Governing Law - GMRA Provision
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2000 Global Master Repurchase Agreement
Paragraph 17 in a Nutshell™ Use at your own risk, campers!
Full text of Paragraph 17
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Summary
Process agent
A process agent, for an agreement subject to the jurisdiction the courts of England and Wales, is an agent located in England or Wales (or, in theory, their adjacent territorial waters) who accepts service of legal proceedings filed in those courts for someone who is not in England or Wales — technically, who has no permanent place of business here.
The rules of English civil court procedure[1] requires a claim (in the trade called “process”) brought before an English (or Welsh) court to be physically served on the defendant in England or Wales (or, at the limit, in their adjacent territorial waters).[2] Service in Scotland — or its territorial waters — will not do. This means you can serve process on someone rowing a boat in the Bristol Channel, but not in Inverness, much less on someone escaping in rowing a boat to, for example, the Isle of Skye.
This means if you have a contract with a counterparty who has no place of business in England or Wales (or their territorial waters), it will need to appoint a process agent on whom you can serve court papers should, heaven forfend, you need to.
Jurisdiction, not governing law
Point for details freaks: it is the jurisdiction of the courts and not the governing law law that matters. A contract governed by Swiss law but subject to the jurisdiction of the English courts[3] would still need an English or Welsh process agent. In theory — and, yes, a ripe theory it would be — a contract governed by English law but subject to the exclusive jurisdiction of Italian courts[4] would not.
This also means that an agreement subject to foreign law and the non-exclusive jurisdiction of foreign courts, and which therefore could, in theory, come before an English or Welsh court, would require a process agent in England, Wales, or their territorial waters for that to happen.
This would look odd in the negotiation process.
The JC offers a free bag of sweeties to the first person who can show they have successfully inserted the appointment of an English process agent into a foreign law agreement for this reason.[5]
The agent doesn’t have to agree, or do anything
Now here’s an interesting thing. Having contractually agreed your “method or place” for service, as long as the plaintiff can prove it complied with it — usually by having its process server swear an “affidavit of service” — the court will not then enquire whether the claim, duly served, ever found its way to the actual defendant.
The view is that the offshore defendant knowingly assumed the risk of its process agent being competent enough to forward the correspondence, in the same way a local defendant assumes the risk of its receptionist neglecting to pass a package actually delivered to its legal eagles.
So the painful strictures in process agent boilerplate dealing with replacement or succession of agents are not strictly necessary: if the contract provides it may be served “by delivering it to the first person you meet at the counter in the Gregg’s pastry shop in Waterloo station at 9am” — even, I like to think, by “impaling it on Boadicea’s sword on the Victoria Embankment in the presence of one or more tourists”, then that is what you must do, and no more.
This is, by the way, no more than an articulation of the basic rules of agency: the agent represents the principal: what one gives to a disclosed agent, one gives to the principal as far as one is concerned.
See also
References
- ↑ Rule 6.11 of Part 6, details freaks.
- ↑ In the Civil Procedure Rules the “jurisdiction” is defined as “unless the context requires otherwise, England and Wales and any part of the territorial waters of the United Kingdom adjoining England and Wales” so, therefore, those of the Her Majesty’s territorial waters which adjoin Scotland or Northern Ireland are out of bounds.
- ↑ This sounds ridiculous, I know, but it does happen. We have direct personal experience.
- ↑ This sounds ridiculous, I know, and is ridiculous. We have no personal direct experience of this, and do not want any, so you can save your postcards)
- ↑ Up to fifty new pence in value, postage and packing excepted. Judge’s decision final is arbitrary, crotchety, and no correspondence will be entered into unless he feels like it, which he probably will. Competition not open to friends, relations, acquaintances or corresondents of the JC.