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PART VIIN.I.MISCELLANEOUS PROVISIONS APPLYING TO COMPANIES WHICH ARE INSOLVENT OR IN LIQUIDATION

Modifications etc. (not altering text)

Management by administrators, liquidators, etc.N.I.

Supplies of water, electricity, etc.N.I.

197 .F1—(1) This Article applies in the case of a company where—

[F2(a)the company enters administration, or]

(b)an administrative receiver is appointed, or

F3(ba). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)a voluntary arrangement[F4 approved under Part II], has taken effect, or

(d)the company goes into liquidation, or

(e)a provisional liquidator is appointed;

and “the office‐holder” means the administrator, the administrative receiver F5..., the supervisor of the voluntary arrangement, the liquidator or the provisional liquidator, as the case may be.

(2) If a request is made by or with the concurrence of the office‐holder for the giving, after the effective date, of any of the supplies mentioned in paragraph (3), the supplier—

(a)may make it a condition of the giving of the supply that the office‐holder personally guarantees the payment of any charges in respect of the supply, but

(b)shall not make it a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, that any outstanding charges in respect of a supply given to the company before the effective date are paid.

(3) The supplies referred to in paragraph (2) are—

(a)a supply of electricity by[F6 a public electricity supplier within the meaning of Part II of the Electricity (Northern Ireland) Order 1992],

[F7(aza)a supply of electricity by a class of person within Class A (small supply) or Class B (resale) of Schedule 3 to the Electricity (Class Exemptions from the Requirement for a Licence) Order (Northern Ireland) 2013 (S.R. 2013/93);]

[F8(aa)a supply of gas by the holder of a licence under Article 8 of the Gas (Northern Ireland) Order 1996;]

[F9(b)a supply of water or sewerage services by a water or sewerage undertaker;]

[F10(ba)a supply of water by a person who has an interest in the premises to which the supply is given;]

[F11(c)a supply of communications services by a provider of a public electronic communications service,]

[F12(d)a supply of communications services by a person who carries on a business which includes giving such supplies;

(e)a supply of goods or services mentioned in paragraph (3A) by a person who carries on a business which includes giving such supplies, where the supply is for the purpose of enabling or facilitating anything to be done by electronic means;]

[F11and in this paragraph “communications services” do not include electronic communications services to the extent that they are used to broadcast or transmit programme services (within the meaning of the Communications Act 2003).]

[F13(3A) The goods and services referred to in paragraph (3)(e) are—

(a)point of sale terminals;

(b)computer hardware and software;

(c)information, advice and technical assistance in connection with the use of information technology;

(d)data storage and processing;

(e)website hosting.]

(4) “The effective date” for the purposes of this Article is whichever is applicable of the following dates—

[F14(a)the date on which the company entered administration]

(b)the date on which the administrative receiver was appointed (or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed),

F15(ba). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)the date on which the voluntary arrangement[F4 took effect],

(d)the date on which the company went into liquidation,

(e)the date on which the provisional liquidator was appointed.

F1mod.by SR 1990/177; SR 1991/411

Modifications etc. (not altering text)

[F16Further protection of essential suppliesN.I.

197A—(1) An insolvency-related term of a contract for the supply of essential goods or services to a company ceases to have effect if—

(a)the company enters administration, or

(b)a voluntary arrangement approved under Part 2 takes effect in relation to the company.

(2) An insolvency-related term of a contract does not cease to have effect by virtue of paragraph (1) to the extent that—

(a)it provides for the contract or the supply to terminate, or any other thing to take place, because the company becomes subject to an insolvency procedure other than administration or a voluntary arrangement;

(b)it entitles a supplier to terminate the contract or the supply, or do any other thing, because the company becomes subject to an insolvency procedure other than administration or a voluntary arrangement; or

(c)it entitles a supplier to terminate the contract or the supply because of an event that occurs, or may occur, after the company enters administration or the voluntary arrangement takes effect.

