In today's global economy, attorneys and paralegals are seeing an increase in the number of multi‑jurisdictional, cross‑border transactions along with an increased number of detailed requirements for closing.
One requirement often overlooked until the last minute in these transactions is the process agent appointment – a key step in establishing the preferred choice of law for an international finance agreement.
Choice of Law for International Agreements
When engaging in the following types of cross-border transactions and agreements, commercial banks, sovereign states, multilateral lending agencies, export credit agencies and corporate entities will often negotiate a choice of law clause to specify which jurisdictional law is used to govern any disputes that may arise:
- Credit financing (including aviation leasing/financing).
- Debt/equity capital market offerings.
- Rule 144A, Regulation S offerings and private placements.
- Loan and credit agreements.
- ISDA master agreements.
- Import/export financing agreements.
- Indentures and stock purchase agreements.
- Intercreditor agreements.
The governing law chosen for the transaction can vary depending on the countries of origin for the parties involved, but New York and the U.K. are most commonly chosen due to their established bodies of commercial law and existing legal precedents for commercial agreements. Attorneys drafting international agreements may even select New York and U.K. law, even when the underlying transaction may have minimal contact with those jurisdictions.
Process Agent Appointment in Cross‑Border Transactions
If the parties to a transaction are not located in their preferred legal jurisdiction, process agent services may be required. While the general format of international agreements varies greatly from country to country, the provision requiring designation of process agent is often found in a section titled ‘Consent to Jurisdiction’, ‘Governing Law’ or similar variations.
Appointing a process agent is only one of many requirements on your closing checklist, but it requires advance planning and understanding the choice of law and venue that the parties agree will govern the transaction. Make sure you give yourself time to iron out these details so that you’ll have the official process agent appointment letter in hand for the closing.
Continue reading about the role of a process agent in cross-border transactions.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
