Document ID: chunk:federal_register_of_legislation:C2024C00373:section:10:p2
Version: federal_register_of_legislation:C2024C00373
Segment Type: section
Provision Reference: s 10 (pt 2/2)
Character Range: 29790–31675

(f) for an arrangement that is governed by the rules of a licensed CS facility (within the meaning of the Corporations Act 2001)—a payment, or a transfer of property, by a party under the arrangement to discharge a net obligation is not to be void or voidable in the external administration; and
 (g) paragraphs (a) to (f) apply despite:
 (i) any disposal of rights that may be netted under the arrangement; or
 (ii) the creation of any encumbrance, or any other interest, in relation to those rights; or
 (iii) the operation of any encumbrance, or any other interest, in relation to those rights;
  in contravention of a prohibition in the arrangement.
Note 1: Paragraphs (2)(a) and (2)(aa)—These paragraphs only authorise the party to take action to arrive at a net obligation; they do not authorise the party to settle the net obligation by payment or transfer of property.
Note 2: By giving express recognition to approved netting arrangements, subsections (1) and (2) remove the basis for arguing that the arrangements are void as contrary to public policy embodied in the laws dealing with insolvency.
 (3) Subsections (1) and (2) have effect despite any other law (including the specified provisions and the specified stay provisions).
Note: Section 5 defines specified provisions and specified stay provision.
 (4) If:
 (a) a party to an approved netting arrangement goes into external administration; and
 (b) an obligation owed by the party to another party to the arrangement has been netted under the arrangement; and
 (c) a direct payment by the party owing the obligation to the other party would have been voidable in the external administration if it had been made to settle the obligation on the day on which the netting occurred;
the external administrator may recover from the other party for the benefit of creditors an amount equal to the amount of the obligation.