In our previous blog post here at London Registrars, we wrote about the significance and role of a process agent service, including what a process agent is, in what circumstances it might be needed, and who can act as a process agent.
Turning to part two of our guide, we will answer more of our readers’ and clients’ pressing questions, so that you can be sure of only making the most informed decisions for your own organisation’s requirements.
What is a process agent letter?
The term “process agent letter” refers to the letter that appoints a process agent in England and Wales (also known as the Process Agency Agreement) so that the agent can accept legal proceedings on behalf of a party that has submitted to the English courts’ jurisdiction, but which lacks a registered office in the jurisdiction.
How might a process agent be involved in a loan agreement?
A process agent service is often especially appropriate in situations involving loan agreements – for example, where an organisation from outside the UK may wish to borrow money from an institution based inside the UK, or from any organisation under UK jurisdiction.
In this situation, the borrower can expect to have to agree to the appointment of a process agent, as part of the conditions set by the lender. This, in turn, will mean that in the event of the borrower failing to keep up with their repayments on the loan, there won’t be a need for the UK lender to attempt to serve papers abroad in order to start legal proceedings, and the borrower is assured that the UK Courts will accept that service has been duly given if a UK process agent is involved.
Is a process agent needed for arbitration?
One potential scenario meriting consideration for those looking at a process agent service, is the situation if a contract between the two parties contains an arbitration clause. Such a clause may set out that the arbitration award will be final and binding, with no option to appeal to a higher court.
If, then, a lender wishes to commence arbitration proceedings in light of a borrower having defaulted on their loan, the question is raised of how the borrower can be properly notified, and how the lender can ensure arbitration will result in an enforceable order.
In a situation like this, a process agent service can help eliminate any doubt as to whether the borrower is properly notified of arbitration proceedings. Including provision for this in the loan contract – including setting out which specific individual or organisation should be served documents – can help make service of proceedings a more straightforward process, with less ambiguity for the parties involved.
Hopefully, in the case of any given agreement between a UK and non-UK party, the need for arbitration will not arise – and with various other factors needing to be considered in the drafting of arbitration clauses, a process agent service might not always be essential. It could, however, help provide some security and peace of mind, so that the lender can be confident of holding a borrower to an agreement.
For answers to any of the further questions you may have about process agency services here at London Registrars, please don’t hesitate to reach out to our experts via phone or email. We will be pleased to help ensure you make the right decision on whether your particular requirements call for the use of a process agent service.