(3) Where an insolvency-related term of a contract ceases to have effect under this Article the supplier may—

(a)terminate the contract, if the condition in paragraph (4) is met;

(b)terminate the supply, if the condition in paragraph (5) is met.

(4) The condition in this paragraph is that—

(a)the insolvency office-holder consents to the termination of the contract,

(b)the High Court grants permission for the termination of the contract, or

(c)any charges in respect of the supply that are incurred after the company entered administration or the voluntary arrangement took effect are not paid within the period of 28 days beginning with the day on which payment is due.

The High Court may grant permission under sub-paragraph (b) only if satisfied that the continuation of the contract would cause the supplier hardship.

(5) The condition in this paragraph is that—

(a)the supplier gives written notice to the insolvency office-holder that the supply will be terminated unless the office-holder personally guarantees the payment of any charges in respect of the continuation of the supply after the company entered administration or the voluntary arrangement took effect, and

(b)the insolvency office-holder does not give that guarantee within the period of 14 days beginning with the day the notice is received.

(6) For the purposes of securing that the interests of suppliers are protected, where—

(a)an insolvency-related term of a contract (the “original term”) ceases to have effect by virtue of paragraph (1), and

(b)the company subsequently enters administration, or a voluntary arrangement subsequently has effect in relation to it,

the contract is treated for the purposes of paragraphs (1) to (5) as if, immediately before the subsequent administration is entered into or the subsequent voluntary arrangement takes effect, it included an insolvency-related term identical to the original term.

(7) A contract for the supply of essential goods or services is a contract for a supply mentioned in Article 197(3).

(8) An insolvency-related term of a contract for the supply of essential goods or services to a company is a provision of the contract under which—

(a)the contract or the supply would terminate, or any other thing would take place, because the company enters administration or the voluntary arrangement takes effect,

(b)the supplier would be entitled to terminate the contract or the supply, or to do any other thing, because the company enters administration or the voluntary arrangement takes effect, or

(c)the supplier would be entitled to terminate the contract or the supply because of an event that occurred before the company enters administration or the voluntary arrangement takes effect.

(9) In this Article “insolvency office-holder” means—

(a)in a case where a company enters administration, the administrator;

(b)in a case where a voluntary arrangement under Part 2 takes effect in relation to a company, the supervisor of the voluntary arrangement.]

Modifications etc. (not altering text)

[F17Protection of supplies of goods and servicesN.I.

197B—(1) This Article applies where a company becomes subject to a relevant insolvency procedure.

(2) A company becomes subject to a relevant insolvency procedure for the purposes of this Article where—

(a)a moratorium under Part 1A comes into force for the company,

(b)the company enters administration,

(c)an administrative receiver of the company is appointed (otherwise than in succession to another administrative receiver),

(d)a voluntary arrangement approved under Part 2 takes effect in relation to the company,

(e)the company goes into liquidation,

(f)a provisional liquidator of the company is appointed (otherwise than in succession to another provisional liquidator), or

(g)a court order is made under section 901C(1) of the Companies Act 2006 in relation to the company (order summoning meeting relating to compromise or arrangement).

(3) A provision of a contract for the supply of goods or services to the company ceases to have effect when the company becomes subject to the relevant insolvency procedure if and to the extent that, under the provision—

(a)the contract or the supply would terminate, or any other thing would take place, because the company becomes subject to the relevant insolvency procedure, or

(b)the supplier would be entitled to terminate the contract or the supply, or to do any other thing, because the company becomes subject to the relevant insolvency procedure.

(4) Where—

(a)under a provision of a contract for the supply of goods or services to the company the supplier is entitled to terminate the contract or the supply because of an event occurring before the start of the insolvency period, and

(b)the entitlement arises before the start of that period,

the entitlement may not be exercised during that period.

(5) Where a provision of a contract ceases to have effect under paragraph (3) or an entitlement under a provision of a contract is not exercisable under paragraph (4), the supplier may terminate the contract if—

(a)in a case where the company has become subject to a relevant insolvency procedure as specified in paragraph (2)(b), (c), (e) or (f), the office-holder consents to the termination of the contract,

(b)in any other case, the company consents to the termination of the contract, or

(c)the High Court is satisfied that the continuation of the contract would cause the supplier hardship and grants permission for the termination of the contract.

