You donā€™t need to look elsewhere for an English-speaking outsourced process agent

There are many reasons why the appointment of an English-speaking outsourced process agent can make practical sense, in addition to being reassuring to all affected parties. 

According to English court procedure rules, in order for proceedings to be started correctly, it is necessary to serve papers. This may be a relatively straightforward process if the party that is to receive such papers has an address in England. 

However, in todayā€™s world of routine cross-border commerce, there can be many situations in which this is not the case. 

A UK-based outsourced process agent could give your organisation an important UK presence for receiving notices 

Yes, in situations like the aforementioned, papers could theoretically be served outside the UK, in a country where the given entity does have an office. However, this can be a longwinded and complicated task ā€“ one that becomes even more so if there are any language barriers making communications between the various parties more difficult. 

So, if ā€“ for example ā€“ you are an organisation based outside of the UK that is dealing with suppliers or tenders in the UK, and you donā€™t have an office in the UK, agreeing to appoint a UK-based and English-speaking outsourced process agent could be a straightforward way to give your organisation such a UK presence. 

This UK-based process agent would then be able to receive formal notices on your behalf. Such a process agent could act in a relatively broad capacity for your organisation in the UK ā€“ receiving documents, for instance, in connection with arbitration proceedings, and receiving notices under contracts where there is a need for an independent third party. 

The appointment of a UK process agent might be very far from an ā€˜optional extraā€™ 

You might have heard that it isnā€™t legally mandatory to have a process agent in the UK, which may have caused you to question the need for one. 

In practice, however, if you are an entity outside of the UK looking to enter an agreement with a UK organisation under English law ā€“ a classic example being an organisation in America raising a loan from a City institution ā€“ the UK-based party will often refuse to provide you with the given loan or service unless you agree to appoint a UK process agent as part of the contract. 

This is an important protective measure for the UK-based service or loan provider. It gives them a route to enforcing the terms of the contract if this becomes necessary at any stage, such as if the borrower from outside the UK defaults on the loan. 

Here at London Registrars, we have a well-established reputation as an English-speaking outsourced process agent that acts with the utmost professionalism at all times. We can set up a process agency agreement with your organisation on the same day we receive your instructions and remittance. 

When it comes to dealing with all the complexities of contracting across national borders, it is hugely important to introduce simplicity and predictability to arrangements such as the agreement you have with your chosen UK process agent. 

A further benefit of choosing a well-regarded English-speaking outsourced process agent like London Registrars, is that you can expect quick and easy-to-understand answers to any questions you have. So, please donā€™t hesitate to contact us for further information and advice in relation to our process agency services and expertise. 

Do you need an outsourced process agent for arbitration?

In todayā€™s world in which transactions between entities routinely take place across national borders, certain complexities and challenges can arise when a dispute occurs between such contracting parties. 

The appointment of an outsourced process agent for contracts can provide much-needed certainty in such scenarios. 

But what exactly is a process agent, and what difference can it make to have a process agent in place for a contract between two parties in different jurisdictions? 

Introducing the ā€˜process agentā€™, and why it can be so important 

A process agent ā€“ sometimes referred to as an ā€œagent for service of processā€ ā€“ is an independent third party that receives documents, notices, and arbitration or court proceedings on a clientā€™s behalf. They are, in effect, a local representative for a client that doesnā€™t have a registered office in the jurisdiction where the transaction takes place. 

Here at London Registrars, for instance, we have long acted as an outsourced process agent for contracts in the UK, in situations where our client is based abroad and lacks a UK registered office. 

As a process agent, then, we can accept service of notices, proceedings, or documents on behalf of our clients outside the UK. In situations where there isnā€™t a UK process agent in place for a contract between a UK party and a non-UK entity, any such court papers or documents would need to be served to the transaction party in the jurisdiction where it does have a presence.

While the aforementioned requirement to sometimes serve papers abroad is in accordance with English court procedure rules, it can be a very lengthy and cumbersome process. Unsurprisingly, then, in the case of contracts that are subject to English law, it is commonly required for a transaction party that does not have a physical presence in England to agree to a UK process agentā€™s appointment. 

What is arbitration, and what is its relevance to process agents? 

