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34 2009

National Asset Management Agency Act 2009

Chapter 2

Effects of Acquisition of Bank Assets

NAMA to have rights of creditors after acquisition of bank assets.

99 .— (1) After NAMA or a NAMA group entity acquires a bank asset, and subject to section 101 and any exclusion of obligations and liabilities from the acquisition set out in the acquisition schedule—

(a) NAMA and the NAMA group entity each have and may exercise all the rights and powers, and subject to this Act is bound by all of the obligations, of the participating institution from which the bank asset was acquired in relation to—

(i) the bank asset,

(ii) the debtor concerned and any guarantor, surety or other person concerned,

(iii) any receiver, liquidator, or examiner concerned, and

(iv) the Official Assignee in Bankruptcy,

and

(b) the participating institution ceases to have those rights and obligations except to any extent to which this Act provides otherwise.

(2) The reference in subsection (1) to the rights, powers or obligations of a participating institution in relation to a bank asset is a reference to the rights, powers or obligations, as the case may be—

(a) derived from the bank asset, and

(b) arising under any law or in equity or by way of contract.

(3) In particular, NAMA and the NAMA group entity may each—

(a) take any action, including court action, that the participating institution could have taken to protect, perfect or enforce any security, right, interest, obligation or liability,

(b) realise any security that the participating institution could have realised,

(c) call up any guarantee that the participating institution could have called up,

(d) participate to the same extent as the participating institution could have participated in any resolution, workout, restructuring, arrangement, reorganisation, scheme or insolvency proceeding in relation to the bank asset, and

(e) exercise any powers conferred by any document that forms part of the bank asset of reviewing or amending any term or condition of any part of the bank asset.

Exercise of certain rights of set-off.

100 .— (1) If a participating institution has a right to set off a claim owing by it to a debtor against a claim owing by the debtor to it in relation to a bank asset, and NAMA or a NAMA group entity acquires the bank asset, the right is taken to continue in existence as between the participating institution and the debtor as if the bank asset had not been acquired and—

(a) the participating institution shall inform NAMA in writing of the existence of the right,

(b) if NAMA so directs—

(i) the claims shall be set off as if they were mutual claims when and to the extent that the right of set-off would have become exercisable or would have arisen if there had been no acquisition, and

(ii) the claims shall be taken to have been discharged to the extent of that set-off,

and

(c) if the claims are so discharged, the participating institution shall, as soon as may be, pay an amount equal to the amount of the set-off to NAMA or the NAMA group entity concerned.

(2) If a debtor exercises, or is taken to have exercised, a set-off of a claim made by a participating institution against an acquired bank asset, the participating institution shall, as soon as may be, pay an amount equal to the amount of the set-off to NAMA or to the NAMA group entity concerned.

(3) In this section—

(a) a reference to a right of set-off includes a right of combination of accounts and any similar right, and

(b) a reference to a claim includes a direct or contingent obligation.

(4) Upon and following the acquisition of a bank asset from a participating institution by NAMA or a NAMA group entity, for the purposes only of the set-off pursuant to subsection (1) the claims shall be taken to be mutual for the purposes of paragraph 17(1) of the First Schedule to the Bankruptcy Act 1988 .

Enforcement of certain representations, etc.

101 .— (1) If in relation to a bank asset that NAMA or a NAMA group entity has acquired—

(a) it is alleged that a representation was made to, a consent was given to, an undertaking was given to, or any other obligation was undertaken (by agreement or otherwise) in favour of, the debtor or another person by the participating institution from which the bank asset was acquired or by some person acting or claiming to act on its behalf,

(b) no such representation, consent, undertaking or obligation was disclosed to NAMA in writing, before the service on the participating institution of the relevant acquisition schedule,

(c) the records of the participating institution do not contain a note or memorandum in writing of the terms of any such representation, consent, undertaking or obligation or do not contain a record of any consideration paid in relation to any such representation, undertaking or obligation, and

(d) the representation, consent, undertaking or obligation, if made, given or undertaken, would affect the creditor’s rights in relation to the bank asset,

then that representation, consent, undertaking or obligation—

(i) is not enforceable, and cannot be relied on, by the debtor or any other person against NAMA or the NAMA group entity,

(ii) is enforceable, and can be relied on, by the debtor or any other person, if at all, only against a person other than NAMA or a NAMA group entity, and

(iii) is not enforceable, and cannot be relied on, by NAMA or the NAMA group entity against the debtor.

