Process Agent Appointment: Choice of Law in Multiple Jurisdictions

By: Colleen A. DeVries, COGENCY GLOBAL on Fri, Oct 04, 2019

Choice of Law in Multiple Jurisdictions_157167851There are many considerations when entering into a contract, more so for commercial financial transactions that can involve multiple parties from different countries, each with uniquely different bodies of law and precedent governing those commercial transactions.

While negotiations may be friendly at the start, it's important that the contract contain provisions to protect each party, including identifying which legal jurisdiction will be used if there is a dispute to settle later on.

Consider a large, commercial financing transaction. The borrower could be in Brazil and the syndicate of lenders could be banks located in New York and England. Which law is controlling, in the event of a dispute? All three jurisdictions have different laws, penalties and degrees of predictability on the outcome of enforceability of decisions. The same question applies to large, U.S.-based commercial transactions with parties in different states. International or domestic, it’s critical to set out in advance which law will govern a lawsuit for any wronged parties in the transaction.

Governing Law and Forum Selection Clauses

The choice of law jurisdiction is negotiated by the parties involved and can vary depending upon each party’s country (or U.S. state) of origin. For cross-border transactions, New York and the United Kingdom are common choices due to each jurisdiction’s recognized body of commercial law and established precedent in large financial transactions. The choice of either American or English law provides some degree of predictability, fairness, neutrality and justice for the resolution of any potential dispute.

In certain commercial real estate transactions (e.g. REITs or CMBS deals) domestic to the U.S., New York is a common choice for the governing law of the loan and related agreements, even if the property is located in another U.S. state. If the special purpose entity (SPE) purchasing the property is not registered or qualified to do business in New York, it can name a process agent in the loan agreement to fulfill the ‘minimum contacts’ requirement to ensure it can be served in New York.

Jurisdictional preference and consent to jurisdiction is usually memorialized in ‘governing law’ or ‘forum selection’ clauses. If the party to a contract is consenting to be subject to a jurisdiction where it does not have a physical presence (a Brazilian borrower consenting to New York law, for example) it’s common practice for the counterparty to require appointment of an agent located in that jurisdiction who will be able to effectively receive and forward service of process should a lawsuit arise out of that transaction. Almost any person can serve as a process agent for this purpose but most parties, especially within the context of large cross-border financial transactions that have a lot of moving parts, prefer to work with a professional process agent or contract agent.

Below is sampling of different types of transactions, parties and choice of law that we’ve encountered*:

Type of Transaction/Agreement

Jurisdiction Lender/Lessor/Party

Jurisdiction of Borrower/Lessee/

Choice of Law




Hong Kong


Based on the terms of the investment loan agreement, the lender was more comfortable having any dispute heard in an Australian court.

Real Estate


New York


Lender was more comfortable having any dispute heard in a Georgia court.

Aircraft Purchase (Tourism)




Lessor more comfortable having any dispute heard in an Indiana court.

Indemnification Agreement


New York


Directors and officers
are afforded indemnification protection under Delaware law.

Race Horse Purchase Agreement




Long term legal precedent supporting race horse industry in Kentucky provides comfort to lenders

Writers Guild


New York


Writer's Guild prefers any dispute to be governed by California law and heard in California courts.

Overseas Private Investment Corporation (OPIC) Loan Agreement

Washington, D.C.


Washington, D.C.

New York may be favorable for many financing deals, but for certain transactions, OPIC prefer D.C.

*Note: This is a sampling of various transactions we’ve worked on and is not legal advice. Choice of the governing law jurisdiction is dependent on a number of different factors and is unique to each deal.

If your cross-border or domestic U.S. transaction requires a process agent, it is important to select that process agent prior to the transaction’s closing, and include that choice as part of the closing checklist. A professional process agent should be knowledgeable about the various types of legal proceedings in multiple jurisdictions and understand the urgency of the steps that must be taken in the event that legal action should be taken as part of a transaction.

More info: Tips for choosing a professional process agent.


This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Process Agent