Arbitration is a form of dispute resolution whereby the parties to a contract agree to have a dispute between them resolved by a third-party decision-maker, instead of through litigation. Crucially, the contracting parties also agree that the third partyā€™s ruling will be legally binding on them. 

Although the appointment of a process agent is not a strict necessity in order for arbitration proceedings to take place, it can help with aspects of this process. The process agent being in place as part of a contract means that if a dispute occurs, the process agent can receive documents related to arbitration proceedings on their clientā€™s behalf. 

So, when it comes to the notification process for arbitration proceedings, and clearing up any ambiguity in terms of how disputes will be dealt with, a process agent can play a critical role. This will help to ensure that any disputes are resolved properly and quickly, so that both parties can then move forward. 

Enquire to our team to find out more about our UK process agency service 

If your organisation does not have a registered UK address, and you are therefore on the lookout for an outsourced process agent for contracts that are subject to English law, please donā€™t hesitate to contact London Registrars

You are also welcome to download our process agency brochure to learn more about the peace of mind and assurance that this vitally important service can bring. 

Download our brochure today to learn more about our process agent service

The term ā€œservice of processā€ is one that all manner of organisations both within and outside the UK should be acquainted with; it refers to the actions that a court requires in order for documents used in court proceedings to be brought to the attention of one of the parties in the case. 

This is where a service of process agent can play a crucial role. In a situation where a business from outside of the UK is dealing with a company or institution within the UK (for example, an overseas business is attempting to raise a loan from a City institution), a UK process agent having been appointed can greatly help ensure formal notices are properly served. 

What actually is a service of process agent? 

The simple way to describe a service of process agent (also known as a ā€œprocess agentā€, or even a ā€œregistered agent for service of processā€) is that they accept service of notices, proceedings, or documents on behalf of their overseas clients. 

A UK-based process agent would therefore play an invaluable role in a situation where notices cannot be served in another country (as might be the case because of contractual obligations, for instance). 

English court procedure rules state that papers must be served in order to start proceedings correctly. This would present potential difficulties in cases where one of the parties in an agreement does not have an address in England. 

So, you can probably begin to see why a UK entity or organisation that provides a service or loan to an overseas business, often only agrees to do so on the condition that the overseas entity appoints a UK process agent. 

As part of such an arrangement, the foreign company would have to agree that service at the UK process agentā€™s address would constitute proper service as far as court procedural requirements are concerned. 

Thereā€™s no need to look further for a reputable process agent in the UK 

If you are presently on the lookout for the right UK service of process agent, you are likely to be impressed by the sheer comprehensiveness and cost-effectiveness that our process agent service represents. 

Operating from our central London office, London Registrars can and will act as a process agent for court actions, alongside receiving documents in relation to arbitration proceedings, and receiving notices under contracts where there is a need for a third party. 

We are able to act as a service of process agent for foreign companies that lack a branch in Great Britain. And such is our impeccable track record of conducting ourselves impartially in such situations, we can even act on behalf of more than one party to a given document. 

You can learn more about what London Registrarsā€™ process agent service entails, as well as our charges for this service, by downloading our process agency brochure today. If you then conclude that you would like to proceed to take advantage of our service, or if you have any further questions to ask, please feel free to contact us via phone or email

An introduction to process agents, and the purposes for which they are used

Our team here at London Registrars has long provided all manner of organisations that are based outside of the UK, but that are nonetheless dealing with UK-based suppliers or tenders, with the benefit of a complete process agency service. 

But exactly what purposes are fulfilled by process agents, especially in England and Wales? Below, we have set out many of the essentials. 

What is a process agent? 

The simple way to define a process agent, is that they are a representative upon whom it is possible to serve court papers. 

Process agents by no means only exist and operate in the UK. Indeed, in the United States, they are generally a legal requirement at state level, although on that side of the Atlantic, a process agent is often referred to as a registered agent, a resident agent, or a statutory agent. 

Truck drivers, freight forwarders, and brokers are also known to use process agents in the US. Again, however, there are differences in terminology, with process agents that provide nationwide coverage for motor carriers tending to be called ā€œblanket companiesā€. 

So, what is the situation with process agents in the UK? 

In the UK, the English Civil Procedure Rules make clear the importance of following the appropriate processes for serving papers in order to start proceedings. 

