Act of Sederunt (Sheriff Court Bankruptcy Rules) 1996 Amendment 2004

Explanatory Note

(This Note does not form part of the Act of Sederunt)

This Act of Sederunt amends the Act of Sederunt (Sheriff Court Bankruptcy Rules) 1996 (“the Principal Rules”) in order to regulate the procedure in sequestration to take into account the Debt Arrangement Scheme (Scotland) Regulations 2004 (S.S.I. 2004/468) (as amended by the Debt Arrangement Scheme (Scotland) Amendment Regulations 2004 (S.S.I. 2004/470)) which come into force on 30th November 2004. In terms of section 4(3) of the Debt Arrangement and Attachment (Scotland) Act 2002, a creditor is not able to found on or concur in the founding on a debt covered by a debt payment programme as defined in section 2 of that Act. Neither may the creditor found on or concur in the founding on such a debt if he has been given notice in the prescribed form of the approval of a debt payment programme.

Article 3 of the Act of Sederunt inserts new Rules 17 and 18 into the Principal Rules to require respectively a petitioning creditor and a concurring creditor to check with the DAS Register before a petition is lodged that the relevant debt is not covered by section 4(5) of the Debt Arrangement and Attachment (Scotland) Act 2002 and hence not able to be founded on and to make a statement in prescribed Forms 19 or 20 to the effect that the position has been checked. In terms of Rule 17 a petitioning creditor must also check that the position is still the same immediately prior to the calling of the petition and lodge a statement in court to that effect. Articles 4, 5, 6 and 7 also amend the forms (Forms 1, 2, 3 and 4 in Appendix 1 to the Schedule to the Principal Rules) used in sequestration proceedings as they relate to a debtor petitioner with and without concurrence, and a creditor petitioner.

Articles 4, 5, 6 and 7 also amend the forms (Forms 1, 2, 3 and 4 in Appendix 1 to the Schedule to the Principal Rules) used in sequestration proceedings to require the debtor, petitioning or concurring creditor to declare the status the sequestration will have in terms of the EC Regulation on insolvency proceedings. That regulation provides for the reciprocal enforcement of insolvency decrees across the European Community. It is only relevant if the debtor is a trader. If his centre of main interests is not in the EC, then the Regulation does not apply. If it is in the EC, the regulation requires the main insolvency proceedings to be opened in the jurisdiction where he has his centre of main interests.