(6) Where a provision of a contract ceases to have effect under paragraph (3) and the company becomes subject to a further relevant insolvency procedure, the supplier may terminate the contract in accordance with paragraph (5)(a) to (c).

(7) The supplier shall not make it a condition of any supply of goods and services after the time when the company becomes subject to the relevant insolvency procedure, or do anything which has the effect of making it a condition of such a supply, that any outstanding charges in respect of a supply made to the company before that time are paid.

(8) In this Article “the insolvency period”, in relation to a relevant insolvency procedure, means the period beginning when the company becomes subject to the relevant insolvency procedure and ending—

(a)in the case of a moratorium under Part 1A, when the moratorium comes to an end,

(b)in the case of the company entering administration, when the appointment of the administrator ceases to have effect under —

(i)paragraphs 77 to 85 of Schedule B1, or

(ii)an order under section 901F of the Companies Act 2006,

(c)in the case of the appointment of an administrative receiver of the company, when the receiver or any successor to the receiver ceases to hold office without a successor being appointed,

(d)in the case of a voluntary arrangement approved under Part 2 taking effect in relation to the company, when the arrangement ceases to have effect,

(e)in the case of the company going into liquidation, when the liquidator has—

(i)pursuant to Article 80(1), laid the account of the winding up before a general meeting of the company and given an explanation of it,

(ii)pursuant to Article 92(1), laid the account of the winding up before a general meeting of the company and a meeting of the creditors and given an explanation of it to each meeting, or

(iii)pursuant to Article 124(1), given the liquidator's report of the winding up to a general meeting of the company's creditors,

or when the appointment of the liquidator ceases to have effect under an order under section 901F of the Companies Act 2006,

(f)in the case of the appointment of a provisional liquidator for the company, when the provisional liquidator or any successor to the provisional liquidator ceases to hold office without a successor being appointed, and

(g)in the case of the making of a court order under section 901C(1) of the Companies Act 2006 in relation to the company, when—

(i)an order made by the High Court under section 901F of that Act takes effect, or

(ii)the High Court decides not to make such an order.

(9) In this Article “office-holder”, in relation to a company which has entered into an insolvency procedure as specified in paragraph (2)(b), (c), (e) or (f), means the administrator, administrative receiver, liquidator or provisional liquidator respectively.

(10) Schedule 2ZZA provides for exclusions from the operation of this Article.

Modifications etc. (not altering text)

C5Art. 197B excluded (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 19, 49(1) (with ss. 2(2), 5(2))

Powers to amend Article 197B and Schedule 2ZZAN.I.

197C—(1) Regulations may omit any of sub-paragraphs (a) to (g) of Article 197B(2) (relevant insolvency procedures).

(2) Regulations may amend Schedule 2ZZA so as to—

(a)remove or amend any exclusion from Article 197B for the time being specified there, or

(b)add further exclusions from Article 197B.

(3) In paragraph (2), references to exclusions from Article 197B are to circumstances in which Article 197B, or any provision of that Article, does not apply.

(4) The circumstances referred to in paragraph (3) may be framed by reference to kinds of company, supplier, contract, goods or services or in any other way.

(5) Regulations under this Article may make—

(a)consequential provision;

(b)transitional and supplementary provision.

(6) Regulations under this Article made by virtue of paragraph (5) may in particular make provision amending this Order or any other statutory provision whenever passed or made (including, if paragraph 1(1) or (2) of Schedule 2ZZA is omitted, provision omitting Article 197A or 197 respectively).

(7) Regulations may not be made under this Article unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly.]

Getting in the company's propertyN.I.

198.—(1) This Article applies in the case of a company where—

[F18(a)the company enters administration, or]

(b)an administrative receiver is appointed, or

(c)the company goes into liquidation, or

(d)a provisional liquidator is appointed;

and “the office‐holder” means the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.