However, difficulties can arise when one of the parties in a dispute does not have a UK address, with it potentially being a complicated and longwinded matter to attempt to serve papers. In such circumstances, it might be a challenging matter to ensure proof of service. 

It is for these reasons that the Civil Procedure Rules allow for the appointment of a process agent. This entails a contractual agreement that for the purposes of Rule 6.1.1 of the Rules, service at the process agentā€™s address will constitute proper service. 

In order for Rule 6.1.1ā€™s requirements to be met, an appropriate contractual clause must be included in the agreement, setting out information about the appointment. 

A similar process can be followed for appointing a process agent for the purposes of arbitration proceedings. 

An easily overlooked role, but an utterly crucial one for many organisations 

All in all, process agents play a vital role for a wide range of organisations that might need to deal with banks, suppliers, or tenders in the UK.

These professionals are able to accept service of notices, proceedings or documents on behalf of a client from outside the UK, if serving these abroad is not a feasible option. 

Process agents can act in a broad capacity for the companies that appoint them ā€“ for example, by acting as a process agent for court actions, receiving documents in relation to arbitration proceedings, and receiving notices under contracts where there is a need for an independent party. 

One classic example of a situation in which a process agent might be appointed, is when an organisation from outside the UK is looking to gain access to a loan from a City institution. In such circumstances, the lending bank will often expect a UK-based process agent to be appointed, so that in the event of the borrower failing to keep up with repayments on the loan, the process agent can be served formal notices in relation to this. 

Are you on the lookout for the most reputable process agents for your organisation? 

If you are an entity from outside of the UK that is presently comparing process agents, you may be pleased to learn about London Registrarsā€™ formidable reputation in this regard

To learn more about how we can be the reliable England-based company that acts as your organisationā€™s comprehensive and cost-effective process agent, please donā€™t hesitate to fill in and submit our online contact form, or to call us on 020 7608 0011. 

Joe Biden suggests United States investors could ā€˜tripleā€™ their investment in Northern Ireland

Many an organisation making use of a process agent in the UK would have had reason to take an interest in President of the United States, Joe Bidenā€™s recent tour of Ireland ā€“ particularly the prospect he raised of economic benefits for Northern Ireland if power-sharing is restored. 

Mr Bidenā€™s visit to both Northern Ireland the Republic of Ireland marked the 25th anniversary of the Good Friday Agreement, the landmark peace deal that helped bring an end of most of the violence of the Troubles. 

What did Mr Biden say about prospects for trade?  

In a speech to an audience in Belfast which included representatives of Northern Irelandā€™s five biggest parties, Mr Biden expressed hope that the regionā€™s power-sharing government ā€“ a key element of the 1998 agreement ā€“ would be restored. 

The devolved Northern Ireland Assembly has not met for over a year, due to a dispute about trading arrangements following the UKā€™s departure from the European Union. 

However, the US president ā€“ who is fiercely proud of his own Irish ancestry ā€“ suggested that the region could see an economic windfall in the event of a return to stable devolved government. 

In his keynote address at Ulster University, Mr Biden paid tribute to work done by the UK and the EU to agree the Windsor Framework addressing rules around the movement of goods post-Brexit. 

He said that the last 25 years had seen a doubling in Northern Irelandā€™s gross domestic product (GDP), and that ā€œjust in the last decadeā€, nearly $2 billion in investment from the United States had gone into the regionā€™s economy. 

He added: ā€œI predict to you if things continue to move in the right direction, [it] will more than triple. There are scores of major American corporations wanting to come here, wanting to invest.ā€ 

Referring to the cyber and tech sectors, green energy and young entrepreneurs, the president said that Northern Ireland had ā€œincredibleā€ opportunities to lift itself into becoming a major part of the economy of the UK. 

He said that Joe Kennedy III, his special economic envoy for Northern Ireland, would be heading a trade delegation to the region ā€œmaybe later this yearā€ to ā€œsuperchargeā€ a new investment wave. 

Expressing hope that ā€œthe assembly and the executive will soon be restored,ā€ the president added: ā€œThat is a judgement for you to make, not me, but I hope it happens.ā€ 

Could heightened investment mean a greater need for process agency services? 

