Energy Bill [HL]

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Energy Bill [HL]

Energy Bill [HL]
Schedule 20 — Conduct of energy administration
Part 4 — Other Modifications
255

(b)
in sub-paragraph (2)(b), after “instrument” there were
inserted “or by the law of the place where the company is
incorporated”.
Part 4
Other Modifications
5
General modifications
41    (1)
Subject to paragraph 42, every reference falling within sub-paragraph (2)
which is contained—
(a)
in a provision of the 1986 Act (other than Schedule B1), or
(b)
in any other enactment passed before this Act,
10

shall have effect as including a reference to whatever corresponds to it for
the purposes of this paragraph.
      (2)
Those references are those (however expressed) which are or include
references to—
(a)
an administrator appointed by an administration order;
15
(b)
an administration order;
(c)
an application for an administration order;
(d)
a company in administration;
(e)
entering into administration;
(f)
Schedule B1 or a provision of that Schedule.
20
      (3)
For the purposes of this paragraph—
(a)
an energy administrator corresponds to an administrator appointed
by an administration order;
(b)
an energy administration order corresponds to an administration
order;
25
(c)
an application for an energy administration order corresponds to an
application for an administration order;
(d)
a company in energy administration corresponds to a company in
administration;
(e)
entering into energy administration corresponds to entering into
30
administration;
(f)
what corresponds to Schedule B1 or a provision of that Schedule is
that Schedule or that provision as applied by Part 1 of this Schedule.
42    (1)
Paragraph 41, in its application to section 1(3) of the 1986 Act, does not
entitle the energy administrator of an unregistered company to make a
35
proposal under Part 1 of that Act (company voluntary arrangements).
      (2)
Paragraph 41 does not confer any right under section 7(4) of the 1986 Act
(implementation of voluntary arrangements) for a supervisor of voluntary
arrangements to apply for an energy administration order in relation to a
protected energy company.
40
      (3)
Paragraph 41 does not apply to section 359 of the Financial Services and
Markets Act 2000 (c. 8) (administration applications by Financial Services
Authority).

Energy Bill [HL]
Schedule 20 — Conduct of energy administration
Part 4 — Other Modifications
256

Modifications of 1986 Act
43
In section 5 of the 1986 Act (effect of approval of voluntary arrangements)
after subsection (4) insert—
“(5)
Where the company is in energy administration, the court shall not
make an order or give a direction under subsection (3) unless—
5
(a)
the court has given the Secretary of State or the Gas and
Electricity Markets Authority a reasonable opportunity of
making representations to it about the proposed order or
direction; and
(b)
the order or direction is consistent with the objective of the
10
energy administration.
(6)
In subsection (5) ‘in energy administration’ and ‘objective of the
energy administration’ are to be construed in accordance with
Schedule B1 to this Act, as applied by Part 1 of Schedule 20 to the
Energy Act 2004.”
15
44    (1)
Section 6 of that Act (challenge of decisions in relation to voluntary
arrangements) is amended as follows.
      (2)
In subsection (2) for “this section” substitute “subsection (1)”.
      (3)
After that subsection insert—
“(2A)
Subject to this section, where a voluntary arrangement in relation to
20
a company in energy administration is approved at the meetings
summoned under section 3, an application to the court may be
made—
(a)
by the Secretary of State, or
(b)
with the consent of the Secretary of State, by the Gas and
25
Electricity Markets Authority,

on the ground that the voluntary arrangement is not consistent with
the achievement of the objective of the energy administration.”
      (4)
In subsection (4) after “subsection (1)” insert “or, in the case of an application
under subsection (2A), as to the ground mentioned in that subsection”.
30
      (5)
After subsection (7) insert—
“(8)
In this section ‘in energy administration’ and ‘objective of the energy
administration’ are to be construed in accordance with Schedule B1
to this Act, as applied by Part 1 of Schedule 20 to the Energy Act
2004.”
35
45
In section 129(1A) of that Act (commencement of winding up), the reference
to paragraph 13(1)(e) of Schedule B1 includes a reference to section 154(1)(e)
of this Act.
Power to make further modifications
46    (1)
The Secretary of State may by order make such modifications of—
40
(a)
the 1986 Act, or
(b)
any other enactment passed before this Act that relates to insolvency
or makes provision by reference to anything that is or may be done
under the 1986 Act,