(2) A claim based on a representation, consent, undertaking or obligation referred to in subsection (1) gives rise only to a remedy in damages or other relief that does not in any way affect the bank asset, its acquisition, or the interest of NAMA or the NAMA group entity or (for the avoidance of doubt) any property the subject of any security that is part of such a bank asset.

(3) The Court shall not make an order under section 182 in relation to a claim to enforce a representation, undertaking or obligation referred to in subsection (1).

Acquisition of bank assets not to affect conditions, etc.

102 .— (1) Subject to the provisions of this Act, after a bank asset is acquired by NAMA or a NAMA group entity, the terms and conditions of the bank asset are unchanged.

(2) Where the documentation for a credit facility forming part of a bank asset that has been acquired by NAMA or a NAMA group entity refers to a reference rate of interest that is set by the participating institution concerned but is no longer available, the documentation shall continue to be construed as though it referred to—

(a) that participating institution’s reference rate for credit facilities of that type, or

(b) at NAMA’s discretion, another reference rate specified by NAMA.

(3) Where by reason of the acquisition by NAMA or a NAMA group entity of a bank asset, compliance with, or the operation of, a term or condition of the bank asset is no longer, in the opinion of NAMA, reasonably practicable, NAMA may, by notice in writing, change that term or condition. The new term or condition shall be as nearly as possible equivalent to the original term or condition.

(4) For the avoidance of doubt, the acquisition by NAMA or a NAMA group entity of a bank asset under this Act does not affect any relief or remedy to which the participating institution would otherwise be entitled.

Acquisition of bank assets not to give rise to cause of action, etc.

103 .— No cause of action lies or is maintainable against NAMA or any NAMA group entity by reason solely of the acquisition of a bank asset by NAMA or a NAMA group entity.

NAMA to be notified of certain matters.

104 .— If within one year after NAMA or a NAMA group entity acquires a bank asset, the participating institution from which the bank asset was acquired is notified or becomes aware of any significant dealing, event or circumstance or significant proposed or potential dealing, event or circumstance in relation to the bank asset that would adversely affect the bank asset or the rights (including priority), obligations or liabilities of NAMA or the NAMA group entity in relation to it, the participating institution shall notify NAMA of the dealing, event or circumstance without delay.

Acquisition of bank assets not to render NAMA liable for wrongs by participating institutions.

105 .— (1) Nothing in this Act renders NAMA or a NAMA group entity liable for any breach of contract, misrepresentation, breach of duty, breach of trust or other legal or equitable wrong committed by a participating institution.

(2) No legal proceedings shall be brought against NAMA or a NAMA group entity in relation to any legal or equitable wrong referred to in subsection (1).

(3) Nothing in this Act deprives any person of a remedy in damages against a participating institution in relation to a legal or equitable wrong referred to in subsection (1).

Rights of others not affected by acquisition of bank assets, etc.

106 .— Nothing in this Act relieves NAMA or a NAMA group entity of any obligation, at law or in equity, except to any extent to which this Act specifically provides otherwise.

NAMA not required to register certain instruments, etc.

107 .— (1) Where a bank asset has been acquired by NAMA or a NAMA group entity—

(a) notwithstanding anything in any Act listed in subsection (2) or any other Act that provides for the registration of assets, security or details of them, NAMA or the NAMA group entity is not required to become registered as owner of any security that is part of the bank asset,

(b) notwithstanding sections 62 and 64 of the Registration of Title Act 1964 , NAMA or the NAMA group entity has, in relation to any such charge, the powers of a mortgagee under a mortgage by deed, even though NAMA or the NAMA group entity is not registered as owner of any such charge,

(c) NAMA or the NAMA group entity has the powers and rights conferred on the registered owner of a charge by the Registration of Title Act 1964 .

