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Water Industry Act 1991

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Water Industry Act 1991, SCHEDULE 2 is up to date with all changes known to be in force on or before 23 November 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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Sections 10 and 23.

SCHEDULE 2U.K. Transitional Provision on Termination of Appointments

Cases where Schedule appliesU.K.

1(1)This Schedule shall apply in each of the cases specified in sub-paragraphs (2) [F1to (3A)] below.U.K.

(2)The first case in which this Schedule applies is where—

(a)the Secretary of State or [F2the Authority is proposing to make an appointment or variation replacing a company as a relevant undertaker; and

(b)by virtue of that appointment a company (“the new appointee”) will hold an appointment as the water undertaker or sewerage undertaker for an area which is or includes the whole or any part of the area for which, until the relevant date, another company (“the existing appointee”) holds an appointment as the water undertaker or, as the case may be, sewerage undertaker.

(3)The second case in which this Schedule applies is where—

(a)the High Court has made a special administration order in relation to any company [F3holding an appointment under Chapter 1 of this Part](“the existing appointee”); and

(b)it is proposed that on and after the relevant date another company (“the new appointee”) should, without any such appointment or variation as is mentioned in sub-paragraph (2) above having been made, hold an appointment as water undertaker or sewerage undertaker for an area which is or includes the whole or any part of the area for which until that date the existing appointee holds an appointment as water undertaker or, as the case may be, sewerage undertaker.

[F4(3A)The third case in which this Schedule applies is where—

(a)the High Court has made a special administration order in relation to any company which is [F5a qualifying water supply licensee or a qualifying sewerage licensee] (“the transferor”); and

(b)it is proposed that on and after the relevant date another company (“the transferee”) should [F6carry on—

(i)activities] relating to the introduction or introductions of water mentioned in section 23(6)(b) of this Act which were carried on by the transferor until that date[F7; or

(ii)activities relating to the removal or removals of matter mentioned in section 23(9) of this Act which were carried on by the transferor until that date (as the case may be).]]

(4)In this Schedule—

  • existing appointee” and “new appointee” shall be construed in accordance with sub-paragraph (2) or (3) above according to whether this Schedule is applying in the case mentioned in the first or second of those sub-paragraphs;

  • [F8new owner” means, where securities are transferred to a company as described in paragraph 2A(1)(b) or (2)(b), the company to which the transfer is made;]

  • other appointees” means any companies, other than the existing appointee and the new appointee, which are likely on or at a time after the relevant date to be holding appointments as water undertakers or sewerage undertakers for any area which is or includes any part of the area for which the existing appointee has at any time held an appointment as water undertaker or sewerage undertaker;

  • [F9other relevant companies” means any companies, other than the transferor and the transferee, which are likely on or at a time after the relevant date [F10to be—

(a)holding] appointments as water undertakers for any area in which, or in part of which, the activities relating to the introduction or introductions of water mentioned in section 23(6)(b) of this Act will be carried on by the transferee; [F11or

(b)holding appointments as sewerage undertakers for any area in which, or in part of which, the activities relating to the removal or removals of matter mentioned in section 23(9) of this Act will be carried on by the transferee (as the case may be);]]

  • the relevant date” means—

(a)where this Schedule applies by virtue of sub-paragraph (2) above, the coming into force of the appointment or variation mentioned in paragraph (a) of that sub-paragraph; and

(b)where this Schedule applies by virtue of sub-paragraph (3) [F12or (3A)] above, such day, being a day before the discharge of the special administration order takes effect, as the High Court may appoint for the purposes of this Schedule; and

  • special administrator”, in relation to a company in relation to which a special administration order has been made, means the person for the time being holding office for the purposes of section 23(1) of this Act;

  • [F13transferor” and “transferee” shall be construed in accordance with sub-paragraph (3A) above.]

