Energy Act 2004 (c. 20)

(The document as of February, 2008)

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(a) this Act shall have effect so as, without further assurance, to vest the property or interests, or the rights or liabilities, in the transferee at the time at which the scheme comes into force; and

(b) the provisions of that scheme in relation to that property or those interests, or in relation to those rights or liabilities, shall have effect from that time.

(2) Sub-paragraph (1) is subject to so much of a nuclear transfer scheme as provides for--

(a) the transfer of property, rights or liabilities which are to be transferred in accordance with the scheme, or

(b) the creation of interests, rights and liabilities which are to be created in accordance with the scheme,

to be effected by or under an agreement or instrument entered into or executed in pursuance of an obligation imposed by virtue of paragraph 4(1).

(3) In its application to Scotland, sub-paragraph (1) has effect with the omission of the words "without further assurance".

Supplementary provisions of schemes

6 (1) A nuclear transfer scheme may make incidental, supplemental, consequential and transitional provision in connection with the transfers to be made in accordance with the scheme.

(2) Such provision may include different provision for different cases or different purposes.

(3) In particular, a nuclear transfer scheme may make provision, in relation to transfers in accordance with the scheme--

(a) for the transferee to be treated as the same person in law as the transferor;

(b) for agreements made, transactions effected or other things done by or in relation to the transferor to be treated, so far as may be necessary for the purposes of or in connection with the transfers, as made, effected or done by or in relation to the transferee;

(c) for references in an agreement, instrument or other document to the transferor or to an employee or office holder with the transferor to have effect, so far as may be necessary for the purposes of or in connection with any of the transfers, with such modifications as are specified in the scheme; and

(d) for proceedings commenced by or against the transferor to be continued by or against the transferee.

(4) Sub-paragraph (3)(c) does not apply to references in an enactment or in subordinate legislation.

(5) A nuclear transfer scheme may make provision for disputes as to the effect of the scheme--

(a) between different transferees, or

(b) between a transferee and a transferor,

to be referred to such arbitration as may be specified in or determined under the scheme.

(6) Where a person is entitled, in consequence of a nuclear 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--

(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 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 a nuclear transfer scheme, to possession of a document relating in part to the title to land or other 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

(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 a nuclear transfer scheme include references to the creation in accordance with such a scheme of an interest, right or liability.

Proof of title by certificate

7 A certificate issued by the Secretary of State to the effect that any property, right or liability vested at a particular time in accordance with a nuclear transfer scheme in a person specified in the certificate shall be conclusive evidence of the matters specified in the certificate.

Duties in relation to foreign property

8 (1) Where there is a transfer in accordance with a nuclear transfer scheme of--

(a) foreign property, or

(b) a foreign right or liability,

the transferor and the transferee must take all requisite steps to secure that the vesting of the foreign property, right or liability in the transferee by this Act is effective under the relevant foreign law.

(2) Until the vesting of the foreign property, right or liability in the transferee in accordance with the scheme is effective under the relevant foreign law, the transferor must--

(a) hold the property or right for the benefit of the transferee; or

(b) discharge the liability on behalf of the transferee.

(3) Nothing in sub-paragraph (1) or (2) prejudices the effect under the law of a part of the United Kingdom of the vesting of any foreign property, right or liability in the transferee in accordance with a nuclear transfer scheme.

(4) Where--

(a) any foreign property, right or liability is acquired or incurred by the transferor in respect of any other property, right or liability, and

(b) by virtue of this paragraph, the transferor holds the other property or right for the benefit of another person or is required to discharge the liability on behalf of another person,

the property, right or liability acquired or incurred shall immediately become the property, right or liability of that other person.

(5) The provisions of sub-paragraphs (1) to (4) shall have effect in relation to foreign property, rights or liabilities transferred to a person under sub-paragraph (4) as they have effect in the case of property, rights and liabilities transferred in accordance with a nuclear transfer scheme.

(6) Where the transferor of foreign property, or of a foreign right or liability, is the NDA or the UKAEA--

(a) the transferor shall have all such powers as it or they may require for the performance of obligations imposed on it or them under this paragraph; but

(b) the transferee must, so far as practicable, act on behalf of the transferor in performing the obligations imposed on the transferor by this paragraph.

(7) References in this paragraph to foreign property, or to a foreign right or liability, are references to any property, right or liability as respects which an issue arising in any proceedings would be determined (in accordance with the rules of private international law) by reference to the law of a country or territory outside the United Kingdom.

(8) Expenses incurred by a transferor under this paragraph shall be met by the transferee.