(2) The Acts referred to subsection (1) (a) are the following:

(a) the Bills of Sale (Ireland) Acts 1879 and 1883;

(b) the Industrial and Commercial Property (Protection) Act 1927 ;

(c) the Companies Act 1963 ;

(d) the Registration of Deeds and Title Acts 1964 and 2006;

(e) the Agricultural Credit Act 1978 ;

(f) the Patents Act 1992 ;

(g) the Trade Marks Act 1996 ;

(h) the Taxes Consolidation Act 1997 .

(3) For the purposes of an Act referred to in subsection (1) (a), an acquisition schedule has effect in relation to a bank asset as a deed registered on the date of acquisition of the bank asset concerned.

(4) For the purposes of an Act referred to in subsection (1) (a), the registration in relation to an acquired bank asset of a participating institution has effect for all purposes as a registration of NAMA or the NAMA group entity concerned.

(5) Nothing in this section prevents NAMA or a NAMA group entity from registering any interest capable of registration.

(6) Nothing in this section has the effect of relieving NAMA or a NAMA group entity from any obligation under a relevant foreign law.

(7) Sections 23 and 25 of the Registration of Title Act 1964 do not apply to NAMA or a NAMA group entity.

(8) Where a NAMA group entity acquires a bank asset from NAMA or another NAMA group entity, the provisions of this section also apply to the first-mentioned NAMA group entity.

NAMA, etc., may give certificates in relation to bank assets held.

108 .— (1) NAMA or a NAMA group entity may certify under its seal or common seal, as the case requires, that NAMA or the NAMA group entity holds a bank asset specified in the certificate.

(2) A document purporting to be a certificate issued in accordance with subsection (1)

(a) shall be taken to be such a certificate, and to have been certified under the seal of NAMA or the NAMA group entity, as the case may be, unless the contrary is proved, and

(b) is conclusive as to the matters set out in it.

NAMA, etc., may give certain directions in relation to bank assets.

109 .— (1) This section applies, without prejudice to any other provision of this Act or any right arising at law, to a bank asset that NAMA or a NAMA group entity has acquired, the terms and conditions of which entitle the participating institution from which NAMA or the NAMA group entity acquired it to give directions to a third party that holds an interest in the bank asset on behalf of others.

(2) In relation to a bank asset to which or in relation to which this section applies—

(a) NAMA or a NAMA group entity may give directions to the third party concerned to realise any security, enforce any guarantee or surety or do any other act or thing in relation to the bank asset, or

(b) if the third party is not incorporated in the State, but is a subsidiary of an entity that is incorporated in the State, NAMA or a NAMA group entity may direct the entity concerned to secure compliance by the subsidiary with a direction to do any of the things mentioned in paragraph (a).

(3) Where a direction is given under subsection (2) (a), then the third party shall be under an equivalent obligation to comply with the direction as if the direction had been given by the participating institution from which the bank asset concerned was acquired.

(4) Where a direction is given under subsection (2) (b), then the entity shall be under an obligation to secure the compliance of the subsidiary but only to the extent that the subsidiary would be bound to comply with a direction given under paragraph (a) of subsection (2) if the subsidiary were incorporated in the State.

Effect of acquisition of bank assets on certain other rights.

110 .— (1) In this section “ relevant instrument ” means an agreement, licence, document, security, obligation or other instrument (other than the Credit Institutions (Financial Support) Scheme 2008 (S.I. No. 411 of 2008)) (or an instrument entered into under that Scheme) to which any of the following is a party or by which any of the following is bound or in which any of the following has an interest:

(a) a participating institution;

(b) a subsidiary of such an institution;

(c) any body corporate in which a participating institution or any of its subsidiaries has any interest.

(2) Any provision in a relevant instrument that would (apart from this subsection) cause any of the consequences specified in subsection (3) to follow by virtue of—

(a) the enactment of this Act,

(b) any entity becoming a participating institution,

(c) the provision of any information to NAMA by an applicant credit institution or a participating institution pursuant to this Act,

(d) the acquisition of a bank asset by NAMA or a NAMA group entity under this Act,

(e) any disposition by NAMA or a NAMA group entity of any acquired bank asset, or

(f) any other thing done or authorised to be done under, pursuant to or resulting from any provision of this Act,

is of no effect, without the express consent of NAMA, except to any extent to which the Minister provides otherwise by order under section 111 .

