The Bank Recovery and Resolution (No. 2) Order 2014

PART 15 U.K. Applications to the court in relation to resolution action

Stay of legal proceedings U.K.

185.—(1) Where—

(a) the Bank has made a mandatory reduction instrument or exercised a stabilisation power in relation to any bank, building society, investment firm or banking group company (“institution under resolution”),

(b) the institution under resolution is a party to legal proceedings before any court in the United Kingdom, and

(c) the Bank reasonably considers that a stay of those proceedings is necessary for an effective application of the resolution tools or the stabilisation powers,

the Bank may apply to that court for a stay of the proceedings.

(2) In this article—

“bank” has the meaning given by section 2 of the Banking Act 2009 M1 ;

“banking group company” has the meaning given in section 81D of the Banking Act 2009 M2 ;

“building society” has the meaning given in section 119 of the Building Societies Act 1986;

“mandatory reduction instrument” has the meaning given in section 6B(1) of the Banking Act 2009 M3 ; and

“stabilisation powers” has the meaning given in section 1(4) of the Banking Act 2009 M4 .

Marginal Citations

M1 Section 2 was amended by the Financial Services Act 2012, sections 101(1) and (3) and 102(1) and (3) and Schedule 17, paragraph 3, and by S.I. 2011/2832.

M2 Section 81D was inserted by the Financial Services Act 2012, section 100(5); and was amended by the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraphs 1 and 7(3), and by S.I. 2014/3329.

M3 Section 6B was inserted by S.I. 2014/3329.

M4 Section 1(4) was substituted by the Financial Services (Banking Reform) Act 2013, Schedule 2, paragraphs 1 and 12(1) and (4); and was amended by S.I. 2014/3329.

Remedies on judicial review U.K.

186.—(1) Where an application is made for judicial review of a decision of the Bank to exercise the stabilisation powers in relation to an institution under resolution (“relevant proceedings”)—

(a) a ruling by the court that the decision is unlawful shall not affect—

(i) a relevant transfer,

(ii) special bail-in provision (within the meaning given by section 48B of the Banking Act 2009), or

(iii) provision under section 48L of that Act in relation to securities issued by the institution under resolution,

made by a stabilisation instrument made by the Bank pursuant to that decision; and

(b) the court may not quash any provision in a stabilisation instrument made by the Bank if that provision makes—

(i) a relevant transfer;

(ii) special bail-in provision; or

(iii) provision under section 48L of the Banking Act 2009 in relation to securities issued by the institution under resolution.

(2) For the purposes of paragraph (1)—

(a) “stabilisation instrument” means—

(i) a share transfer instrument,

(ii) a property transfer instrument,

(iii) a resolution instrument, or

(iv) a third-country instrument,

made by the Bank in the exercise of the stabilisation powers provided for in section 1(4) of the Banking Act 2009, and for these purposes “share transfer instrument”, “property transfer instrument”, “resolution instrument” and “third country instrument” have the meaning given in article 184;

(b) a transfer is a “relevant transfer” if it transfers to any person—

(i) property, rights or liabilities of the institution under resolution or of a relevant resolution company; or

(ii) securities issued by the institution under resolution or by a relevant resolution company;

(c) for the purposes of sub-paragraph (b)—

(i) “resolution company” has the meaning given by section 29A of the Banking Act 2009 M5 ; and

(ii) a resolution company is a relevant resolution company if property, rights or liabilities of the institution under resolution have been transferred to it.

(3) For the purposes of this article “institution under resolution” has the meaning given in article 185.

(4) Paragraph (1) does not affect the power of the court, subject to section 244 of the Banking Act 2009 M6 (immunity), to award damages as a remedy in relevant proceedings.

Marginal Citations

M5 Section 29A was inserted by S.I. 2014/3329.

M6 Section 244 was amended by the Financial Services Act 2012, Schedule 2, paragraph 3, and by S.I. 2014/3329.