(9) An obligation imposed under this paragraph in relation to property, rights or liabilities shall be enforceable as if contained in a contract between the transferor and the transferee.

Modification of scheme by agreement

9 (1) This paragraph applies in the case of a nuclear transfer scheme where a transferee agrees in writing--

(a) with the transferor,

(b) with another transferee under that scheme, or

that provision falling within sub-paragraph (2) be made for the purpose of modifying the effect of the scheme or (as the case may be) the effect of either or both of the schemes.

(2) That provision is provision that--

(a) property, rights or liabilities transferred in accordance with the scheme or either of them, and

(b) property, rights or liabilities acquired or incurred since the transfer in respect of the transferred property, rights or liabilities,

be transferred from one party to the agreement to the other as from a date appointed by the agreement.

(3) If--

(a) the agreement is entered into within the period of three years after the coming into force of any transfer made in accordance with either of the schemes to a party to the agreement, and

(b) the Secretary of State has given his approval to the transfer for which the agreement provides, and to its terms and conditions,

the transfer for which the agreement provides shall take effect on the date appointed by the agreement as if it were a transfer in accordance with a nuclear transfer scheme.

(4) Subject to the approval of the Secretary of State and to sub-paragraph (5), the provisions that may be contained in a modification agreement include any provision in relation to a transfer for which it provides as is capable of being contained in a nuclear transfer scheme in relation to a transfer for which the scheme provides.

(5) Nothing in a modification agreement is to provide for interests, rights or liabilities to be created, as opposed to transferred, except as between persons who are parties to the agreement.

(6) Before--

(a) refusing his approval for the purposes of this paragraph, or

(b) giving his approval for those purposes in a case where the NDA is not a party to the proposed agreement,

the Secretary of State must consult the NDA.

(7) The consent of the Treasury is required for the giving of an approval by the Secretary of State for the purposes of this paragraph.

(8) In this paragraph references to a transfer in accordance with a nuclear transfer scheme include references to the creation of an interest, right or liability in accordance with such a scheme.

The Transfer of Undertakings (Protection of Employment) Regulations 1981

10 (1) The 1981 regulations apply to a transfer of an undertaking or part of an undertaking--

(a) in accordance with a nuclear transfer scheme, or

(b) in accordance with a modification agreement,

as if (in so far as that would not otherwise be the case) the references in those regulations to the transferor were references to the person in whom that undertaking or part was vested immediately before the coming into force of the transfer.

(2) It shall be the duty of the Secretary of State, before--

(a) making a nuclear transfer scheme, or

(b) approving a modification agreement,

to give such notice of his proposals to such persons as he considers appropriate for enabling the provisions of the 1981 regulations applicable to a transfer in accordance with the scheme or agreement to be complied with by the transferor.

(3) In sub-paragraph (2) "the transferor", in relation to a transfer, means the person who is the transferor in relation to that transfer for the purposes of the 1981 regulations.

(4) In this paragraph--

"the 1981 regulations" means the Transfer of Undertakings (Protection of Employment) Regulations 1981 (S.I. 1981/1794);
"undertaking" has the same meaning as in the 1981 regulations.

Compensation for third parties

11 (1) Where--

(a) an entitlement of a third party to an interest or right would, apart from a provision of a nuclear transfer scheme or paragraph 2(4) and (5), arise in respect of the transfer or creation in accordance with a nuclear transfer scheme of any property, rights or liabilities,

(b) the provisions of that scheme or of paragraph 2(4) and (5) have the effect of preventing the third party's entitlement to that interest or right from arising in respect of anything for which the scheme provides, and

(c) provision is not made by the scheme for securing that an entitlement to that interest or right, or to an equivalent interest or right, is preserved or created so as to arise in respect of the first occasion when corresponding circumstances next occur after the coming into force of the transfers for which the scheme provides,

the third party shall be entitled to such compensation as may be just in respect of the extinguishment of his entitlement.

(2) Where, in consequence of provisions included in a nuclear transfer scheme, the interests, rights or liabilities of a third party are modified as mentioned in sub-paragraph (3), the third party shall be entitled to such compensation as may be just in respect of--

(a) any diminution in the value of his interests or rights, or

(b) any increase in the burden of his liabilities,

which is attributable to that modification.

(3) Those modifications are modifications by virtue of which--

(a) an interest of the third party in property is transformed into, or replaced by, an interest in only part of that property;

(b) an interest of the third party in property is transformed into, or replaced by, separate interests in different parts of that property;

(c) a right of the third party against the transferor is transformed into, or replaced by, two or more rights which do not include a right which, on its own, is equivalent (disregarding the person against whom it is enforceable) to the right against the transferor; or

(d) a liability of the third party to the transferor is transformed into, or replaced by, two or more separate liabilities at least one of which is a liability enforceable by a person other than the transferor.