(2) Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the High Court may require that person forthwith (or within such period as the Court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office‐holder.

(3) Where the office‐holder—

(a)seizes or disposes of any property which is not property of the company, and

(b)at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the High Court or otherwise) to seize or dispose of that property,

paragraph (4) has effect.

(4) In that case the office‐holder—

(a)is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office‐holder's own negligence, and

(b)has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.

Duty to co‐operate with office‐holderN.I.

199.—(1) This Article applies as does Article 198; and it also applies, in the case of a company in respect of which a winding‐up order has been made by the High Court, as if references to the office‐holder included the official receiver, whether or not he is the liquidator.

(2) Each of the persons mentioned in paragraph (3) shall—

(a)give to the office‐holder such information concerning the company and its promotion, formation, business, dealings, affairs or property as the office‐holder may at any time after the effective date reasonably require, and

(b)attend on the office‐holder at such times as the latter may reasonably require.

(3) The persons referred to in paragraph (2) are—

(a)those who are or have at any time been officers of the company,

(b)those who have taken part in the formation of the company at any time within one year before the effective date,

(c)those who are in the employment of the company, or have been in its employment (including employment under a contract for services) within that year, and are in the office‐holder's opinion capable of giving information which he requires,

(d)those who are, or have within that year been, officers of, or in the employment (including employment under a contract for services) of, another company which is, or within that year was, an officer of the company in question, and

(e)in the case of a company being wound up by the High Court, any person who has acted as administrator, administrative receiver or liquidator of the company.

(4) For the purposes of paragraphs (2) and (3), “the effective date” is whichever is applicable of the following dates—

[F19(a)the date on which the company entered administration,]

(b)the date on which the administrative receiver was appointed or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed,

(c)the date on which the provisional liquidator was appointed, and

(d)the date on which the company went into liquidation.

(5) If a person without reasonable excuse fails to comply with any obligation imposed by this Article, he shall be guilty of an offence and, for continued contravention, shall be guilty of a continuing offence.

Inquiry into company's dealings, etc.N.I.

200.—(1) This Article applies as does Article 198; and it also applies, in the case of a company in respect of which a winding‐up order has been made by the High Court, as if references to the office‐holder included the official receiver, whether or not he is the liquidator.

(2) The High Court may, on the application of the office‐holder, summon to appear before it—

(a)any officer of the company,

(b)any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or

(c)any person whom the Court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company.

(3) The High Court may require any such person as is mentioned in paragraph (2)(a) to (c) to submit an affidavit to the Court containing an account of his dealings with the company or to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned in sub‐paragraph (c) of that paragraph.

(4) The following applies in a case where—

(a)a person without reasonable excuse fails to appear before the High Court when he is summoned to do so under this Article, or

(b)there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding his appearance before the Court under this Article.

(5) The High Court may, for the purpose of bringing that person and anything in his possession before the Court, cause a warrant to be issued to a constable—

(a)for the arrest of that person, and

(b)for the seizure of any books, papers, records, money or goods in that person's possession.

(6) The High Court may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until that person is brought before the Court under the warrant or until such other time as the Court may order.

High Court's enforcement powers under Article 200N.I.

201.—(1) If it appears to the High Court, on consideration of any evidence obtained under Article 200 or this Article, that any person has in his possession any property of the company, the Court may, on the application of the office‐holder, order that person to deliver the whole or any part of the property to the office‐holder at such time, in such manner and on such terms as the Court thinks fit.

(2) If it appears to the High Court, on consideration of any evidence so obtained, that any person is indebted to the company, the Court may, on the application of the office‐holder, order that person to pay to the office‐holder, at such time and in such manner as the Court may direct, the whole or any part of the amount due, whether in full discharge of the debt or otherwise, as the Court thinks fit.

(3) The High Court may, if it thinks fit, order that any person liable to be summoned to appear before it under Article 200 or this Article shall be examined on oath, either orally or by interrogatories, concerning the company or the matters mentioned in Article 200(2)(c).