Part II APPOINTMENTMENT AND REGULATION OF UNDERTAKERS

CHAPTER II ENFORCEMENT OF INSOLVENCY

Special administration orders

24 Special administration orders made on special petitions.

(1)

If, on an application made to the High Court by petition presented—

(a)

by the Secretary of State; or

(b)

with the consent of the Secretary of State, by the Director,

that Court is satisfied in relation to any company which holds an appointment under Chapter I of this Part that any one or more of the grounds specified in subsection (2) below is satisfied in relation to that company, that Court may make a special administration order in relation to that company.

F1(1A)

If on an application made to the High Court by petition presented—

(a)

by the Secretary of State (after consulting the Assembly); or

(b)

with the consent of the Secretary of State (after consulting the Assembly), the Authority,

the Court is satisfied in relation to any company which is a qualifying licensed water supplier that any one or more of the grounds specified in subsection (2) below is satisfied in relation to that company, that Court may make a special administration order in relation to that company.

(2)

The grounds mentioned in F2subsections (1) and (1A) above are, in relation to any company—

(a)

that there has been, is or is likely to be such a contravention by the company of any principal duty, not being a contravention in respect of which a notice has been served under subsection (3) of section 19 above, as is serious enough to make it inappropriate for the company to continue to hold its appointment F3or licence;

(b)

that there has been, is or is likely to be such a contravention by the company of the provisions of any enforcement order which—

(i)

is not for the time being the subject-matter of proceedings brought by virtue of section 21(1) above; and

(ii)

if it is a provisional enforcement order, has been confirmed,

as is serious enough to make it inappropriate for the company to continue to hold its appointment F3or licence;

F4(bb)

in the case of a company which is a qualifying licensed water supplier, that—

(i)

action taken by the company has caused a contravention by a water undertaker of any principal duty; and

(ii)

that action is serious enough to make it inappropriate for the company to continue to hold its licence;

(c)

that the company is or is likely to be unable to pay its debts;

(d)

that, in a case in which the Secretary of State has certified that it would be appropriate, but for section 25 below, for him to petition for the winding up of the company under F5section 440 of the Companies Act 1985 F5section 124A of the Insolvency Act 1986 (petition by the Secretary of State following inspectors’ report etc.), it would be just and equitable, as mentioned in that section, for the company to be wound up if it did not hold an appointment under Chapter I of this Part F6or was not a qualifying licensed water supplier ; or

(e)

F7in the case of a company holding an appointment under Chapter 1 of this Part, that the company is unable or unwilling adequately to participate in arrangements certified by the Secretary of State or the Director to be necessary by reason of, or in connection with, a proposal for the making by virtue of section 7(4)(c) above of any appointment or variation replacing a company as a relevant undertaker.

(3)

Notice of any petition under this section for a special administration order shall be given forthwith to such persons and in such manner as may be prescribed by rules made under section 411 of the M1Insolvency Act 1986 (“the 1986 Act”); and no such petition shall be withdrawn except with the leave of the High Court.

F8(4)

Subsections (4) and (5) of section 9 of the 1986 Act (powers on application for administration order) shall apply on the hearing of the petition for a special administration order in relation to any company as they apply on the hearing of a petition for an administration order.

F8(5)

Subsections (1), (2) and (4) of section 10 of the 1986 Act (effect of petition) shall apply in the case of a petition for a special administration order in relation to any company as if—

(a)

the reference in subsection (1) to an administration order were a reference to a special administration order;

(b)

paragraph (b) of that subsection did require the leave of the court for the taking of any of the steps mentioned in paragraphs (b) and (c) of subsection (2) (appointment of, and exercise of functions by, administrative receiver); and

(c)

the reference in paragraph (c) of subsection (1) to proceedings included a reference to any proceedings under or for the purposes of section 18 above.

(6)

For the purposes of this section a company is unable to pay its debts if—

(a)

it is a limited company which is deemed to be so unable under section 123 of the 1986 Act (definition of inability to pay debts); or

(b)

it is an unregistered company which is deemed, by virtue of any of sections 222 to 224 of that Act, to be so unable for the purposes of section 221 of that Act (winding up of unregistered companies).

F9(7)

In this section “principal duty” means—

(a)

in relation to a company holding an appointment under Chapter 1 of this Part, a requirement imposed on the company by section 37 or 94 below;

(b)

in relation to a company which is a qualifying licensed water supplier, any condition of its licence or any statutory requirement imposed on it in consequence of its licence.