Here at London Registrars, we are more than familiar with the challenges of working across borders; we have long provided the benefit of a process agent in the UK to a range of overseas businesses dealing with suppliers or tenders in the UK, or that are attempting to secure a loan from a City institution. 

The right process agent in the UK can provide crucial certainty to both parties in a transaction, with the ability to accept service of notices, proceedings, or documents on behalf of overseas clients in situations where serving them abroad isnā€™t an option. 

Whether you are an overseas business looking to do business in Northern Ireland, or you have a different set of circumstances and needs, you can learn more about our comprehensive and cost-effective process agency service by reaching out to us via phone or email today

What qualities should you be looking for in a process agent service?

Hopefully, regular readers of the London Registrars blog will be in no doubt about the importance of a process agent service for many organisations, which might include their own business. 

Various case studies and disputes from down the years have shown that, for a firm based outside of the UK that is attempting to raise a loan from a City institution, or that is otherwise engaging with suppliers or tenders in the UK, a process agent can play a crucial role. 

A process agent in the UK is also sometimes referred to as a registered agent, or an agent for service of process. Their ability to accept service of notices, proceedings, or documents on behalf of overseas clients can be invaluable ā€“ but what should you be specifically seeking when you are comparing options for a process agent service? 

We decided to pick out a few of the most important qualities to look out for. 

A suitably comprehensive service 

What, exactly, is the process agent service that you are considering actually offering to your organisation? 

In the case of our own commercial agency service here at London Registrars, for instance, we are able to act as a process agent for court actions, receive documents in connection with arbitration proceedings, and receive notices under contracts where there is a need for an independent party. 

We routinely act as a process agent for overseas companies that do not have a branch in Great Britain. It is also worth noting that we are able to act on behalf of multiple parties to a document. 

Responsibility and efficiency 

You probably wonā€™t need us to tell you how crucial speed and responsiveness are from a process agent service; whether documents are served to your process agentā€™s office via courier or email, you will want to be sure that the designated person will deal swiftly with them. 

Any delays to this process ā€“ for example, the classic case of a document that is crucial to a transaction being left unclaimed for an extended period of time due to the process agent being too busy with other activities ā€“ could mean detrimental legal consequences and potential liability for your organisation or the counterparty. 

You will be pleased, then, to hear that speed and efficiency are among the uppermost priorities we have always had for our own process agent service here at London Registrars. This emphasis is apparent from the very start of our relationship with a client, as we always try to have an agreement set up on the same day we receive instructions and remittance from the client. 

A reasonable cost 

One of the good things about a process agent service in general is that it does tend to be relatively low in cost. 

Nonetheless, we appreciate that it will greatly help your organisation to budget if you know in advance the pricing structure for the process agent service you are considering using. You might therefore wish to download our process agent brochure to learn more about our charges.  

Independence 

Every party in a given transaction will need to be sure that the process agent they choose will practise the appropriate levels of discretion and confidentiality, providing the requested service in a highly professional and timely manner. 

They will certainly want to be confident of their chosen process agency serviceā€™s complete independence, and this is something else that we can assure you of here at London Registrars. Make us your choice of process agent service, and even if we are acting on behalf of multiple parties to a document, we will work confidently with you, while not creating any conflicts. 

Would you like to learn more about what a relationship with the right process agent service could look like for your organisation? If so, our team here at London Registrars is more than prepared to have that conversation with you. Simply email or call us today, on 020 7608 0011, to discuss our requirements and the possibilities for working with us. 

It can make a significant difference when a process agent appointment is expressly stated to be ā€œirrevocableā€

In many of our recent blog entries here at London Registrars, we have drawn attention to the considerable effect that process agents can have in relation to disputes that arise between multiple parties. 

The conclusion of one such dispute several years ago, between the Greek lender Piraeus Bank and three defendants, served as a further demonstration of the crucial service performed by process agents. 

What were the details of this case? 

The dispute in question ā€“ Piraeus Bank v Grand Anemi Limited (and others) [2018] EWHC 974 (Comm) ā€“ related to the breach of a 2009 loan agreement (and related indemnities) between, among others, Piraeus Bank and Grand Ameni. 

Under this loan agreement, $86 million was owed. The borrower and the corporate guarantor were companies incorporated in Malta and the Marshall Islands that later ceased to function. 

