HL Deb 09 November 1989 vol 512 cc1058-60

213 Clause 129, page 135, line 36 at end insert —' '(1A) So far as those provisions relate to insolvency proceedings in respect of a person other than a defaulter, they apply in relation to—

  1. (a) proceedings in respect of a member or designated non-member of a recognised investment exchange or a member of a recognised clearing house, and
  2. (b) proceedings in respect of a party to a market contract begun after a recognised investment exchange or recognised clearing house has taken action under its default rules in relation to a person party to the contract as principal,
but not in relation to any other insolvency proceedings, notwithstanding that rights or liabilities arising from market contracts fall to be dealt with in the proceedings.

(1B) The reference in subsection (1A)(b) to the beginning of insolvency proceedings is to —

  1. (a) the presentation of a bankruptcy petition for sequestration of a person's estate, or
  2. (b) the presentation of a petition for an administration order or a winding-up petition or the passing of a resolution for voluntary winding-up, or
  3. (c) the appointment of an administrative receiver.'.

214 Clause 130, page 136, line 12, leave out from '1986' to 'shall' in line 13 and insert 'or the Bankruptcy (Scotland) Act 1985'.

215 Page 136, leave out lines 20 to 22 and insert — 'This does not prevent a relevant office-holder from afterwards seeking to recover any amount under section 134(4) or 135(3) or prevent the court from afterwards making any such order or decree as is mentioned in section 136(1) or (2) (but subject to subsections (3) and (4) of that section).'.

216 Clause 132, page 137, line 36, after 'defaulter', insert 'or, in Scotland, a permanent trustee on the sequestrated estate of the defaulter'.

217 Page 137, line 45, leave out 'or have been pending' and insert 'pending or could be taken', or have been or could have been taken.'.

218 Page 138 line 1, after '130', insert, '185'.

219 Page 138, line 3, leave out 'the Bankruptcy (Scotland) Act 1985' and insert 'any rule of law in Scotland to the like effect as the said section 285, in the Bankruptcy (Scotland) Act 1985 or in the Debtors (Scotland) Act 1987 as to the effect of sequestration,'.

220 Clause 134, page 138, line 31, leave out from 'upon' to 'to' and insert 'proceedings under its default rules duly completed in accordance with this Part,'.

221 Page 138, line 44, leave out '129' and insert '247'.

222 Page 139, line 4, leave out 'compensation or'.

223 Page 139, line 8, after 'winding up', insert '(within the meaning of section 129 of the Insolvency Act 1986)'.

224 Page 139, line 9, leave out subsection (4) and insert — '(4) However, where (or to the extent that) a sum is taken into account by virtue of subsection (2)(b) or (3)(b) which arises from a contract entered into at a time when the creditor had notice —

  1. (a) that a bankruptcy petition or, in Scotland, a petition for sequestration was pending, or
  2. (b) that a meeting of creditors has been summoned under section 98 of the Insolvency Act 1986 or that a winding-up petition was pending.
the value of any profit to him arising from the sum being so taken into account (or being so taken into account to that extent) is recoverable from him by the relevant office-holder unless the court directs otherwise.

(4A) Subsection (4) does not apply in relation to a sum arising from a contract effected under the default rules or a recognised investment exchange or recognised clearing house.'.

225 Page 139, line 24, after 'preferential', insert 'or, in Scotland, preferred'.

226 Clause 135, page 139, line 33, leave out 'and 315' and insert 315 and 345'.

227 Page 139, line 34, at end insert — '(1A) In Scotland, a permanent trustee on the sequestrated estate of a defaulter or a liquidator is bound by any market contract to which that defaulter is a party and by any contract as is mentioned in subsection (1)(b) above notwithstanding section 42 of the Bankruptcy (Scotland) Act 1985 or any rule of law to the like effect applying in liquidations.'.

228 Page 139, line 37, after 'petition)' insert 'and section 32(8) of the Bankruptcy (Scotland) Act 1985 (effect of dealing with debtor relating to estate vested in permanent trustee),'.

229 Page 140, line 1, leave out subsection (3) and insert — '(3) However, where —

  1. (a) a market contract is entered into by a person who has notice that a petition has been presented for the winding up or bankruptcy or sequestration of the estate of the other party to the contract, or
  2. (b) margin in relation to a market contract is accepted by a person who has notice that such a petition has been presented in relation to the person by whom or on whose behalf the margin is provided,
the value of any profit to him arising from the contract or, as the case may be, the amount or value of the margin is recoverable from him by the relevant office-holder unless the court directs otherwise. (3A) Subsection (3)(a) does not apply where the person entering into the contract is a recognised investment exchange or recognised clearing house acting in accordance with its rules, or where the contract is effected under the default rules of such an exchange or clearing house; but subsection (3)(b) applies in relation to the provision of margin in relation to such a contract.'.

230 Page 140, line 8, after 'preferential', insert 'or, in Scotland, preferred'.

231 Clause 136, page 140, line 9, leave out 'market contract' and insert transaction to which this section applies'.

232 Page 140, leave out lines 15 to 18.

233 Page 140, line 19, leave out 'a market contract' and insert `any such transaction'.

234 Page 140, line 24, at end, insert 'on grounds of gratuitous alienations or fraudulent preferences'.

235 Page 140, leave out lines 25 to 27.

236 Page 140, line 28, leave out subsection (3) and insert— '(3) This section applies to —

  1. (a) a market contract to which a recognised investment exchange or recognised clearing house is a party or which is entered into under its default rules, and
  2. (b) a disposition of property in pursuance of such a market contract.

(4) Where margin is provided in relation to a market contract and (by virtue of subsection (3)(a) or otherwise) no such order or decree as is mentioned in subsection (1) or (2) has been, or could be, made in relation to that contract, this section applies to—

  1. (a) the provision of the margin,
  2. (b) any contract effected by the exchange or clearing house in question for the purpose of realising the property provided as margin, and
  3. (c) any disposition of property in accordance with the rules of the exchange or clearing house as to the application of property provided as margin.'.

Lord Fraser of Carmyllie

My Lords, I beg to move

that the House do agree with the Commons in their Amendments Nos. 213 to 236. I shall speak also to Amendments Nos. 269 and 270.

These are fairly minor amendments to tidy up or clarify certain insolvency law provisions of the past and to add some further references to relevant Scottish proceedings.

Moved, That the House do agree with the Commons in the said amendments. — (Lord Fraser of Carmyllie.)

On Question, Motion agreed to.