The High Court of England and Wales holds that proceedings were properly served on process agent appointed by lender pursuant to relevant clauses of the underlying credit agreement


In a recent decision of Banco San Juan Internacional Inc v Petroleos De Venezuela Sa [2020] EWHC 2145 (Comm) the High Court (Foxton J) considered clauses included on lenders’ agreements with regards to service on process agents.

One of the issues in question was whether the main proceedings have properly been served by the claimants, a UK bank, upon the defendants, a Venezuela state-owned oil company.

The claimants relied on CPR r. 6.11 and alleged that this is a case in which the contracts between the parties contain a term providing for the method of service, namely on a process agent.

A third party had been appointed as a process agent for service purposes, as per the relevant clause of the agreement, however that appointment had expired, and the defendants failed to appoint a replacement process agent in time. Accordingly, the claimants, appointed a fourth party as process agent, as per the relevant clause of the agreement, where service of the main proceedings was in due course effected.

The defendants alleged that the appointment of the process agent by the claimants, cannot be appointment of the defendants’ “authorised” agent for service, which is what the clause requires. The court took the view however that the word “authorised” must mean authorised under the terms of the contracts in question. If those contracts permit the claimants to appoint a process agents for the defendants, then by definition an agent so appointed is an authorised agent of the defendants. Any contrary argument would render the right on the part of the lender to appoint a replacement agent entirely nugatory and purposeless.

The defendants further alleged that it was “unfair” for them to be encumbered with an agent not of their chosing. The court held however that “if the defendant did not want to be at risk of an agent being appointed who it does not like on terms of appointment that it did not like, all it need to do is comply with its contractual obligation to appoint an agent in the first place.”

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