This content is from: Local Insights

Italy

Italian entities acting as borrowers or issuers of financial instruments in international financial transactions with foreign EU counterparties often accept to submit any controversy that may arise to the jurisdiction of a foreign court located in an EU member state.

Standard practice is to appoint a process agent in the relevant EU member state. Thus the service of process on Italian counterparties may be validly served on the process agent.

However appointing a process agent costs money and requires some negotiation over the letter of appointment. Occasionally, process agents require letters of appointment which minimize any material liability associated with their services.

Rarely do parties to transactions with EU counterparties consider the opportunities offered by Council Regulation (EC) No 44/2001 of December 22 2000, on jurisdiction and recognition and enforcement of judgments in civil and commercial matters.

This Council Regulation allows direct service of process of foreign deeds or documents (for those EU countries that opted for it) directly in another EU country. This consists of filing the deeds and documents to be served with the competent service of process agent of the receiver country, which will proceed with the requested service of process pursuant to local laws.

Such direct service of process procedure is permitted in Italy for deeds and documents to be served by entities resident in England and Wales and may quickly be made by sending to Italy the deeds or documents to be served and filing them with the competent Italian service of process agent.

Only basic legal assistance is needed to arrange the service of process. To the extent that only extra judicial deeds or documents are concerned, no specific authorization from Italian authorities is required. This procedure has great advantages as a means of avoiding confusion between the relevant process agent and the party appointing it, and guaranteeing the plaintiff proper and timely service on its counterparty.

The practice of always appointing a process agent in EU financial transactions should be reassessed, at least when Italian and other EU entities are involved.

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