Office of Public Sector Information
PART I continued
(1) The Franchising Director may form companies for the purpose of facilitating the performance of any functions assigned or transferred to him under or by virtue of this Act.
(2) The Franchising Director may—
(a) hold interests in any company which he forms as mentioned in subsection (1) above;
(b) exercise rights conferred by the holding of interests in any such company; and
(c) provide financial or other assistance to or in respect of any such company, including assistance by way of guarantee of its obligations.
(3) The Franchising Director may (whether by exercising his powers to make a transfer scheme or otherwise and whether or not for any consideration) acquire or dispose of any property, rights or liabilities which have been, or which are intended to be,—
(a) designated as franchise assets by or under any franchise agreement,
(b) used for the purpose of providing franchised services,
(c) used for the purpose of operating any additional railway asset under a franchise agreement, or
(d) used for the purpose of providing any services, or operating any additional railway asset, in pursuance of a duty or power to secure the provision of such services or the operation of such an additional railway asset.
(4) Any sums required by the Franchising Director for making payments in consequence of the exercise of any such powers as are mentioned in this section shall be paid by the Secretary of State out of money provided by Parliament.
(5) Any sums received by the Franchising Director in consequence of the exercise of any such powers as are mentioned in this section shall be paid into the Consolidated Fund.
(1) The Franchising Director or a Passenger Transport Authority or Passenger Transport Executive—
(a) in exercising or deciding whether or not to exercise any of his, or (as the case may be) their, franchising functions, may take into account the desirability of encouraging railway investment; and
(b) may exercise any such functions for the purpose of encouraging railway investment or for purposes which include that purpose.
(2) The Franchising Director may, for the purpose of encouraging railway investment, enter into agreements with any person under which the Franchising Director undertakes to exercise franchising functions of his, to refrain from exercising such functions, or to exercise such functions in a particular manner.
(3) In this section—
“franchising functions”, in relation to the Franchising Director, means—
any functions of his under sections 17 to 19, 23, 24, 26 to 35, 52 and 53(3) above;
any power conferred on him under or by virtue of Part II below with respect to the effecting by transfer scheme of any transfer contemplated by any provision of those sections; and
any other functions of his which relate to the provision of railway passenger services, or the operation of additional railway assets, under or by virtue of franchise agreements;
“franchising functions”, in relation to a Passenger Transport Authority or Passenger Transport Executive, means any functions conferred or imposed on the Authority or, as the case may be, the Executive under or by virtue of section 34 above;
“railway investment” means investment in assets for use in the provision of railway services.
(1) Subject to subsections (2) to (5) and section 56 below, where the appropriate officer is satisfied that a relevant operator is contravening, or is likely to contravene, any relevant condition or requirement, he shall by a final order make such provision as is requisite for the purpose of securing compliance with that condition or requirement.
(2) Subject to subsection (5) below, where it appears to the appropriate officer—
(a) that a relevant operator is contravening, or is likely to contravene, any relevant condition or requirement, and
(b) that it is requisite that a provisional order be made,
he shall (instead of taking steps towards the making of a final order) by a provisional order make such provision as appears to him requisite for the purpose of securing compliance with that condition or requirement.
(3) In determining for the purposes of subsection (2)(b) above whether it is requisite that a provisional order be made, the appropriate officer shall have regard, in particular, to the extent to which any person is likely to sustain loss or damage in consequence of anything which, in contravention of the relevant condition or requirement, is likely to be done, or omitted to be done, before a final order may be made.
(4) Subject to subsection (5) and section 56 below, the appropriate officer shall confirm a provisional order, with or without modifications, if—
(a) he is satisfied that the relevant operator to whom the order relates is contravening, or is likely to contravene, any relevant condition or requirement; and
(b) the provision made by the order (with any modifications) is requisite for the purpose of securing compliance with that condition or requirement.
