Confusion can easily reign about outsourced process agent services. Here at London Registrars, we frequently receive questions in relation to what these services exist for, when they become essential, and what exactly a process agent does.
You may be a decision-maker for an organisation that has been seeking to conclude a contract with an international company under English jurisdiction. If so, you might have been told that you must appoint a process agent in order for the agreement to be finalised.
This is, indeed, a typical situation in which a process agent may be appointed. In today’s blog article, however, we will shine a spotlight on several potential circumstances in which it may become essential for a party to a contract to put a process agent in place.
- When a contract is being completed across borders
We are now in a world in which it is customary for transactions to occur between different national jurisdictions. However, this doesn’t rule out scope for friction and delays – unless, of course, arrangements to avoid this are implemented.
As we alluded to above, it is common in situations where two parties in an agreement are based in separate parts of the world, for the contract to stipulate that English jurisdiction applies in the event of any dispute.
However, English court procedure rules dictate that any legal proceedings must be started with the serving of papers. This can be a difficult and longwinded task to accomplish if the defendant does not have an address within England.
This helps explain why it is normal for a party that is concerned about such a dispute potentially coming to pass, to insist on a UK-based process agent being appointed by the other party. Such an arrangement would give the appointing party an address in the country that would be valid for the serving of legal papers.
- When a financial transaction is being finalised
Process agent clauses are very common in financial and commercial transactions that take place across borders. A typical scenario is that in the case of a loan being sought, the lender will demand the appointment of a UK-based process agent.
Such a process agent, once appointed in relation to the particular agreement, will be able to receive any formal notices in the (hopefully unlikely) event of the borrower later defaulting on the loan.
This, in turn, will help save considerable time and expense for the lender that may be seeking to commence legal action against the foreign borrower.
- When arbitration proceedings take place
We have written previously here at London Registrars about how it isn’t technically “necessary” for a process agent to be appointed, in order for arbitration proceedings to take place between parties to a contract.
In practice, however, it is almost automatically the case that when arbitration proceedings occur, there will be a process agent in place. This is because when a cross-border contract is concluded, the parties will not know whether any future dispute will be resolvable using arbitration alone.
So, the supplier or lender (counterparty) will not conclude contracts on the basis that if any disputes arise, there will “only” be arbitration and court proceedings will not be necessary. They will want a process agent to be in place regardless of whether any disputes may be resolved by arbitration without a process agent strictly being “needed”.
While most arbitration proceedings may happen without court proceedings, arbitration is often needed before court proceedings are started, or in the middle of court proceedings. Judges will generally take a dim view of cases they deal with where no attempt at arbitration has been made.
To learn more about the potential relevance of a UK-based process agent for your situation, and how swift and straightforward a procedure it can be to set up an agreement with us, please contact the London Registrars team. You are also welcome to download our brochure for further information about our outsourced process agent services.