Textual Amendments

F1Words in Sch. 2 para. 1 substituted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 51(2); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

F2Words in Act substituted (1.4.2006) by virtue of Water Act 2003 (c. 37), ss. 36(2), 105(3); S.I. 2005/2714, art. 4(c)

F3Words in Sch. 2 para. 1(3)(a) inserted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 51(3); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

F5Words in Sch. 2 para. 1(3A)(a) substituted (1.4.2016) by Water Act 2014 (c. 21), s. 94(3), Sch. 7 para. 122(2)(a); S.I. 2016/465, art. 2(m), Sch. 1 para. 1(bb) (with Sch. 2) (as amended (22.3.2017) by S.I. 2017/462, art. 16)

F6Words in Sch. 2 para. 1(3A)(b) substituted (1.4.2016) by Water Act 2014 (c. 21), s. 94(3), Sch. 7 para. 122(2)(b); S.I. 2016/465, art. 2(m), Sch. 1 para. 1(bb) (with Sch. 2) (as amended (22.3.2017) by S.I. 2017/462, art. 16)

F7Sch. 2 para. 1(3A)(b)(ii) and word inserted (1.4.2016) by Water Act 2014 (c. 21), s. 94(3), Sch. 7 para. 122(2)(c); S.I. 2016/465, art. 2(m), Sch. 1 para. 1(bb) (with Sch. 2) (as amended (22.3.2017) by S.I. 2017/462, art. 16)

F9Sch. 2 para. 1(4): definition of "other relevant companies" inserted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 51(5)(b); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

F10Words in Sch. 2 para. 1(4) substituted (1.4.2016) by Water Act 2014 (c. 21), s. 94(3), Sch. 7 para. 122(2)(d); S.I. 2016/465, art. 2(m), Sch. 1 para. 1(bb) (with Sch. 2) (as amended (22.3.2017) by S.I. 2017/462, art. 16)

F11Words in Sch. 2 para. 1(4) inserted (1.4.2016) by Water Act 2014 (c. 21), s. 94(3), Sch. 7 para. 122(2)(e); S.I. 2016/465, art. 2(m), Sch. 1 para. 1(bb) (with Sch. 2) (as amended (22.3.2017) by S.I. 2017/462, art. 16)

F12Sch. 2 para. 1(4): words in definition of "the relevant date" inserted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 51(5)(a); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

F13Sch. 2 para. 1(4): definition of "transferor" inserted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 51(5)(b); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

Modifications etc. (not altering text)

Making and modification of transfer schemesU.K.

2(1)The existing appointee, acting with the consent of the new appointee [F14and, in relation to the matters affecting them, of any other appointees], may make a scheme under this Schedule for the transfer of property, rights and liabilities from the existing appointee to the new appointee.U.K.

(2)A scheme under this Schedule shall not take effect unless it is approved by the Secretary of State or [F2the Authority].

(3)Where a scheme under this Schedule is submitted to the Secretary of State or the Authority] for his approval, he may, with the consent of the new appointee [F15and the existing appointee] modify the scheme before approving it.

(4)If at any time after a scheme under this Schedule has come into force in relation to the property, rights and liabilities of any company the Secretary of State considers it appropriate to do so and the existing appointee [F16and the new appointee] consent to the making of the order, the Secretary of State may by order provide that that scheme shall for all purposes be deemed to have come into force with such modifications as may be specified in the order.

(5)An order under sub-paragraph (4) above may make, with effect from the coming into force of the scheme to which it relates, any such provision as could have been made by the scheme and, in connection with giving effect to that provision from that time, may contain such supplemental, consequential and transitional provision as the Secretary of State considers appropriate.

(6)In determining, in accordance with his duties under Part I of this Act, whether and in what manner to exercise any power conferred on him by this paragraph the Secretary of State or [F2the Authority] shall have regard to the need to ensure that any provision for the transfer of property, rights and liabilities in accordance with a scheme under this Schedule allocates property, rights and liabilities to the different companies affected by the scheme in such proportions as appear to him to be appropriate in the context of the different functions which will, by virtue of this Act, be carried out at different times on and after the relevant date by the new appointee, by the existing appointee and by any other appointees.

(7)It shall be the duty of the new appointee, of the existing appointee and of any other appointees to provide the Secretary of State or [F2the Authority] with all such information and other assistance as he may reasonably require for the purposes of, or in connection with, the exercise of any power conferred on him by this paragraph.

[F17(7ZA)In a case where—

(a)another scheme under this Schedule provides for the transfer of the property, rights and liabilities of the existing appointee, and

(b)that other scheme makes provision for a transfer that is effected as described in paragraph 2A (hive down),

the duty in sub-paragraph (7) also applies to the new owner in relation to that other scheme.]

[F18(7A)In a case specified in paragraph 1(3A) above—

(a)the preceding provisions of this paragraph shall have effect as if—

(i)any reference to the existing appointee were a reference to the transferor;

(ii)any reference to the new appointee were a reference to the transferee; and

(iii)any reference to other appointees were a reference to other relevant companies; and

(b)sub-paragraph (6) above shall have effect as if the reference to functions were, in relation to a company which is a [F19water supply licensee or sewerage licensee], a reference to activities authorised by its licence and any statutory functions imposed on it in consequence of its licence.]

