This provision limits the possibility for a supplier of goods or services to an undertaking, in the context of formal rescue or insolvency proceedings, to terminate the supply contract. The ipso facto measure applies when the recipient of the delivery is subject to a series of insolvency proceedings, such as the new moratorium and the RESTRUCTURING PLAN of CIGA, in addition to management and liquidation (among others). Unlike some of the temporary amendments contained in the CIGA, which we discuss in our CIGA briefing, the Ipso facto provision is a permanent amendment to the Restructuring and Insolvency Regime of the United Kingdom. Another piece of good news for financiers (and borrowers) under the new ipso facto regime is that, with corresponding exceptions, project parties may be prevented from exercising their rights from project documents, allowing the borrower`s day-to-day operations to be maintained despite insolvency. In addition, the final version of the declaration also provides for an ipso facto derogation from the regime of the agreement for a secured creditor, in order to designate a receiver (or other liable) for the assets of a company, where the secured creditor has a security interest in all or, essentially, all of the ownership of the company. It is apparent from the explanatory memorandum to the statement that this new derogation is intended to ensure that an entity cannot compromise the ability of a secured creditor by all assets to designate a controller by announcing or proposing a transaction plan. There are uncertainties about the scope of many of these exclusions and a number of specific legal definitions may not meet general expectations as to the meaning of the terms. Caution should therefore be exercised when considering their application to certain agreements and transactions. 1 meaning “without more” or “by this fact or action”. 2ยง 440, para. 4 IRDA. 3 See z.B Toronto-Dominion Bank v Ty (Canada) Inc 42 CBR (4th) 142, 2003 CanLII 43355.
4 Rule 3 of the Insolvency, Restructuring and Dissolution (Contracts Prescribed under Section 440) Regulation 2020. 5 Note that in Canada, the corresponding exclusion applies to a Margin loan as long as it is a deposit or term account of a financial intermediary and in Australia, the corresponding exclusion applies to a contract, agreement or agreement that is or is directly related to a Margin loan (which has a specific definition in the Corporations Act 2001 (Cth). In both cases, the scope of the exclusion of Margin Lending agreements is quite limited to the scope of the applicable legislation. As this term is not defined by IRDA, it may be that not all margin lending arrangements are excluded and that guidance can be obtained from Canada and Australia on the extent of such an exclusion. . . .