Process-Agent for Companies: A Must-Have for International Contracts

Often, the contracting parties must negotiate a choice of law clause. The clause codifies under which law of the legal system of the respective country, the parties resolve disagreements in the contractual relationship (e.g. in the case of disputes). In the next step, both parties have agreed on a legal status, but are not physically present in this country. This is a typical case for a process agent as he acts as a kind of representative. He accepts court documents and other similar things on behalf of the contracting parties and then forwards those to them.

Mostly on anglophone countries, as a foreigner it is de facto necessary to appoint a process-agent to sign a contract with a local company.

Mostly a process-agent comes into action during transactions between two big banks, countries, multilateral leasing companies and export companies. Other areas include:

• Commercial real estate
• Borrowing arrangement
• cross-border export pre-financing,
• international derivatives trading,
• Debt/equity capital market offers or
• Selling securities abroad.

One advantage is the flexibility which result from the appoint of a process-agent. In this way it is not necessary to operate an expensive communication channel like a local branch. Moreover, process-agents are more experienced with the local law and are therefore indirectly securing the contract and are increasing the mutual trust between the contract parties.

In most cases, the appointment of a process agent is a condition precedent to completion. First, the parties exchange core information of the contract during the appointment (which includes e.g. the names of the contracting parties, date of completion, contact persons who are to receive the notifications). It could happen that the process agent already provides a model document for this.

It is recommendable to complete the appointment of the Process Agent prior to the conclusion of the contract to avoid delays.

Essential for the right choice of this critical position is a quick reaction from the process agent and, of course, someone who brings a lot of experience to the table and understands the seriousness. Professional process agents notify immediately if they receive court documents, and they keep accurate records of all deadlines and processes.

So far, this article has always talked about the English term: Process agent – why? A German translation would be „Prozessbevollmächtigter “. However, these are two separate roles.

A “Prozessbevollmächtigter” in Germany is more a plaintiff’s counsel than a process agent. It means he is eligible to represent his client in front of the court if he has the power of attorney. The same also applies to filing of lawsuits, production of evidence, and other procedural acts.

A process agent, on the other hand, cannot do this in general. Without a power of attorney, he cannot effectively represent the client in court. Also, in some courts, only (specialized) lawyers are allowed to function as legal representatives. In contrast every natural person is eligible as a process agent.

In summary, process agents are describable as a trustworthy messenger for the rapid forwarding of important legal documents to the recipient.

We at Ecovis Heidelberg can act as a process agent for you. Due to our extensive experience in international law, we receive the relevant documents from the courts, notaries, etc. in the event of legal uncertainties and forward them to you quickly. This means you stay informed and don’t have to worry about any surprises. In addition, our legal experts are on hand to advise you to ensure that your international transactions run smoothly and with legal certainty.