(8)A company which without reasonable excuse fails to do anything required of it by virtue of sub-paragraph (7) above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale.

(9)Without prejudice to the other provisions of this Act relating to the special administrator of a company, anything which is required by this paragraph to be done by a company shall, where that company is a company in relation to which a special administration order is in force, be effective only if it is done on the company’s behalf by its special administrator.

Textual Amendments

F2Words in Act substituted (1.4.2006) by virtue of Water Act 2003 (c. 37), ss. 36(2), 105(3); S.I. 2005/2714, art. 4(c)

F14Words in Sch. 2 para. 2(1) omitted (E.W.) (1.4.2011) by virtue of Flood and Water Management Act 2010 (c. 29), s. 49(3), Sch. 5 para. 1(2) (with s. 49(1)(6)); S.I. 2011/694, art. 3(j) (with art. 5(3))

F15Words in Sch. 2 para. 2(3) substituted (E.W.) (1.4.2011) by Flood and Water Management Act 2010 (c. 29), s. 49(3), Sch. 5 para. 1(3) (with s. 49(1)(6)); S.I. 2011/694, art. 3(j) (with art. 5(3))

F16Words in Sch. 2 para. 2(4) substituted (E.W.) (1.4.2011) by Flood and Water Management Act 2010 (c. 29), s. 49(3), Sch. 5 para. 1(4) (with s. 49(1)(6)); S.I. 2011/694, art. 3(j) (with art. 5(3))

F19Words in Sch. 2 para. 2(7A)(b) substituted (1.4.2016) by Water Act 2014 (c. 21), s. 94(3), Sch. 7 para. 122(3); S.I. 2016/465, art. 2(m), Sch. 1 para. 1(bb) (with Sch. 2) (as amended (22.3.2017) by S.I. 2017/462, art. 16)

Modifications etc. (not altering text)

[F20Transfer schemes providing for transfer by hive downU.K.

Textual Amendments

2A.(1)In a case specified in paragraph 1(3) (special administration order in relation to existing appointee), a scheme under this Schedule may provide for a transfer under section 23(2) that is effected by—U.K.

(a)the transfer of property, rights and liabilities from the existing appointee to a new appointee that is a wholly-owned subsidiary of the existing appointee, and

(b)the subsequent transfer of securities in the new appointee to another company.

(2)In a case specified in paragraph 1(3A) (special administration order in relation to a qualifying licensee) where the transferor is a qualifying water supply licensee, a scheme under this Schedule may provide for a transfer under section 23(2A) that is effected by—

(a)the transfer of property, rights and liabilities from the transferor to a transferee that is a wholly-owned subsidiary of the transferor, and

(b)the subsequent transfer of securities in the transferee to another company.

(3)In a case where a transfer is effected or proposed to be effected as described in sub-paragraph (1) or (2), paragraph 2 has effect as if—

(a)in sub-paragraphs (1) and (3) of paragraph 2, the references to the consent of the new appointee were references to the consent of the new owner;

(b)in sub-paragraph (4), the persons whose consent is required included the new owner;

(c)in sub-paragraph (7), the persons subject to the duty imposed by that sub-paragraph included the new owner.]

Transfers by schemeU.K.

3(1)A scheme under this Schedule for the transfer of the existing appointee’s property, rights and liabilities shall come into force on the relevant date and, on coming into force, shall have effect, in accordance with its provisions and without further assurance, so as to transfer the property, rights and liabilities to which the scheme relates to the new appointee.U.K.

[F21(1A)Where a scheme under this Schedule provides for a transfer of securities as described in paragraph 2A(1)(b) or (2)(b), that transfer has effect in accordance with the provisions of the scheme and without further assurance, immediately after the transfer of property, rights and liabilities mentioned in paragraph 2A(1)(a) or (2)(a).]

(2)For the purpose of making any division of property, rights or liabilities which it is considered appropriate to make in connection with the transfer of property, rights and liabilities in accordance with a scheme under this Schedule, the provisions of that scheme may—

(a)create for the existing appointee, the new appointee or any other appointees an interest in or right over any property to which the scheme relates;

(b)create new rights and liabilities as between any two or more of those companies [F22(but may not impose new liabilities on any other appointee);] and

(c)in connection with any provision made by virtue of paragraph (a) or (b) above, make incidental provision as to the interests, rights and liabilities of other persons with respect to the subject-matter of the scheme.

