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(3) The following provisions apply in relation to a transfer scheme made by virtue
5of subsection (2).

(4) The Transfer of Undertakings (Protection of Employment) Regulations 2006
apply to a transfer, by virtue of a transfer scheme, of rights and liabilities under
a contract of employment (whether or not the transfer would otherwise be a
relevant transfer for the purposes of those regulations).

(5) 10Where an employee of the Postal Services Commission becomes an employee
of OFCOM by virtue of a transfer scheme—

(a) a period of employment with that Commission is to be treated as a
period of employment with OFCOM, and

(b) the transfer to OFCOM is not to be treated as a break in service.

(6) 15The transfer of functions, property, rights or liabilities from the Postal Services
Commission to OFCOM under or by virtue of this Act is not to be treated as a
merger for accounting purposes.

63 Interpretation of Part 3 etc

(1) In this Part—

(2) In this Part—

(a) references to the provision of a universal postal service are to be read in
5accordance with sections 29 to 32, and

(b) references to the provision of a service within the scope of the universal
postal service are to be read in accordance with section 39.

(3) In the case of a universal service provider who—

(a) provides part of a universal postal service, or

(b) 10provides a universal postal service, or part of a universal postal service,
in a specified area of the United Kingdom,

references in this Part to the provision of a universal postal service are to the
provision of that part or to the provision of a universal postal service, or part
of a universal postal service, in that area.

(4) 15For the purposes of this Part—

(a) “contravention” includes a failure to comply (and related expressions
are to be read accordingly),

(b) where there is a contravention of an obligation that requires a person to
do anything within a particular period or before a particular time, the
20contravention is to be taken to continue after the end of that period, or
after that time, until that thing is done,

(c) references to remedying the consequences of a contravention include
paying an amount to a person—

(i) by way of compensation for loss or damage suffered by the
25person, or

(ii) in respect of annoyance, inconvenience or anxiety to which the
person has been put, and

(d) in determining whether a contravention is a repeated contravention for
any purposes, a notification of a contravention under any provision is
30to be ignored if it has been withdrawn before the imposition of a
penalty in respect of the matters notified.

(5) Nothing in any provision of this Part that authorises the inclusion of any
particular kind of provision in any regulatory condition or direction is to be
read as restricting the generality of the provision that may be included in the
35condition or direction.

(6) Any power under this Part to provide for the manner in which anything is to
be done includes power to provide for the form in which it is to be done.

(7) Any reference in this Part to OFCOM’s functions under an enactment includes
their power to do anything which appears to them to be incidental or
40conducive to the carrying out of their functions under that enactment.

64 Transitional provisions for Part 3

Schedule 9 makes transitional provision in connection with the coming into
force of this Part and provides for OFCOM to carry out certain functions before
the provisions of this Part come into force generally.

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65 Review of Part 3

(1) As soon as reasonably practicable after the end of the review period, the
Secretary of State must—

(a) carry out a review of the provisions of this Part, and

(b) 5set out the conclusions of the review in a report.

(2) The report must, in particular—

(a) set out the objectives intended to be achieved by the regulatory system
established by those provisions,

(b) assess the extent to which those objectives have been achieved, and

(c) 10assess whether those objectives remain appropriate and, if so, the
extent to which they could be achieved with a system that imposed less
regulation.

(3) The review period is the period of 5 years beginning with the day on which the
provisions of this Part come generally into force.

(4) 15The Secretary of State must lay the report before Parliament.

Part 4 Special administration regime

Postal administration orders

66 Postal administration orders

(1) 20In this Part “postal administration order” means an order which—

(a) is made by the court in relation to a company which is a universal
service provider, and

(b) directs that, while the order is in force, the company’s affairs, business
and property are to be managed by a person appointed by the court.

(2) 25The person appointed in relation to a company for the purposes of a postal
administration order is referred to in this Part as the postal administrator of the
company.

(3) The postal administrator of a company must—

(a) manage the company’s affairs, business and property, and

(b) 30exercise and perform all the powers and duties conferred or imposed
on the postal administrator of the company,

so as to achieve the objective set out in section 67.

(4) In relation to a postal administration order applying to a foreign company,
references in this section to the company’s affairs, business and property are
35references to its UK affairs, business and property.

67 Objective of a postal administration

(1) The objective of a postal administration is to secure—

(a) that a universal postal service is provided in accordance with the
standards set out in the universal postal service order, and

(b) 40that it becomes unnecessary, by one or both of the following means, for
the postal administration order to remain in force for that purpose.