Contained in the agreement was a provision irrevocably appointing a London service agent, who would have the responsibility of acting as an agent for Grand Ameni and receiving and accepting any documents related to English proceedings. 

Piraeus Bank later served proceedings on Grand Ameniā€™s agent, only for the agent to resign two weeks later. 

What was the ruling of the court? 

Jacobs J ruled that Piraeus Bankā€™s service of the Claim Form on the defendants in the case via a contractually nominated service agent in London had been valid service, given that the appointment had been irrevocable. It therefore did not matter in this regard that the service agent later purported to resign from the appointment. 

As a consequence of this, it was possible for any further documents to also be served on the nominated service agent. In addition, the court granted permission to serve the personal guarantor, a Greek national, outside of the jurisdiction via a contractually nominated attorney-at-law in Greece. 

Important lessons arose from this case in relation to process agents 

The outcome of this dispute underscores how vital it is to make sure any appointment of a process agent is expressly stated to be ā€œirrevocableā€. 

Doing so will mean that in the event of the agent resigning or the relevant defendant withdrawing the agentā€™s authority, service may still be affected on that agent, unless the parties expressly agree to a different means via which service can be affected.  

Is your organisation in need of the services of process agents to enable your compliance with contractual obligations? If so, we can take on this crucial role for your organisation here at London Registrars, helping to ensure the utmost peace of mind; simply call 020 7608 0011 or send us an email for further information. 

How does a ā€˜process agentā€™ differ from a ā€˜registered agentā€™?

For all manner of organisations both within and outside the UK, there will undoubtedly be a need to get to grips with a wide range of different requirements, functions and terms so that they can ensure compliance with various legal and/or contractual obligations.

One such function is that of the process agent, which can be a source of confusion for some organisations, not least given the many different terms that can be used in reference to what is essentially the same role.

You might have come across mentions of ā€œprocess agentā€, ā€œagent for service of processā€, or ā€œresident agentā€, which all refer to basically the same thing.

Within the UK, a ā€œprocess agentā€ may also be called a ā€œregistered agentā€. In both cases, the ā€œagentā€ is someone who accepts service of notices, proceedings or documents on behalf of their overseas clients.

This arrangement helps to ensure that in the event of a dispute between two parties based in different jurisdictions, it will be possible for papers to be correctly served via the defendantā€™s process agent, instead of the claimant needing to attempt to serve those papers abroad ā€“ the latter an often complicated and lengthy process.

So if, for instance, you are a non-UK business looking to raise a loan from a UK institution, the lending party will almost certainly demand that you appoint a UK-based process agent, to facilitate the means of redress in the event of you defaulting on the loan.

So, would a process agent and a registered agent be exactly the same role?

This is where matters can become slightly more complicated. Although within the UK, a ā€œprocess agentā€ and a ā€œregistered agentā€ can be taken to be essentially the same thing, this is not necessarily the case in other parts of the world.

In the United States, for example, while a process agent and a registered agent can both be considered an agent for service of process, a registered agent may be appointed by a company that is forming a business in another jurisdiction or looking to do business in that jurisdiction, and it is a role that is more public than that of a process agent.

Most US states require the name and contact information of a registered agent to be included in the businessā€™s formation documents. This means a given companyā€™s registered agent will be a publicly listed entity.

The role of a registered agent in this context, then, would be as a designated person to receive service of process and other official documents on behalf of a registered business entity such as a limited liability company or corporation. The registered agent would then be responsible for informing a member of the business (usually a contact named in the process agency agreement) or the corporate secretary, the director or governance officer ā€“ of the documents having been received.

It might seem a subtle difference between a process agent and a registered agent, but in summary, a registered agent is appointed in public documents for entity formation, whereas a process agent is appointed in private contracts.

And whereas a loan agreement is a typical example of when a process agent might be required, in the US, a registered agent would be needed for the purposes of public record filing with the Secretary of State (SOS), or whatever the equivalent office would be in other jurisdictions.

In the UK, there is a need for a company being formed to have a registered office in the country of incorporation; however, this is not a direct equivalent to the registered agent role in the US.

If you have been a party to a contract requiring the appointment of a process agent in the UK, why not make London Registers your agent for service of process?

Hopefully, the above has helped make clear that whether you are in need of a process agent or a registered agent, it can be a crucial role for someone to occupy on your organisationā€™s behalf.