(5) The appropriate officer shall not make a final order, or make or confirm a provisional order, in relation to a relevant operator if he is satisfied—
(a) that the duties imposed on him by section 4 or, as the case may be, section 5 above preclude the making or, as the case may be, the confirmation of the order;
(b) that the relevant operator has agreed to take, and is taking, all such steps as it appears to the appropriate officer for the time being to be appropriate for the relevant operator to take for the purpose of securing or facilitating compliance with the condition or requirement in question; or
(c) that the contraventions were, or the apprehended contraventions are, of a trivial nature.
(6) Where the appropriate officer is satisfied as mentioned in subsection (5) above, he shall—
(a) serve notice that he is so satisfied on the relevant operator; and
(b) publish the notice in such manner as he considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them.
(7) A final or provisional order—
(a) shall require the relevant operator to whom it relates (according to the circumstances of the case) to do, or not to do, such things as are specified in the order or are of a description so specified;
(b) shall take effect at such time, being the earliest practicable time, as is determined by or under the order; and
(c) may be revoked at any time by the appropriate officer.
(8) Without prejudice to the generality of the power conferred by subsection (1) above, the provision that may be made in a final order includes, in particular, the imposition by the appropriate officer on the relevant operator to whom the order relates of a requirement to pay to the appropriate officer a monetary penalty of such amount as may be appropriate, in all the circumstances of the case, in respect of the contravention in question.
(9) Without prejudice to section 50 above, nothing in this section or in sections 56 to 58 below shall exclude the availability of any remedy in respect of any contravention or apprehended contravention of a relevant condition or requirement.
(10) In this Part—
“the appropriate officer” means—
in relation to any relevant condition or requirement in the case of a licence holder or a person under closure restrictions, the Regulator;
in relation to any relevant condition or requirement in the case of a franchisee or a franchise operator, the Franchising Director;
“final order” means an order under this section, other than a provisional order;
“provisional order” means an order under this section which, if not previously confirmed in accordance with subsection (4) above, will cease to have effect at the end of such period (not exceeding three months) as is determined by or under the order;
“relevant condition or requirement” means—
in the case of a licence holder, any condition of his licence;
in the case of a franchisee, or any franchise operator who is a party to the franchise agreement, any term of the franchise agreement;
in the case of a person under closure restrictions—
the duty under section 37(1), 39(1) or 41(1) above not to discontinue a railway passenger service, or the operation of the whole or any part of a network, station or light maintenance depot, before the date stated by him in accordance with section 37(3), 39(4) or 41(3) above; and
the duty under section 48(3) above not to discontinue an experimental passenger service before the expiry of the notice period;
“relevant operator” means any licence holder, franchisee, franchise operator who is a party to the franchise agreement or person under closure restrictions.
(11) In subsection (10) above, “person under closure restrictions” means a person—
(a) who proposes a closure in circumstances such that he is required by any provision of this Part to give notice of the proposal to the Franchising Director; or
(b) who proposes to discontinue an experimental passenger service in circumstances such that he is required by section 48 above to give due notice of the proposal.
(12) Any sums received by the appropriate officer by way of monetary penalty under this section shall be paid into the Consolidated Fund.
(1) Before he makes a final order or confirms a provisional order, the appropriate officer shall give notice—
(a) stating that he proposes to make or confirm the order and setting out its effect,
(b) setting out—
(i) the relevant condition or requirement for the purpose of securing compliance with which the order is to be made or confirmed,
(ii) the acts or omissions which, in his opinion, constitute or would constitute contraventions of that condition or requirement, and
(iii) the other facts which, in his opinion, justify the making or confirmation of the order, and
(c) specifying the period (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed order or proposed confirmation may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(2) A notice under subsection (1) above shall be given—
(a) by publishing the notice in such manner as the appropriate officer considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them; and
(b) by serving a copy of the notice, and a copy of the proposed order or of the order proposed to be confirmed, on the relevant operator to whom the order relates.
(3) The appropriate officer shall not make a final order with modifications, or confirm a provisional order with modifications, except—
(a) with the consent to the modifications of the relevant operator to whom the order relates; or
(b) after complying with the requirements of subsection (4) below.
