In today’s global economy, transaction parties are frequently located in countries different
from another. These so-called ‘cross-border’ transactions are often governed by (and subject
to) English law. A process agent may be required when a transaction party does not have a
physical presence in England, and the transaction is subject to English law. Understanding
the role of the process agent, and what is involved in appointing a process agent, can help
avoid costly delays in the closing of a cross-border transaction.
Why is a process agent needed?
In order to start English court procedures correctly, it is necessary to serve court papers to
the relevant transaction party. If a transaction party does not have a physical presence or
address within England, the process for serving these court papers can be very lengthy and
cumbersome, as they will have to be served abroad (where the relevant transaction party has
its presence). It is therefore a market standard, and in many instances a requirement by
transaction parties, that each transaction party with no presence or representation in England
appoints a process agent in England, and agrees that service at the address of its process
agent will constitute proper service for the purposes of the court procedures.
When is a process agent needed?
The role of a process agent can be vital for cross-border transactions under English law.
When any of the transactions parties are not present or represented in England, they may
need a process agent. Cross-border transactions that are frequently subject to English law
are loans (bilateral or syndicated), swaps (ISDA), credit facilities, leasing agreements, and
other types of funding instruments. For instance, assume a borrower located in France receives a loan subject to English law. The lender would typically require the French borrower to appoint a process agent in England in order to receive court papers on behalf of the French borrower, should court
proceedings become necessary. In addition, a process agent can also act in a broader capacity for the appointing company, including acting as a process agent for receiving documents in connection with arbitration proceedings and receiving notices under contracts where an independent party is needed.
What is important when appointing a process agent?
When choosing a process agent, it is not only important to engage a company that will
respond to your request quickly to set up the initial appointments, but one that understands
their role once appointed. A professional process agent will provide immediate notice of
receipt of any legal proceeding and will maintain an accurate database of its process agent
appointments and current contact information.
How can a process agent be appointed?
In many cases, the appointment of a process agent is a condition precedent to closing. The
following steps are typically required to appoint a process agent:
- Communicate the key information of the transaction to the process agent, such as name
of transaction parties, closing date, name of contacts, who should receive any service of
process. The process agent may have a standard form to provide this information.
- If the transaction requires bespoke process agent services, it may be required to deliver
all agreements in which process agent is to be named.
- Coordinate with the Process Agent to draft the appointment letter. The process agent may
have a standard letter.
Engaging the right process agent in advance of the closing date will ensure that its written
acceptance of the appointment is received by the closing date, thus preventing delays.
See this information in a pdf document: Role of Process Agent