To learn more about our own process agency service or any of the other ways in which we can assist with your organisationā€™s day-to-day governance and compliance needs, please feel free to contact our team by phone or email.

January 2023

Irrevocable process agent clauses can have a strong role to play

As we have previously referenced here on the London Registrars blog, a process agent in the UK can provide an invaluable service for non-UK based entities.

English court procedure rules require that papers be served in order to start proceedings correctly. However, it can be a lengthy and complex process to attempt to serve such papers abroad, in the event that a party to an agreement does not have an address in England.

It is precisely because of this that many a UK entity providing a service or loan might demand that an overseas entity appoints a process agent in the UK. Such an arrangement typically involves the overseas entity agreeing that service at the UK process agentā€™s address would constitute proper service for the purposes of the court procedural requirements.

A disagreement over an ā€œincorrectā€ process agent or address

A fascinating case study of the crucial role that a process agent in the UK can play is provided by one dispute that arose some years ago, in the case of Aquila WSA Aviation Opportunities II Ltd v Onur Air Tasimacilik.

The details of the case were as follows: Aquila, a finance company in Ireland, entered into an aircraft lease agreement with the Turkish airline, Onur Air. Included in the lease was a non-exclusive jurisdiction clause in favour of England, and the lease was governed by English law.

Another important part of the agreement was a process agent clause, which required Onur Air to irrevocably appoint Corporation Service Company (CSC) as its English-based agent for service of proceedings. It was also stipulated by the clause that, in the event of the agentā€™s appointment being terminated, Onur Air was required to appoint a replacement as soon as practicable.

Prior to completion, a letter was provided by Onur Air, confirming that Corporation Service Company (UK) Limited (CSCUL) had been appointed as its process agent. The letter said that the appointment was effective for one year.

Fast-forward another 15 months, and Aquila tried to serve proceedings on the agent set out in the lease ā€“ CSC ā€“ at the address given. It turned out, however, that there was no such entity as CSC, with the stated address being a building site.

Aquila then turned its attentions to effecting service on Corporation Services Company Limited (CSCL) at its registered address, relying on the fact that the person who accepted the documentsā€™ delivery confirmed he was able to accept service on Onur Airā€™s behalf.

Not only this, but Aquila sent copies of the proceedings to Onur Airā€™s address in Turkey, ā€œfor information onlyā€. The airline also accepted that it had become aware of the proceedings.

Despite all this, Onur Air brought an application disputing service, on the grounds that the agentā€™s appointment had lapsed, and/or service was affected on the wrong entity, and at an address that was not stated in the documents.

English courts donā€™t look favourably upon parties that unreasonably try to evade service.

The court accepted that the proceedings had not been served with ā€œall the perfection and form which is technically requiredā€. However, it ordered that instead of Aquila being required to make another attempt at serving the proceedings, or making an order for substituted service, the proceedings should be deemed as having been served in a valid manner.

Aquila had demonstrated good reasons for the steps that it had taken, this being a case of a genuine attempt to serve proceedings. It was also noted that CSCL and CSCUL had the same registered address, and were part of the same corporate group.

The court also gave considerable weight to the fact that Onur Air had found out about the proceedings through the initial attempted service on CSCL, in addition to being notified more informally by the copy that was sent to its Turkey address. Indeed, the airline had filed an Acknowledgement of Service within two weeks of service, so it could not be said that Onur Air had been in any way prejudiced.

Overall, the case demonstrates just how powerful irrevocable clauses in contracts can be ā€“ and the crucial part that can be played by a process agent in the UK.

It is further evidence that the courts will not allow someone without any control over the appointment of an agent, to be disadvantaged at the hands of a defaulting party. Instead, the emphasis is placed on the importance of the appointing party keeping its arrangements up to date.

The case draws attention, too, to the need to ensure the process agent clause is drafted so that all appropriate provisions are included, not least a mechanism for the nomination of replacement agents.

Our process agent service can help bring your organisation peace of mind.

Are you interested in learning more about how London Registrars can act as your cost-effective and dependable process agent in the UK, helping to ensure your organisation complies with its contractual obligations?

If so, you are very welcome to reach out to us by phone or email, so that you can have an in-depth conversation with us about our expertise and services.