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(2) Those means are—

(a) the rescue as a going concern of the company subject to the order, and

(b) relevant transfers.

(3) A transfer is a “relevant” transfer if it is a transfer as a going concern—

(a) 5to another company, or

(b) as respects different parts of the undertaking of the company subject to
the order, to two or more different companies,

of so much of that undertaking as it is appropriate to transfer for the purpose
of achieving the objective of the postal administration.

(4) 10The means by which relevant transfers may be effected include, in particular—

(a) a transfer of the undertaking of the company subject to the order, or of
a part of its undertaking, to a wholly-owned subsidiary of that
company, and

(b) a transfer to a company of securities of a wholly-owned subsidiary to
15which there has been a transfer within paragraph (a).

In this subsection “wholly-owned subsidiary” has the meaning given by
section 1159 of the Companies Act 2006.

(5) The objective of a postal administration may be achieved by relevant transfers
to the extent only that—

(a) 20the rescue as a going concern of the company is not reasonably
practicable or is not reasonably practicable without the transfers,

(b) the rescue of the company as a going concern will not achieve the
objective of the postal administration or will not do so without the
transfers,

(c) 25the transfers would produce a result for the company’s creditors as a
whole that is better than the result that would be produced without
them, or

(d) the transfers would, without prejudicing the interests of the company’s
creditors as a whole, produce a result for the company’s members as a
30whole that is better than the result that would be produced without
them.

68 Applications for postal administration orders

(1) An application for a postal administration order in relation to a company may
be made only—

(a) 35by the Secretary of State, or

(b) with the consent of the Secretary of State, by OFCOM.

(2) The applicant for a postal administration order in relation to a company must
give notice of the application to—

(a) every person who has appointed an administrative receiver of the
40company,

(b) every person who is or may be entitled to appoint an administrative
receiver of the company,

(c) every person who is or may be entitled to make an appointment in
relation to the company under paragraph 14 of Schedule B1 to the 1986
45Act (appointment of administrators by holders of floating charges), and

(d) such other persons as may be prescribed by postal administration rules.

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(3) The notice must be given as soon as reasonably practicable after the making of
the application.

(4) In this section “administrative receiver” means—

(a) an administrative receiver within the meaning given by section 251 of
5the 1986 Act for the purposes of Parts 1 to 7 of that Act, or

(b) a person whose functions in relation to a foreign company are
equivalent to those of an administrative receiver and relate only to its
UK affairs, business and property.

69 Powers of court

(1) 10On hearing an application for a postal administration order, the court has the
following powers—

(a) it may make the order,

(b) it may dismiss the application,

(c) it may adjourn the hearing conditionally or unconditionally,

(d) 15it may make an interim order,

(e) it may treat the application as a winding-up petition and make any
order the court could make under section 125 of the 1986 Act (power of
court on hearing winding-up petition), and

(f) it may make any other order which it thinks appropriate.

(2) 20The court may make a postal administration order in relation to a company
only if it is satisfied—

(a) that the company is unable, or is likely to be unable, to pay its debts, or

(b) that, on a petition by the Secretary of State under section 124A of the
1986 Act, it would be just and equitable (disregarding the objective of
25the postal administration) to wind up the company in the public
interest.

(3) The court may not make a postal administration order on the ground set out in
subsection (2)(b) unless the Secretary of State has certified to the court that the
case is one in which the Secretary of State considers (disregarding the objective
30of the postal administration) that it would be appropriate to petition under
section 124A of the 1986 Act.

(4) The court has no power to make a postal administration order in relation to a
company which—

(a) is in administration under Schedule B1 to the 1986 Act, or

(b) 35has gone into liquidation (within the meaning of section 247(2) of the
1986 Act).

(5) A postal administration order comes into force—

(a) at the time appointed by the court, or

(b) if no time is appointed by the court, when the order is made.

(6) 40An interim order under subsection (1)(d) may, in particular—

(a) restrict the exercise of a power of the company or of its directors, or

(b) make provision conferring a discretion on a person qualified to act as
an insolvency practitioner in relation to the company.

(7) In the case of a foreign company, subsection (6)(a) is to be read as a reference
45to restricting the exercise of a power of the company or of its directors—

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(a) within the United Kingdom, or

(b) in relation to the company’s UK affairs, business or property.

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

(a) it is a company which is deemed to be unable to pay its debts under
5section 123 of the 1986 Act, or

(b) it is an unregistered company which is deemed, as a result of any of
sections 222 to 224 of the 1986 Act, to be so unable for the purposes of
section 221 of the 1986 Act, or which would be so deemed if it were an
unregistered company for the purposes of those sections.