(3) The consequences referred to in subsection (2) are the following:

(a) the creation of an obligation;

(b) the suspension or extinction (however described, and whether in whole or in part) of a right or an obligation or the becoming subject to a right or an obligation;

(c) the termination of the relevant instrument concerned or a right or obligation under it;

(d) a right becoming exercisable to terminate or modify the relevant instrument or a right or obligation under it;

(e) an amount becoming due and payable or capable of being declared due and payable;

(f) any other change in the amount or timing of any payment falling to be made or due to be received by any person;

(g) a right becoming exercisable to withhold, net or set off any payment;

(h) the occurrence of an event giving rise to a default or breach of a right or obligation;

(i) a right becoming exercisable not to advance any amount;

(j) an obligation arising to provide or transfer a deposit or collateral;

(k) a right of transfer or assignment of the asset that is stated to be exercisable only once or for a limited number of times;

(l) a right to enforce a guarantee, indemnity or security interest (however described);

(m) the triggering of any mandatory prepayment;

(n) any obligation to return collateral or its equivalent;

(o) the cancellation of any obligation to advance any amount or to provide credit or a contingent instrument;

(p) legal proceedings becoming maintainable to enforce the relevant instrument, to any extent that such proceedings would not have been maintainable had the bank asset not been acquired or had any other thing done or matter arising by virtue of or in connection with this Act not been done or not arisen, as the case may be;

(q) any other right or remedy (whether or not similar in kind to those referred to in paragraphs (a) to (o)) arising or becoming exercisable;

(r) the termination or modification of an obligation to provide a service or product.

(4) In making an order referred to in subsection (2), the Minister shall have regard to—

(a) the consequences specified in subsection (3) so far as they are relevant,

(b) the matters set out in subsection (2), and

(c) the likely impact of the proposed order on any of the matters specified in section 2 , and on NAMA’s ability to perform its functions under this Act.

Minister’s power to modify application of section 110 .

111 .— (1) In this section “ relevant instrument” has the same meaning as in section 110 .

(2) If the Minister is satisfied that in the special circumstances of—

(a) a particular case, or

(b) a particular class of cases,

the effect of section 110 would be unduly onerous or would cause undue unfairness or undue hardship, and that it is appropriate in all the circumstances to do so, he or she may by order provide that, notwithstanding anything in that section, a provision in a relevant instrument that provides for a consequence mentioned or referred to in that section has effect to the extent specified in the order.

(3) An order under subsection (2)

(a) may make provision in relation to the effect of a provision—

(i) in a particular relevant instrument,

(ii) in relevant instruments of a particular class,

(iii) on rights held under a relevant instrument by—

(I) a particular person, or

(II) a particular class of person,

or

(iv) on rights held under relevant instruments of a particular class by—

(I) a particular person, or

(II) a particular class of person,

(b) in the case of an order that makes provision in relation to relevant instruments of a particular class, may specify the class by reference to any common characteristic of the instruments concerned,

(c) in the case of an order that makes provision in relation to rights held by a particular class of persons, may specify the class by reference to any common characteristic of the persons concerned, and

(d) may be expressed to have retrospective effect to a date falling after 30 July 2009.

(4) If the Minister considers that an order under subsection (2) contains matter that is commercially sensitive, he or she may direct—

(a) that the obligations in relation to the order under section 3(1) of the Statutory Instruments Act 1947 are to be taken to be satisfied by the printing, sending to the institutions mentioned in section 3(1)(a) of that Act, publication and sale of a version of the order from which the commercially sensitive matter is omitted, or

(b) if the preparation of such a version would be impracticable, or would result in the version being seriously misleading, that the order is exempt from the operation of section 3(1) of that Act.

(5) A version of an order prepared in accordance with a direction given by the Minister under subsection (4) (a) shall indicate that matter has been omitted from the version of the order and the general nature of that matter.

(6) A direction given by the Minister under subsection (4) shall be published in Iris Oifigiúil as soon as practicable.

(7) Evidence of a direction given by the Minister under subsection (4) may be given by the production of a copy of Iris Oifigiúil purporting to contain the direction.