(3)A scheme under this Schedule may contain provision for the consideration to be provided by the new appointee and by any other appointees in respect of the transfer or creation of property, rights and liabilities by means of the scheme; and any such provision shall be enforceable in the same way as if the property, rights and liabilities had been created or transferred, and (if the case so requires) had been capable of being created or transferred, by agreement between the parties.

[F23(3A)Where a scheme under this Schedule provides for a transfer of securities as described in paragraph 2A(1)(b) or (2)(b), the scheme may contain provision for the consideration to be provided by the new owner in respect of the transfer; and any such provision is enforceable in the same way as if the securities had been transferred, and (if the case so requires) had been capable of being transferred, by agreement between the parties.]

(4)The property, rights and liabilities of the existing appointee that shall be capable of being transferred in accordance with a scheme under this Schedule shall include—

(a)property, rights and liabilities that would not otherwise be capable of being transferred or assigned by the existing appointee;

(b)such property, rights and liabilities to which the existing appointee may become entitled or subject after the making of the scheme and before the relevant date as may be described in the scheme;

(c)property situated anywhere in the United Kingdom or elsewhere;

(d)rights and liabilities under enactments;

(e)rights and liabilities under the law of any part of the United Kingdom or of any country or territory outside the United Kingdom.

(5)The provision that may be made by virtue of sub-paragraph (2)(b) above includes—

(a)provision for treating any person who is entitled by virtue of a scheme under this Schedule to possession of a document as having given another person an acknowledgement in writing of the right of that other person to the production of the document and to delivery of copies thereof; and

(b)provision applying section 64 of the M1Law of Property Act 1925 (production and safe custody of documents) in relation to any case in relation to which provision falling within paragraph (a) above has effect.

(6)For the avoidance of doubt, it is hereby declared that the transfers authorised by paragraph (a) of sub-paragraph (4) above include transfers which, by virtue of that paragraph, are to take effect as if there were no such contravention, liability or interference with any interest or right as there would be, in the case of a transfer or assignment otherwise than in accordance with a scheme under this Schedule, by reason of any provision having effect (whether under any enactment or agreement or otherwise) in relation to the terms on which the existing appointee is entitled or subject to the property, right or liability in question.

[F24(7)In a case specified in paragraph 1(3A) above the preceding provisions of this paragraph shall have effect as if—

(a)any reference to the existing appointee were a reference to the transferor;

(b)any reference to the new appointee were a reference to the transferee; and

(c)any reference to other appointees were a reference to other relevant companies.]

Transfer of appointmentU.K.

4(1)Where a scheme under this Schedule is made in the case specified in paragraph 1(3) above, the scheme may provide for the transfer to the new appointee, with such modifications as may be specified in the scheme, of the appointment under Chapter I of Part II of this Act which is held by the existing appointee.U.K.

(2)In such a case different schemes under this Schedule may provide for the transfer of such an appointment to different companies as respects different parts of the area to which the appointment relates.

[F25Exclusion of transfer of licenceU.K.

Textual Amendments

4AU.K.Where a scheme under this Schedule is made in the case specified in paragraph 1(3A) above, the scheme may not provide for the transfer to the transferee of the licence under Chapter 1A of Part 2 of this Act which is held by the transferor.]

Supplemental provisions of schemesU.K.

5(1)A scheme under this Schedule may contain supplemental, consequential and transitional provision for the purposes of, or in connection with, the provision for the transfers or any other provision made by the scheme.U.K.

(2)Without prejudice to the generality of sub-paragraph (1) above, a scheme under this Schedule may provide—

(a)that for purposes connected with any transfers made in accordance with the scheme (including the transfer of rights and liabilities under an enactment) the new appointee is to be treated as the same person in law as the existing appointee;

(b)that, so far as may be necessary for the purposes of or in connection with any such transfers, agreements made, transactions effected and other things done by or in relation to the existing appointee are to be treated as made, effected or done by or in relation to the new appointee;

(c)that, so far as may be necessary for the purposes of or in connection with any such transfers, references in any agreement (whether or not in writing) or in any deed, bond, instrument or other document to, or to any officer of, the existing appointee are to have effect with such modifications as are specified in the scheme;

(d)that proceedings commenced by or against the existing appointee are to be continued by or against the new appointee;