(4) A liability to pay compensation under this paragraph shall fall on such persons mentioned in sub-paragraphs (5) and (6) as--

(a) benefit from the extinguishment of the entitlement mentioned in sub-paragraph (1);

(b) have interests in the whole or any part of the property affected by the modification in question;

(d) are entitled to enforce the liabilities of the person to be compensated which are affected by that modification.

(5) Those persons are--

(a) a Minister of the Crown;

(b) the NDA;

(d) a publicly owned company which is a transferor or a transferee for the purposes of the provisions of the scheme giving rise to the compensation;

(e) a person who consented to the provisions of the scheme giving rise to the compensation.

(6) Where in the case of a recovery scheme the transferor is not a publicly owned company, those persons also include--

(a) the relevant contractor; and

(b) the transferor.

(7) A liability to pay compensation under this paragraph must be apportioned between the persons liable to pay it in such manner as may be appropriate having regard to the extent of--

(a) the benefit they respectively obtain from the extinguishment; or

(b) the interests, rights or liabilities in respect of which they are liable to pay compensation.

(8) Where compensation is paid by any person in connection with provisions of a recovery scheme, the person paying the compensation may, if and to the extent that the Secretary of State so directs, recover the amount paid from--

(a) the relevant contractor; and

(b) the transferor.

(9) A dispute as to--

(a) whether any compensation is to be paid under this paragraph,

(b) the person to or by whom it is to be paid, or

shall be referred to and determined by the person mentioned in sub-paragraph (10).

(10) That person is--

(a) where the claimant requires the matter to be determined in England and Wales or in Northern Ireland, an arbitrator appointed by the Lord Chancellor; and

(b) where the claimant requires the matter to be determined in Scotland, an arbiter appointed by the Lord President of the Court of Session.

(11) In the preceding provisions of this paragraph "third party", in relation to a nuclear transfer scheme, means a person other than the transferor or the transferee.

(12) This paragraph shall have effect in relation to--

(a) the provisions of an agreement or instrument entered into or executed in pursuance of an obligation imposed in a nuclear transfer scheme, and

(b) the provisions of a modification agreement relating to property, rights or liabilities transferred or created in accordance with a nuclear transfer scheme,

as it has effect in relation to the scheme but as if, in the case of a modification agreement, everyone who is not a party to the agreement were a third party.

Compensation for transferor in case of a recovery scheme

12 (1) If the Secretary of State is satisfied in the case of a recovery scheme that it is just to do so he may--

(a) pay compensation to the transferor in respect of property or rights of which he is deprived in accordance with the scheme; or

(b) direct the NDA to pay such compensation.

(2) No compensation shall be payable under this paragraph to the relevant contractor.

(3) Where compensation is paid under this paragraph and the Secretary of State so directs, so much of the compensation as may be specified in the direction may be recovered by him or (as the case may be) by the NDA from the relevant contractor.

(4) The amount of any compensation under this paragraph shall be determined by the Secretary of State.

(5) A dispute as to--

(a) whether any compensation is to be paid under this paragraph,

(b) the person to or by whom it is to be paid, or

shall be referred to and determined by the person mentioned in sub-paragraph (6).

(6) That person is--

(a) where the claimant requires the matter to be determined in England and Wales or in Northern Ireland, an arbitrator appointed by the Lord Chancellor; and

(b) where the claimant requires the matter to be determined in Scotland, an arbiter appointed by the Lord President of the Court of Session.

(7) This paragraph shall have effect in relation to--

(a) the provisions of an agreement or instrument entered into or executed in pursuance of an obligation imposed in a recovery scheme, and

(b) the provisions of a modification agreement relating to property, rights and liabilities transferred or created in accordance with a recovery scheme,

as it has effect in relation to the scheme.

Interpretation

13 (1) In this Schedule--

"modification agreement" means an agreement for a transfer that is to have effect in accordance with paragraph 9(3);
"recovery scheme" means so much of a nuclear transfer scheme as contains provision for or in connection with a transfer authorised by section 41;
"relevant contractor", in relation to a recovery scheme, means the person who (within the meaning of that section) is the contractor in relation to the contract by reference to the breach of which, or the expiry or other termination of which, that scheme was made;
"transferee"--
(a)
in relation to a nuclear transfer scheme, means a person to whom property, rights or liabilities are transferred in accordance with the scheme; and
(b)
in relation to particular property, rights or liabilities transferred or created in accordance with a nuclear transfer scheme, means the person to whom that property or those rights or liabilities are transferred or in whose favour, or in relation to whom, they are created;
"transferor"--
(a)
in relation to a nuclear transfer scheme, means a person from whom property, rights or liabilities are transferred in accordance with the scheme; and
(b)
in relation to particular property, rights or liabilities transferred or created in accordance with a nuclear transfer scheme, means the person from whom that property or those rights or liabilities are transferred or the person who or whose property is subject to the interest or right created by the scheme or for whose benefit the liability is created.

