Australian and Singapore firms, describing such relationships as ‘foggy’.

Rumours that a number of international firms are attempting to set up closer ties with Indian firms are rife. However, UK magic circle firms Slaughter and May, Freshfields and Allen & Overy, City firms Ashurst and Herbert Smith, and national firms DLA Piper and Eversheds told the Gazette they were not planning any short-term changes to their India strategies.

The news comes after magic circle firm Clifford Chance last week hinted at a future merger with Indian magic circle firm AZB after signing a best friends deal, while national firm Beachcroft entered into a joint venture with Indian firm Khaitan Jayakar Sud & Vohra.

Luthra said: ‘While these agreements are legal, they do not follow the spirit of the law. The Indian Bar Council has said that foreign lawyers should not be able to practise here.‘With these best friend relationships – it’s a bit foggy about how they work. I’m not happy with it and I have made that clear to all of the firms that have approached us.’

He said Luthra & Luthra would continue to accept work from foreign firms on a non-exclusive basis.

In December, India’s parliament passed a bill allowing the formation of limited liability partnerships. If secondary regulations are passed, there will no longer be a limit on partner numbers and foreign firms will be allowed to form their own India LLPs. However, full liberalisation is not expected for some time.