Energy Bill [HL]
Schedule 21 — Energy transfer schemes
257


as he considers appropriate in relation to any provision made by or under
this Chapter.
      (2)
An order under this paragraph may also make modifications of this Part of
this Schedule.
      (3)
The power to make an order containing provision authorised by this
5
paragraph is subject to the affirmative resolution procedure.
Interpretation of Part 4 of Schedule
47
In this Part of this Schedule—

“administration order”, “administrator”, “enters administration” and
“in administration” are to be construed in accordance with Schedule
10
B1 (disregarding Part 1 of this Schedule);

“enters energy administration” and “in energy administration” are to
be construed in accordance with Schedule B1 (as applied by Part 1 of
this Schedule);

“Schedule B1” means Schedule B1 to the 1986 Act.
15
Schedule 21
Section 156.

Energy transfer schemes
Application of Schedule
1
This Schedule applies where—
(a)
the court has made an energy administration order in relation to a
20
company (the “old energy company”); and
(b)
it is proposed that a transfer falling within section 152(3) be made to
another company (the “new energy company”).
2
It is for the energy administrator, while the energy administration order is
in force, to act on behalf of the old energy company in the doing of anything
25
that it is authorised or required to do by or under this Schedule.
Making of energy transfer schemes
3     (1)
The old energy company may—
(a)
with the consent of the new energy company, and
(b)
for the purpose of giving effect to the proposed transfer,
30

make a scheme under this Schedule for the transfer of property, rights and
liabilities from the old energy company to the new energy company (an
“energy transfer scheme”).
      (2)
Such a scheme may be made only at a time when the energy administration
order is in force in relation to the old energy company.
35
      (3)
An energy transfer scheme may set out the property, rights and liabilities to
be transferred in one or more of the following ways—
(a)
by specifying or describing them in particular;
(b)
by identifying them generally by reference to, or to a specified part
of, the undertaking of the old energy company; or
40
(c)
by specifying the manner in which they are to be determined.

Energy Bill [HL]
Schedule 21 — Energy transfer schemes
258

      (4)
An energy transfer scheme shall take effect in accordance with paragraph 8
at the time appointed by the court.
      (5)
But the court must not appoint a time for a scheme to take effect unless that
scheme has been approved by the Secretary of State.
      (6)
The Secretary of State may modify an energy transfer scheme before
5
approving it, but only modifications to which both the old energy company
and the new energy company have consented may be made.
      (7)
In deciding whether to approve an energy transfer scheme, the Secretary of
State must have regard, in particular, to—
(a)
the public interest; and
10
(b)
the effect the scheme is likely to have (if any) upon the interests of
third parties.
      (8)
Before approving an energy transfer scheme, the Secretary of State must
consult GEMA.
      (9)
The old energy company and the new energy company each have a duty to
15
provide the Secretary of State with all information and other assistance that
he may reasonably require for the purposes of, or in connection with, the
exercise of the powers conferred on him by this paragraph.
Provision that may be made by a scheme
4     (1)
An energy transfer scheme may contain provision—
20
(a)
for the creation, in favour of the old energy company or the new
energy company, of an interest or right in or in relation to property
transferred in accordance with the scheme;
(b)
for giving effect to a transfer to the new energy company by the
creation, in favour of that company, of an interest or right in or in
25
relation to property retained by the old energy company;
(c)
for the creation of new rights and liabilities (including rights of
indemnity and duties to indemnify) as between the old energy
company and the new energy company;
(d)
in connection with any provision made under this sub-paragraph,
30
provision making incidental provision as to the interests, rights and
liabilities of other persons with respect to the property, rights and
liabilities to which the scheme relates.
      (2)
The property, rights and liabilities of the old energy company that may be
transferred in accordance with an energy transfer scheme include—
35
(a)
property, rights and liabilities that would not otherwise be capable
of being transferred or assigned by the old energy company;
(b)
property acquired, and rights and liabilities arising, in the period
after the making of the scheme but before it takes effect;
(c)
rights and liabilities arising after it takes effect in respect of matters
40
occurring before it takes effect;
(d)
property situated anywhere in Great Britain or elsewhere;
(e)
rights and liabilities under the law of a part of Great Britain or of a
place outside Great Britain;
(f)
rights and liabilities under an enactment, Community instrument or
45
subordinate legislation.

