Section 164: Disclaimer of property, rescission of contracts, &c., Companies Act 1989

Sections 178, 186, 315 and 345 of the Insolvency Act 1986 (power to disclaim onerous property and court's power to order rescission of contracts, &c.) do not apply in relation to—

a market contract, ...

a qualifying collateral arrangement,

a transfer of a clearing member client contract, a client trade or a qualifying collateral arrangement, as mentioned in paragraphs (c) to (e) of section 158(1),

a qualifying property transfer, or

a contract effected by the recognised body for the purpose of realising property provided as margin in relation to market contracts or as default fund contribution.

In the application of this subsection in Scotland, the reference to sections 178, 315 and 345 shall be construed as a reference to any rule of law having the like effect as those sections.

In Scotland, a trustee in the sequestration of the 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 110 of the Bankruptcy (Scotland) Act 2016 or any rule of law to the like effect applying in liquidations.

Sections 127 and 284 of the Insolvency Act 1986 (avoidance of property dispositions effected after commencement of winding up , submission of bankruptcy application or or presentation of bankruptcy petition), and section 87(4) of the Bankruptcy (Scotland) Act 2016 (effect of dealing with debtor relating to estate vested in ... trustee), do not apply to—

a market contract, or any disposition of property in pursuance of such a contract,

the provision of margin in relation to market contracts,

the provision of default fund contribution to the recognised body,

a qualifying collateral arrangement,

a transfer of a clearing member client contract, a client trade or a qualifying collateral arrangement, as mentioned in paragraphs (c) to (e) of section 158(1),

a qualifying property transfer

a contract effected by the recognised body for the purpose of realising property provided as margin in relation to a market contract or as default fund contribution, or any disposition of property in pursuance of such a contract, or

any disposition of property in accordance with the rules of the recognised body as to the application of property provided as margin or as default fund contribution.

However, where—

a market contract is entered into by a person who has notice that a bankruptcy application has been submitted or a petition has been presented for the winding up or bankruptcy or sequestration of the estate of the other party to the contract, or

margin in relation to a market contract or default fund contribution is accepted by a person who has notice that such an application has been made or petition presented in relation to the person by whom or on whose behalf the margin or default fund contribution 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 or default fund contribution is recoverable from him by the relevant office-holder unless the court directs otherwise.

Subsection (4)(a) does not apply where the person entering into the contract is a recognised body acting in accordance with its rules, or where the contract is effected under the default rules of such a recognised body; but subsection (4)(b) applies in relation to the provision of—

margin in relation to any such contract, unless the contract has been transferred in accordance with the default rules of the central counterparty, or

default fund contribution.

Any sum recoverable by virtue of subsection (4) ranks for priority, in the event of the insolvency of the person from whom it is due, immediately before preferential or, in Scotland, preferred debts.

Section 164: Disclaimer of property, rescission of contracts, &c.

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