Article 53 Mutual credits and set-offI1

England and Wales

(1)

This Rule applies where the energy administrator, being authorised to make the distribution in question, has pursuant to Rule 63, given notice that he proposes to make it.

(2)

In this Rule “mutual dealings” means mutual credits, mutual debts or other mutual dealings between the protected energy company and any creditor of the protected energy company proving or claiming to prove for a debt in the energy administration but does not include any of the following—

(a)

any debt arising out of an obligation incurred after the protected energy company entered energy administration;

(b)

any debt arising out of an obligation incurred at a time when the creditor had notice that an application for an energy administration order was pending;

(c)

any debt which has been acquired by a creditor by assignment or otherwise, pursuant to an agreement where that agreement was entered into between the creditor and any other party—

(i)

after the protected energy company entered energy administration; or

(ii)

at a time when the creditor had notice that an application for an energy administration order was pending.

(3)

An account shall be taken as at the date of the notice referred to in paragraph (1) of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set off against the sums due from the other.

(4)

A sum shall be regarded as being due to or from the protected energy company for the purposes of paragraph (3) whether—

(a)

it is payable at present or in the future;

(b)

the obligation by virtue of which it is payable is certain or contingent; or

(c)

its amount is fixed or liquidated, or is capable of being ascertained by fixed rules as a matter of opinion.

(5)

Rule 49 shall apply for the purposes of this Rule to an obligation to or from the protected energy company which, by virtue of its being subject to any contingency or for any other reason, does not bear a certain value.

(6)

Rules 54 to 56 shall apply for the purposes of this Rule in relation to any sums due to the protected energy company which—

(a)

are payable in a currency other than sterling;

(b)

are of a periodical nature; or

(c)

bear interest.

(7)

Rule 73 shall apply for the purposes of this Rule to any sum due to or from the protected energy company which is payable in the future.

(8)

Only the balance (if any) of the account owed to the creditor is provable in the energy administration. Alternatively the balance (if any) owed to the protected energy company shall be paid to the energy administrator as part of the assets except where all or part of the balance results from a contingent or prospective debt owed by the creditor and in such a case the balance (or that part of it which results from the contingent or prospective debt) shall be paid if and when the debt becomes due and payable.

(9)

In this Rule “obligation” means an obligation however arising, whether by virtue of an agreement, rule of law or otherwise.

Annotations

Commencement

I1: Rule 53 in force at 1.10.2005, see rule 1