(e)that the effect of any transfer under the scheme in relation to contracts of employment with the existing appointee is not to be to terminate any of those contracts but is to be that periods of employment with the existing appointee are to count for all purposes as periods of employment with the new appointee;

(f)that disputes as to the effect of the scheme between [F26

(i)the existing appointee and the new appointee or new owner,

(ii)a person referred to in sub-paragraph (i) and any other appointee or new owner of any other appointee, or

(iii)different companies which are other appointees or new owners of other appointees,]

are to be referred to such arbitration as may be specified in or determined under the scheme;

(g)that determinations on such arbitrations and certificates given jointly by two or more such [F27persons] as are mentioned in paragraph (f) above as to the effect of the scheme as between the companies giving the certificates are to be conclusive for all purposes.

[F28(3)In a case specified in paragraph 1(3A) above—

(a)sub-paragraph (2) above shall have effect as if—

(i)any reference to the existing appointee were a reference to the transferor;

(ii)any reference to the new appointee were a reference to the transferee; and

(iii)any reference to any other appointee or appointees were a reference to any other relevant company or companies; and

(b)paragraph (g) of that sub-paragraph shall have effect as if the reference to two or more such [F29persons] as are mentioned in paragraph (f) of that sub-paragraph were a reference to two or more such persons as are mentioned in that paragraph (as it has effect by virtue of paragraph (a) above).]

Duties of existing appointee after the scheme comes into forceU.K.

6(1)A scheme under this Schedule may provide for the imposition of duties on the existing appointee and on the new appointee to take all such steps as may be requisite to secure that the vesting in the new appointee, by virtue of the scheme, of any foreign property, right or liability is effective under the relevant foreign law.U.K.

(2)The provisions of a scheme under this Schedule may require the existing appointee to comply with any directions of the new appointee in performing any duty imposed on the existing appointee by virtue of a provision included in the scheme under sub-paragraph (1) above.

(3)A scheme under this Schedule may provide that, until the vesting of any foreign property, right or liability of the existing appointee in the new appointee is effective under the relevant foreign law, it shall be the duty of the existing appointee to hold that property or right for the benefit of, or to discharge that liability on behalf of, the new appointee.

(4)Nothing in any provision included by virtue of this paragraph in a scheme under this Schedule shall be taken as prejudicing the effect under the law of any part of the United Kingdom of the vesting by virtue of the scheme in the new appointee of any foreign property, right or liability.

(5)A scheme under this Schedule may provide that, in specified cases, foreign property, rights or liabilities that are acquired or incurred by an existing appointee after the scheme comes into force are immediately to become property, rights or liabilities of the new appointee; and such a scheme may make the same provision in relation to any such property, rights or liabilities as can be made, by virtue of the preceding provisions of this paragraph, in relation to foreign property, rights and liabilities vested in the existing appointee when the scheme comes into force.

(6)References in this paragraph to any foreign property, right or liability are references to any property, right or liability as respects which any issue arising in any proceedings would have to be determined (in accordance with the rules of private international law) by reference to the law of a country or territory outside the United Kingdom.

(7)Any expenses incurred by an existing appointee in consequence of any provision included by virtue of this paragraph in a scheme under this Schedule shall be met by the new appointee.

(8)Duties imposed on a company by virtue of this paragraph shall be enforceable in the same way as if they were imposed by a contract between the existing appointee and the new appointee.

[F30(9)In a case specified in paragraph 1(3A) above, the preceding provisions of this paragraph shall have effect as if—

(a)any reference to the existing appointee were a reference to the transferor; and

(b)any reference to the new appointee were a reference to the transferee.]

Further transitional provision and local statutory provisionsU.K.

7(1)The Secretary of State may, if he thinks it appropriate to do so for the purposes of, or in connection with, any appointment or variation replacing a company as a relevant undertaker or any scheme under this Schedule, by order made by statutory instrument—U.K.

(a)make any provision which corresponds, in relation to any enactment referred to at the passing of the M2Water Act 1989 in Schedule 26 to that Act, to any provision originally made by that Schedule or makes similar provision in relation to any other enactment; or

(b)amend or repeal any local statutory provision.

(2)An order under this paragraph may—

(a)make provision applying generally in relation to local statutory provisions of a description specified in the order;

(b)make different provision for different cases, including different provision in relation to different persons, circumstances or localities; and

(c)contain such supplemental, consequential and transitional provision as the Secretary of State considers appropriate.

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