(2) References in this Schedule to a right or to an entitlement to a right include references to an entitlement to exercise a right; and, accordingly, references to a right's arising include references to its becoming exercisable.

Section 39

SCHEDULE 6 Structure etc. of transferee companies

Application and interpretation of Schedule

1 (1) This Schedule applies where--

(a) property, rights and liabilities are transferred to a company ("the transferee company") in accordance with provisions of a nuclear transfer scheme authorised by section 39; and

(b) that company is publicly owned when the transfer takes effect.

(2) In this Schedule--

"the Authorities" means the NDA and the UKAEA;
"the relevant scheme", in relation to the transferee company, means--
(a)
the nuclear transfer scheme containing the provisions authorised by section 39 in accordance with which property, rights and liabilities are vested in that company; and
(b)
any modification agreement (within the meaning of Schedule 5) relating to that scheme;
"transferee company" is to be construed in accordance with sub-paragraph (1);
"transferor", in relation to the transferee company, means the person or body from whom property, rights or liabilities are transferred to the transferee company in accordance with the relevant scheme.

(3) In this paragraph "company" has the same meaning as in the Companies Act 1985 (c. 6).

Initial Government holding in the transferee company

2 (1) As a consequence of the vesting, in accordance with the relevant scheme, of property, rights and liabilities in the transferee company, that company must issue to--

(a) the Treasury, or

(b) a Minister of the Crown,

such securities of the company as the Secretary of State may from time to time direct.

(2) In a case where the transferee company is a wholly-owned subsidiary of one of the Authorities, that company must, as a consequence of the vesting in that company of property, rights and liabilities, issue to the Authority in question such securities of the company as the Authority may from time to time direct.

(3) A direction under sub-paragraph (1) or (2) may be given to a company only at a time when the company is publicly owned.

(4) Securities issued in accordance with a direction under this paragraph--

(a) shall be of such nominal value as the Secretary of State may direct;

(b) shall be issued as fully paid; and

(c) shall be treated for the purposes of the Companies Act 1985 as if they had been paid up by virtue of the payment to the company of their nominal value in cash.

(5) The consent of the Treasury is required for--

(a) the exercise by the Secretary of State or either of the Authorities of a power conferred by the preceding provisions of this paragraph; or

(b) the disposal by a Minister of the Crown, or by either of the Authorities, of securities issued to him or to that Authority in accordance with this paragraph.

(6) The consent of the Secretary of State is required for the giving of a direction by either of the Authorities under sub-paragraph (2).

Government investment in securities of transferee company

3 (1) The Treasury or a Minister of the Crown may use money provided by Parliament for the acquisition of--

(a) securities of the transferee company; or

(b) rights to subscribe for such securities.

(2) The consent of the Treasury is required for--

(a) an acquisition by a Minister of the Crown under sub-paragraph (1); or

(b) a disposal by a Minister of the Crown of securities or rights acquired by virtue of this paragraph.

Exercise of functions through nominees

4 (1) The Treasury, a Minister of the Crown or either of the Authorities may appoint a person to act as a nominee of the Treasury, of that Minister or of that Authority--

(a) in the case of the Treasury or such a Minister, for the purposes of paragraph 2 or 3; and

(b) in the case of one of the Authorities, for the purposes of paragraph 2.

(2) The consent of the Treasury is required for the appointment of a nominee by a Minister of the Crown.

(3) The issue of securities under paragraph 2 to a nominee of the Treasury or of a Minister of the Crown must be in accordance with such directions (if any) as are given from time to time--

(a) by the Treasury; or

(b) with the consent of the Treasury, by the Minister.

(4) The acquisition of securities or rights under paragraph 3 by a nominee of the Treasury or of a Minister of the Crown must be in accordance with such directions (if any) as are given from time to time--

(a) by the Treasury; or

(b) with the consent of the Treasury, by a Minister of the Crown.

(5) A person who by virtue of paragraph 2 or 3 and this paragraph holds securities or rights as a nominee of the Treasury or of a Minister of the Crown must hold them and deal with them--

(a) on such terms, and

(b) in such manner,

as the Treasury or, with the consent of the Treasury, the Secretary of State may direct.

