South America

1. International Contracts Governed by English Law

Many international business agreements, particularly in trade, finance, or investment, are governed by English law because of its widespread use in global commerce.

If a Brazilian company enters into a contract with an international bank, investor, or
supplier based in England, the counterparty may require that any legal notices be
served within England.

Appointing a process agent ensures there is an official representative in England to
receive these legal documents on behalf of the Brazilian company.

2. Compliance with English Courts and Arbitration

English courts and arbitration tribunals are common forums for resolving international disputes.

If a Brazilian company agrees to resolve legal matters under English jurisdiction, having a process agent in England guarantees compliance with procedural rules.

For example, if a dispute arises under a contract governed by English law, notices and legal documents can be served quickly and properly via the process agent.

3. International Loans and Financial Transactions

Global lenders and financial institutions often operate under English law for
international financing agreements.

South American companies securing loans, bonds, or derivatives contracts with international banks (e.g., based in London) are frequently required to appoint a process agent in England.

The process agent serves as a local point of contact for receiving legal notices, ensuring the Brazilian company meets all requirements for the financing arrangement.

4. Avoiding Delays in Legal Communications

Without a presence in England, Brazilian companies risk delays or missed communications when legal notices are issued.

By appointing a process agent in England, documents can be served promptly and efficiently, reducing the risk of default judgments or other costly issues.

5. Providing Assurance to Counterparties

Appointing a process agent demonstrates to international business partners, lenders, or investors that the Brazilian company is committed to fulfilling its legal and contractual obligations.

It reassures counterparties that all legal processes can proceed smoothly and without complications.

Example Scenario

Company A, based in Belo Horizonte, Brazil, is a mining company looking to attract international investment. A London-based private equity firm, Company B, agrees to invest in Company A in exchange for a minority equity stake.

1. Shareholder Agreement:

To formalize the relationship, Company A and Company B enter into a shareholder agreement.

The agreement outlines the rights and responsibilities of each shareholder, voting rights, dividend policies, and mechanisms for resolving disputes.

2. Governing Law and Jurisdiction:

The shareholder agreement specifies that it will be governed by English law and that disputes will be resolved in the courts of England and Wales.

Company B insists on English law because it is familiar, widely respected, and provides legal certainty for international investors.

3. The Need for a Process Agent:
Company A, as a Brazilian company with no physical presence in the UK, cannot easily accept legal notices in England if a dispute arises.

To address this, Company A appoints a process agent in England. The process agent acts as Company A’s representative for the purpose of receiving formal legal notices, including court proceedings, related to the shareholder agreement.

Why is a Process Agent Appointed?

The London-based investor (Company B) requires:
– Confidence that they can efficiently serve legal notices in the UK without dealing with the complexities of international legal service in Brazil.
– Assurance that Company A will comply with English legal processes as stipulated in the agreement.

By appointing a process agent, Company A demonstrates:
– Its commitment to adhering to the shareholder agreement.
– It understands the importance of providing a reliable and efficient means of handling potential disputes under English jurisdiction.

Conclusion

In this scenario, the Brazilian company appoints a process agent in England to comply with the shareholder agreement, facilitate legal processes under English law, and provide the UK- based investor with confidence in their legal protections and remedies.