70 10Postal administrators

(1) The postal administrator of a company—

(a) is an officer of the court, and

(b) in exercising and performing powers and duties in relation to the
company, is the company’s agent.

(2) 15The management by the postal administrator of a company of any of its affairs,
business or property must be carried out for the purpose of achieving the
objective of the postal administration as quickly and as efficiently as is
reasonably practicable.

(3) The postal administrator of a company must exercise and perform powers and
20duties in the way which, so far as it is consistent with the objective of the postal
administration to do so, best protects—

(a) the interests of the company’s creditors as a whole, and

(b) subject to those interests, the interests of the company’s members as a
whole.

(4) 25A person is not to be the postal administrator of a company unless qualified to
act as an insolvency practitioner in relation to the company.

(5) If the court appoints two or more persons as the postal administrator of a
company, the appointment must set out—

(a) which (if any) of the powers and duties of a postal administrator are to
30be exercisable or performed only by the appointees acting jointly,

(b) the circumstances (if any) in which powers and duties of a postal
administrator are to be exercisable, or may be performed, by one of the
appointees, or by particular appointees, acting alone, and

(c) the circumstances (if any) in which things done in relation to one of the
35appointees, or in relation to particular appointees, are to be treated as
done in relation to all of them.

71 Conduct of administration, transfer schemes etc

(1) Schedule 10 contains provision applying the provisions of Schedule B1 to the
1986 Act, and certain other enactments, to postal administration orders.

(2) 40Schedule 11 contains provision for transfer schemes to achieve the objective of
a postal administration.

(3) The power to make rules under section 411 of the 1986 Act is to apply for the
purpose of giving effect to this Part as it applies for the purpose of giving effect

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to Parts 1 to 7 of that Act (and, accordingly, as if references in that section to
those Parts included references to this Part).

(4) Section 413(2) of the 1986 Act (duty to consult Insolvency Rules Committee
about rules) is not to apply to rules made under section 411 of the 1986 Act as
5a result of this section.

Restrictions on other insolvency procedures

72 Winding-up orders

(1) This section applies if a person other than the Secretary of State petitions for the
winding-up of a company which is a universal service provider.

(2) 10The court is not to exercise its powers on a winding-up petition unless—

(a) notice of the petition has been served on the Secretary of State and
OFCOM, and

(b) a period of at least 14 days has elapsed since the service of the last of
those notices to be served.

(3) 15If an application for a postal administration order in relation to the company is
made to the court in accordance with section 68(1) before a winding-up order
is made on the petition, the court may exercise its powers under section 69
(instead of exercising its powers on the petition).

(4) References in this section to the court’s powers on a winding-up petition are
20to—

(a) its powers under section 125 of the 1986 Act (other than its power of
adjournment), and

(b) its powers under section 135 of the 1986 Act.

73 Voluntary winding up

(1) 25A company which is a universal service provider has no power to pass a
resolution for voluntary winding up without the permission of the court.

(2) Permission may be granted by the court only on an application made by the
company.

(3) The court is not to grant permission unless—

(a) 30notice of the application has been served on the Secretary of State and
OFCOM, and

(b) a period of at least 14 days has elapsed since the service of the last of
those notices to be served.

(4) If an application for a postal administration order in relation to the company is
35made to the court in accordance with section 68(1) after an application for
permission under this section has been made and before it is granted, the court
may exercise its powers under section 69 (instead of granting permission).

(5) In this section “a resolution for voluntary winding up” has the same meaning
as in the 1986 Act.

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74 Making of ordinary administration orders

(1) This section applies if a person other than the Secretary of State makes an
ordinary administration application in relation to a company which is a
universal service provider.

(2) 5The court must dismiss the application if—

(a) a postal administration order is in force in relation to the company, or

(b) a postal administration order has been made in relation to the company
but is not yet in force.

(3) If subsection (2) does not apply, the court, on hearing the application, must not
10exercise its powers under paragraph 13 of Schedule B1 to the 1986 Act (other
than its power of adjournment) unless—

(a) notice of the application has been served on the Secretary of State and
OFCOM,

(b) a period of at least 14 days has elapsed since the service of the last of
15those notices to be served, and

(c) there is no application for a postal administration order which is
outstanding.

(4) Paragraph 44 of Schedule B1 to the 1986 Act (interim moratorium) does not
prevent, or require the permission of the court for, the making of an application
20for a postal administration order.

