A significant number of the appointments of London Registrars as a process agent in the UK are made by airlines for aircraft leases they take on. However, this is by no means the only circumstance in which aviation businesses may seek out this service.
What is a process agent in the UK as far as airlines are concerned?
It is, of course, important to remind ourselves at this point of the broader purposes that process agents serve for organisations including, as well as excluding, airlines.
A given process agent in the UK, when appointed by an organisation such as an airline, becomes a representative of that organisation whose function it is to accept legal documents and service of process on the entity’s behalf.
Where the given legal agreement is governed by English law, it is therefore conditional upon an airline lacking a registered address in England or Wales to comply with the counterparty’s demand for a UK process agent to be appointed.
This would ensure that in the event of the counterparty needing to take legal action against the airline (the appointor) at any point during the term of the contract, and with notice and service upon the process agent having been duly effected, there are no legal obstacles for court proceedings to be started in accordance with English court procedure rules.
3 situations in which the need for a UK process agent typically arises for airlines
With cross-border transactions often making the appointment of a process agent in the UK inevitable, here are some of the scenarios in which this is likely to be a contractual obligation for the airline in such an agreement:
- Aircraft leasing agreements
A classic example situation here would be an airline based outside of the UK – such as in Dubai – leasing an aircraft from a UK-based lessor, under a contract governed by English law.
However, it is worth pointing out at this stage that the counterparty, or the lessor, in this situation doesn’t necessarily need to be in the UK, in order for them to demand that a UK-based process agent is put in place. It could be that the lessor in this scenario is not based in either the UK or Dubai, but the contract between them is based on English jurisdiction, with any legal notices or court documents related to the lease to be served efficiently within the UK.
- Financing or loan agreements
Another common scenario is that of a non-UK airline looking to obtain financing from a lender based in the UK, such as a City of London bank.
If the airline ultimately commits to a syndicated loan governed by English law, the lender will invariably demand the appointment of a process agent in the UK.
In the world of aviation finance, loans may well involve multiple jurisdictions. This underscores the importance of having arrangements in place to simplify any legal proceedings that may need to take place at a later date, while minimising delays or costs.
- ISDA agreements (derivatives and hedging)
It is common for airlines to utilise International Swaps and Derivatives Association (ISDA) agreements as a means of hedging fuel costs and currency risks.
After all, jet fuel represents one of the major expenses faced by airlines, with prices that can fluctuate significantly. Airlines are vulnerable to ups and downs in currency exchange rates, too, as a consequence of their operations across multiple countries.
Unsurprisingly, then, this is another example of a situation in which a process agent in the UK may need to be appointed, so that if disputes or contractual enforcement issues occur later, the relevant legal processes can be quick and smooth.
To discover in greater detail the nature of London Registrars’ work as a process agent in the UK before you enquire to us directly, please feel free to download and peruse our brochure for our process agency services.