Energy Bill [HL]
Schedule 21 — Energy transfer schemes
259

      (3)
The transfers to which effect may be given by an energy transfer scheme
include transfers of interests and rights that are to take effect in accordance
with the scheme as if there were—
(a)
no such requirement to obtain a person’s consent or concurrence,
(b)
no such liability in respect of a contravention of any other
5
requirement, and
(c)
no such interference with any interest or right,

as there would be, in the case of a transaction apart from this Act, by reason
of a provision falling within sub-paragraph (4).
      (4)
A provision falls within this sub-paragraph to the extent that it has effect
10
(whether under an enactment or agreement or otherwise) in relation to the
terms on which the old energy company is entitled, or subject, to anything
to which the transfer relates.
      (5)
Sub-paragraph (6) applies where (apart from that sub-paragraph) a person
would be entitled, in consequence of anything done or likely to be done by
15
or under this Act in connection with an energy transfer scheme—
(a)
to terminate, modify, acquire or claim an interest or right; or
(b)
to treat an interest or right as modified or terminated.
      (6)
That entitlement—
(a)
shall not be enforceable in relation to that interest or right until after
20
the transfer of the interest or right by the scheme; and
(b)
shall then be enforceable in relation to the interest or right only in so
far as the scheme contains provision for the interest or right to be
transferred subject to whatever confers that entitlement.
      (7)
Sub-paragraphs (3) to (6) have effect where shares in a subsidiary of the old
25
energy company are transferred—
(a)
as if the reference in sub-paragraph (4) to the terms on which the old
energy company is entitled or subject to anything to which the
transfer relates included a reference to the terms on which the
subsidiary is entitled or subject to anything immediately before the
30
transfer takes effect; and
(b)
in relation to an interest or right of the subsidiary, as if the references
in sub-paragraph (6) to the transfer of the interest or right included a
reference to the transfer of the shares.
      (8)
Sub-paragraphs (3) and (4) apply to the creation of an interest or right by an
35
energy transfer scheme as they apply to the transfer of an interest or right.
Transfer of licences
5     (1)
The provision that may be made by an energy transfer scheme includes the
transfer of a relevant licence from the old energy company to the new energy
company.
40
      (2)
Such a transfer may relate to the whole or any part of the licence.
      (3)
Where such a transfer relates to a part of the licence, the provision made
under sub-paragraph (1) may include—
(a)
provision apportioning responsibility between the old energy
company and the new energy company in relation to—
45
(i)
the making of payments required by conditions included in
the licence;