Payment of dividends etc. into Consolidated Fund

5 Dividends or other sums received by the Treasury or a Minister of the Crown in right of, or on the disposal of, securities or rights acquired by virtue of this Schedule must be paid into the Consolidated Fund.

Distributable reserves of transferee companies

6 (1) This paragraph applies where statutory accounts of the transferee company prepared as at a particular time would show the company as having net assets in excess of the aggregate of--

(a) its called-up share capital; and

(b) the amount, apart from the property, rights and liabilities to which the company has become entitled or subject in accordance with the relevant scheme, of its undistributable reserves.

(2) For the purposes of--

(a) section 263 of the Companies Act 1985 (c. 6) (profits available for distribution), and

(b) the preparation of statutory accounts of the company,

that excess shall be treated, except so far as the Secretary of State may otherwise direct, as representing an excess of the company's accumulated realised profits over its accumulated realised losses.

(3) For the purposes of section 264 of the Companies Act 1985 (restriction on distribution of assets), so much of the excess as is the subject of a direction under sub-paragraph (2), shall be treated as comprised in the company's undistributable reserves (subject to any modification of the direction by a subsequent direction under sub-paragraph (4)).

(4) The Secretary of State may give a direction for treatment as profits in relation to an amount equal to the whole or a part of an amount falling to be treated as mentioned in sub-paragraph (3).

(5) A direction for treatment as profits is one that provides that, on the realisation (whether before or after the company in question ceases to be publicly owned) of such profits and losses as may be specified or described in the direction, so much of the amount in relation to which the direction is given as may be determined in accordance with it--

(a) is to cease to be treated as mentioned in sub-paragraph (3); and

(b) is to be treated as comprised in the company's accumulated realised profits.

(6) The Secretary of State must not give a direction under any provision of this paragraph at any time after the transferee company has ceased to be publicly owned.

(7) The consent of the Treasury is required for the giving of a direction under this paragraph.

(8) In this paragraph--

"accounting reference period" has the meaning given by section 224 of the Companies Act 1985;
"called-up share capital" has the meaning given by section 737 of that Act;
"net assets" has the meaning given by section 264(2) of that Act;
"statutory accounts", in relation to a company, means accounts of the company prepared in respect of a period in accordance with the requirements of that Act, or with those requirements applied with such modifications as are necessary where that period is not an accounting reference period;
"undistributable reserves" has the meaning given by section 264(3) of that Act.

Dividends

7 (1) This paragraph applies where a distribution is proposed to be declared--

(a) during an accounting reference period of the transferee company which includes a transfer date; or

(b) before any accounts are laid or filed in respect of such a period.

(2) Sections 270 to 276 of the Companies Act 1985 (c. 6) (accounts relevant for determining whether a distribution may be made by a company) shall have effect as if--

(a) references in section 270 to the company's accounts and to accounts relevant under that section, and

(b) references in section 273 to initial accounts,

included references to such accounts as, on the assumptions stated in sub-paragraph (3), would have been prepared under section 226 of that Act in respect of the relevant year ("the relevant accounts").

(3) Those assumptions are--

(a) that the relevant year was a financial year of the transferee company;

(b) that the vesting of property, rights and liabilities in accordance with the relevant scheme was effected immediately after the beginning of that year;

(c) that so much of the relevant scheme as contains provision by or under which there is a determination of the value of an asset to which the company becomes entitled in accordance with the scheme has effect for determining the value of that asset for the purposes of the accounts in question;

(d) that so much of the relevant scheme as contains provision by or under which there is a determination of the amount of a liability to which the company becomes subject in accordance with the scheme has effect for determining the amount of that liability for the purposes of the accounts in question;

(e) that securities of the transferee company issued or allotted before the declaration of the distribution had been issued or allotted before the end of the relevant year; and

(f) such other assumptions as may appear to the directors of the transferee company to be necessary or expedient for the purposes of this paragraph.

(4) The relevant accounts shall not be regarded as statutory accounts for the purposes of paragraph 8 of Schedule 7.

(5) In this paragraph--

"accounting reference period" has the meaning given by section 224 of the Companies Act 1985;
"complete financial year" means a financial year ending with 31st March;
"distribution" has the same meaning as in Part 8 of the Companies Act 1985;
"the relevant year", in relation to a transfer date, means the last complete financial year ending before that date;
"a transfer date", in relation to the transferee company, means the date of the coming into force of the relevant scheme.

Saving for inherent powers of Ministers

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