December 2022

A possible consequence of not appointing a process agent

If you have ever questioned the crucial role that process agents can play in financial transactions between UK and non-UK parties, it might be instructive to look at just one example of a dispute that arose several years back.

The case in question, Banco San Juan Internacional, Inc. v Petroleos De Venezuela, S.A., culminated in an English court considering whether the borrowing party had been validly served, in a situation where the borrower had not complied with its contractual obligation to make sure there was always a service of process agent in place.

What were the details of the case?

The two parties in the proceedings were the Puerto Rican bank, Banco San Juan International SA (BSJI), and the Venezuelan oil company, PDVSA. The two parties entered into a loan facility agreement dated 2016, and then another in 2017.

Contained within these facility agreements were identical process agent clauses, as are widespread in cross-border financial transactions.

The clauses set out that the borrower ā€“ PDVSA ā€“ was ā€œobliged forthwith to appoint a process agent to be an authorised agent for service of proceedings in Englandā€, and that ā€œif for any reason the process agent ceases to be such an agent, then PDVSA must forthwith appoint a new agent and notify that appointment within 30 days of the process agent ceasing to be agent.ā€

Crucially, the contract also followed this up with: ā€œIf PDVSA fails to comply with its obligation to appoint a new agent for the service of process, the lender may appoint an agent for service of process on PDVSA.ā€

In line with the requirement of the 2016 facility agreement, PDVSA put in place a process agent; however, when this appointment lapsed in 2019, the company did not appoint a replacement. The 2017 facility agreement, meanwhile, never saw a process agent appointed by PDVSA.

BSJI and PDVSA subsequently found themselves in dispute, and with there not being any process agent in place as appointed by PDVSA, BSJI made its own appointment of a new process agent on the borrowerā€™s behalf.

PDVSA did not acknowledge service, and when BSJI applied for summary judgement, the borrower argued that the sending of the claim to the new process agent did not constitute good service on PDVSA.

What was the outcome of the court case?

PDVSA made a number of arguments in its defence in the case. These included that BSJIā€™s direct appointment of the new process agent without PDVSAā€™s approval meant the new process agent could not be said to be an ā€œauthorised agentā€, as the process agent clause required.

The borrower also argued that the process agent clause did not survive after the date on which BSJI had refused to advance further sums to PDVSA in accordance with the facility agreementsā€™ terms.

In addition, PDVSA reasoned ā€“ with regard specifically to the 2017 facility agreement ā€“ that the borrower could not be said to have failed to appoint a ā€œnewā€ process agent, given that no process agent had ever been put in place in relation to that facility in the first place. It said that this meant BSJI should not have the right to appoint an agent on the borrowerā€™s behalf.

The Judge (Foxton J), however, rejected these arguments. The court stated that the reference to an ā€œauthorisedā€ agent, for example, must mean authorised under the terms of the credit agreement. The court concluded that if the bank appointed an agent on the borrowerā€™s behalf after the latterā€™s failure to do so, then by definition, that agent was the defendantā€™s ā€œauthorisedā€ agent.

Foxton J also stated, in response to the defendantā€™s argument that it was ā€œunfairā€ for it to have a process agent imposed on it that was not of its own choosing, that there was no such unfairness, reasoning: ā€œIf the defendant did not want to be at risk of an agent being appointed who it does not like [or] on terms of appointment that it did not like, all it need do is comply with its contractual obligation to appoint an agent in the first place.ā€

Finally, with regard to the 2017 facility agreement, the Judge also objected to the defendantā€™s interpretation of the word ā€œnewā€ in the context of the clause. He said that the bankā€™s ability to put in place a new process agent for that agreement did not depend on the borrower having previously appointed an agent, likening the situation to one where ā€œsomeone who has never owned a coat may still be said to buy a new coat, notwithstanding the fact that it is not a replacementā€.

A reminder of the significant role that a process agent can have

The above may have been just one judgement, but it nonetheless underlines just how crucial it can be to ensure the appointment of a service of process agent in relation to cross-border transactions.

For a more in-depth discussion of the comprehensive and cost-effective process agent service that London Registrars can provide, and to take your first steps in what could be a longer-term relationship with us, please do not hesitate to contact our team.

November 2022