Energy Bill [HL]
Schedule 21 — Energy transfer schemes
260

(ii)
ensuring compliance with any other requirements of the
conditions included in the licence; and
(b)
provision making incidental modifications to the terms and
conditions of the licence.
      (4)
References in this paragraph to a part of a licence are references to one or
5
both of—
(a)
a part of the activities authorised by the licence;
(b)
a part of the area in relation to which the holder of the licence is
authorised to carry on those activities.
Powers and duties under statutory provisions
10
6     (1)
The provision that may be made by an energy transfer scheme includes
provision for some or all of the powers and duties to which this paragraph
applies—
(a)
to be transferred to the new energy company; or
(b)
to become powers and duties that are exercisable, or must be
15
performed, concurrently by the old energy company and the new
energy company.
      (2)
Provision falling within sub-paragraph (1) may apply to powers and duties
only in so far as they are exercisable or required to be performed in the area
specified or described in the provision.
20
      (3)
The powers and duties to which this paragraph applies are the powers and
duties conferred or imposed upon the old energy company by or under an
enactment, so far as those powers and duties are connected with—
(a)
the undertaking of the old energy company to the extent the energy
transfer scheme relates to that undertaking; or
25
(b)
any property, rights or liabilities to be transferred in accordance with
the scheme.
      (4)
The powers and duties mentioned in sub-paragraph (3) include, in
particular, powers and duties relating to the carrying out of works or the
acquisition of land.
30
Supplemental provisions relating to transfers
7     (1)
An energy transfer scheme may make incidental, supplemental,
consequential and transitional provision in connection with the other
provisions of the scheme.
      (2)
Such provision may include different provision for different cases or
35
different purposes.
      (3)
In particular, an energy transfer scheme may make provision, in relation to
a provision of the scheme—
(a)
for the new energy company to be treated as the same person in law
as the old energy company;
40
(b)
for agreements made, transactions effected or other things done by
or in relation to the old energy company to be treated, so far as may
be necessary for the purposes of or in connection with a transfer in
accordance with the scheme, as made, effected or done by or in
relation to the new energy company;
45
(c)
for references in an agreement, instrument or other document to the
old energy company or to an employee or office holder with the old

Energy Bill [HL]
Schedule 21 — Energy transfer schemes
261

energy company to have effect, so far as may be necessary for the
purposes of or in connection with a transfer in accordance with the
scheme, with such modifications as are specified in the scheme;
(d)
that the effect of any transfer in accordance with the scheme in
relation to contracts of employment with the old energy company is
5
not to terminate any of those contracts but is to be that periods of
employment with that company are to count for all purposes as
periods of employment with the new energy company;
(e)
for proceedings commenced by or against the old energy company
to be continued by or against the new energy company.
10
      (4)
Sub-paragraph (3)(c) does not apply to references in an enactment or in
subordinate legislation.
      (5)
An energy transfer scheme may make provision for disputes as to the effect
of the scheme between the old energy company and the new energy
company to be referred to such arbitration as may be specified in or
15
determined under the scheme.
      (6)
Where a person is entitled, in consequence of an energy transfer scheme, to
possession of a document relating in part to the title to land or other
property in England and Wales, or to the management of such land or other
property—
20
(a)
the scheme may provide for that person to be treated as having given
another person an acknowledgement in writing of the right of that
other person to production of the document and to delivery of copies
of it; and
(b)
section 64 of the Law of Property Act 1925 (c. 20) (production and
25
safe custody of documents) shall have effect accordingly, and on the
basis that the acknowledgement did not contain an expression of
contrary intention.
      (7)
Where a person is entitled, in consequence of an energy transfer scheme, to
possession of a document relating in part to the title to land or other
30
property in Scotland or to the management of such land or other property,
subsections (1) and (2) of section 16 of the Land Registration (Scotland) Act
1979 (c. 33) (omission of certain clauses in deeds) shall have effect in relation
to the transfer—
(a)
as if the transfer had been effected by deed; and
35
(b)
as if the words “unless specially qualified” were omitted from each
of those subsections.
      (8)
In this paragraph references to a transfer in accordance with an energy
transfer scheme include references to the creation in accordance with such a
scheme of an interest, right or liability.
40
Effect of scheme
8     (1)
In relation to each provision of an energy transfer scheme for the transfer of
property, rights or liabilities, or for the creation of interests, rights or
liabilities—
(a)
this Act shall have effect so as, without further assurance, to vest the
45
property or interests, or those rights or liabilities, in the transferee at
the time appointed by the court for the purposes of paragraph 3(4);
and
(b)
the provisions of that scheme in relation to that property or those
interests, or those rights or liabilities, shall have effect from that time.
50