(5) On the making of a postal administration order in relation to a company, the
court must dismiss any ordinary administration application made in relation
to the company which is outstanding.

(6) In this section “ordinary administration application” means an application in
25accordance with paragraph 12 of Schedule B1 to the 1986 Act.

75 Administrator appointments by creditors etc

(1) Subsections (2) to (4) make provision about appointments under paragraph 14
or 22 of Schedule B1 to the 1986 Act (powers to appoint administrators) in
relation to a company which is a universal service provider.

(2) 30If in any case—

(a) a postal administration order is in force in relation to the company,

(b) a postal administration order has been made in relation to the company
but is not yet in force, or

(c) an application for a postal administration order in relation to the
35company is outstanding,

a person may not take any step to make an appointment.

(3) In any other case, an appointment takes effect only if each of the following
conditions are met.

(4) The conditions are—

(a) 40that a copy of every document in relation to the appointment that is
filed or lodged with the court in accordance with paragraph 18 or 29 of
Schedule B1 to the 1986 Act has been served on the Secretary of State
and OFCOM,

(b) that a period of 14 days has elapsed since the service of the last of those
45copies to be served,

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(c) that there is no outstanding application to the court for a postal
administration order in relation to the company, and

(d) that the making of an application for a postal administration order in
relation to the company has not resulted in the making of a postal
5administration order which is in force or is still to come into force.

(5) Paragraph 44 of Schedule B1 to the 1986 Act (interim moratorium) does not
prevent, or require the permission of the court for, the making of an application
for a postal administration order at any time before the appointment takes
effect.

76 10Enforcement of security

(1) A person may not take any step to enforce a security over property of a
company which is a universal service provider unless—

(a) notice of the intention to do so has been served on the Secretary of State
and OFCOM, and

(b) 15a period of at least 14 days has elapsed since the service of the last of
those notices to be served.

(2) In the case of a foreign company which is a universal service provider, the
reference to the property of the company is to its property in the United
Kingdom.

20Financial support for companies in administration

77 Grants and loans

(1) This section applies if a postal administration order has been made in relation
to a company.

(2) The Secretary of State may, with the consent of the Treasury, make grants or
25loans to the company of such amounts as it appears to the Secretary of State
appropriate for achieving the objective of the postal administration.

(3) The grants or loans may be made in whatever manner, and on whatever terms,
the Secretary of State considers appropriate.

(4) The terms on which the grants may be made include, in particular, terms
30requiring the whole or a part of the grants to be repaid to the Secretary of State
if there is a contravention of the other terms on which they are made.

(5) The terms on which loans may be made include, in particular, terms
requiring—

(a) the loans to be repaid at such times and by such methods as the
35Secretary of State may, with the consent of the Treasury, from time to
time direct, and

(b) interest to be paid on the loans at such rates and at such times as the
Secretary of State may, with the consent of the Treasury, from time to
time direct.

(6) 40The Secretary of State must pay sums received as a result of this section into the
Consolidated Fund.

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78 Indemnities

(1) This section applies if a postal administration order has been made in relation
to a company.

(2) The Secretary of State may, with the consent of the Treasury, agree to
5indemnify persons in respect of one or both of the following—

(a) liabilities incurred in connection with the exercise and performance of
powers and duties by the postal administrator, and

(b) loss or damage sustained in that connection.

(3) The agreement may be made in whatever manner, and on whatever terms, the
10Secretary of State considers appropriate.

(4) As soon as practicable after agreeing to indemnify persons under this section,
the Secretary of State must lay a statement of the agreement before Parliament.

(5) If sums are paid by the Secretary of State in consequence of an indemnity
agreed to under this section, the company must pay the Secretary of State—

(a) 15such amounts in or towards the repayment to the Secretary of State of
those sums as the Secretary of State may, with the consent of the
Treasury, direct, and

(b) interest on amounts outstanding under this subsection at such rates as
the Secretary of State may, with the consent of the Treasury, direct.

(6) 20The payments must be made by the company at such times and in such manner
as the Secretary of State may, with the consent of the Treasury, determine.

(7) Subsection (5) does not apply in the case of a sum paid by the Secretary of State
for indemnifying a person in respect of a liability to the company.

(8) If a sum has been paid out in consequence of an indemnity agreed to under this
25section, the Secretary of State must lay a statement relating to that sum before
Parliament—

(a) as soon as practicable after the end of the financial year in which the
sum is paid out, and

(b) if subsection (5) applies to the sum, as soon as practicable after the end
30of each subsequent financial year in relation to which the repayment
condition has not been met.

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