(4) The requirements mentioned in subsection (3) above are that the appropriate officer shall—
(a) serve on the relevant operator to whom the order relates such notice as appears to him requisite of his proposal to make or confirm the order with modifications;
(b) in that notice specify the period (not being less than 28 days from the date of service of the notice) within which representations or objections with respect to the proposed modifications may be made; and
(c) consider any representations or objections which are duly made and not withdrawn.
(5) As soon as practicable after making a final order or making or confirming a provisional order, the appropriate officer shall—
(a) serve a copy of the order on the relevant operator to whom the order relates; and
(b) publish the order in such manner as he considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.
(6) Before revoking a final order or a provisional order which has been confirmed, the appropriate officer shall give notice—
(a) stating that he proposes to revoke the order and setting out the effect of its revocation, and
(b) specifying the period (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed revocation may be made,
and shall consider any representations or objections which are duly made and not withdrawn.
(7) If, after giving notice under subsection (6) above, the appropriate officer decides not to revoke the order to which the notice relates, he shall give notice of his decision.
(8) A notice under subsection (6) or (7) above shall be given—
(a) by publishing the notice in such manner as the appropriate officer considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by them; and
(b) by serving a copy of the notice on the relevant operator to whom the order relates.
(1) If the relevant operator to whom a final or provisional order relates is aggrieved by the order and desires to question its validity on the ground—
(a) that its making or confirmation was not within the powers of section 55 above, or
(b) that any of the requirements of section 56 above have not been complied with in relation to it,
he may, within 42 days from the date of service on him of a copy of the order, make an application to the court under this section.
(2) On any such application the court, if satisfied that the making or confirmation of the order was not within those powers or that the interests of the relevant operator have been substantially prejudiced by a failure to comply with those requirements—
(a) may quash the order or any provision of the order; or
(b) if and to the extent that the application related to so much of an order as imposes a monetary penalty, may substitute a monetary penalty of such lesser amount as the court considers appropriate in all the circumstances of the case.
(3) Except as provided by this section, the validity of a final or provisional order shall not be questioned by any legal proceedings whatever.
(4) The obligation to comply with a final or provisional order shall be a duty owed to any person who may be affected by a contravention of the order.
(5) Where a duty is owed by virtue of subsection (4) above to any person, any breach of the duty which causes that person to sustain loss or damage shall be actionable at the suit or instance of that person.
(6) In any proceedings brought against a relevant operator in pursuance of subsection (5) above, it shall be a defence for him to prove that he took all reasonable steps and exercised all due diligence to avoid contravening the order.
(7) Without prejudice to any right which any person may have by virtue of subsection (5) above to bring civil proceedings in respect of any contravention or apprehended contravention of a final or provisional order, compliance with any such order shall be enforceable by civil proceedings by the appropriate officer for an injunction or for interdict or for any other appropriate relief or remedy.
(8) Where a relevant operator to whom a final or provisional order relates has made an application pursuant to subsection (1) above questioning the validity of that order, the making of that application shall not affect—
(a) his obligation to comply with the order, or
(b) the right which any person may have to bring civil proceedings against him in pursuance of subsection (5) or (7) above.
(9) In this section and section 58 below “the court” means the High Court in relation to England and Wales and the Court of Session in relation to Scotland.
(1) Where it appears to the appropriate officer that a relevant operator may be contravening, or may have contravened, any relevant condition or requirement, the appropriate officer may, for any purpose connected with such of his functions under section 55 above as are exercisable in relation to that matter, serve a notice under subsection (2) below on any person.
(2) A notice under this subsection is a notice signed by the appropriate officer and—
(a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the appropriate officer or to any person appointed by the appropriate officer for the purpose, any documents which are specified or described in the notice and are in that person’s custody or under his control; or
(b) requiring that person, if he is carrying on a business, to furnish, at a time and place and in the form and manner specified in the notice, to the appropriate officer such information as may be specified or described in the notice.
(3) No person shall be required under this section to produce any documents which he could not be compelled to produce in civil proceedings in the court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in any such proceedings.
(4) A person who without reasonable excuse fails to do anything required of him by notice under subsection (2) above is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(5) A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subsection (2) above to produce is guilty of an offence and shall be liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.
(6) If a person makes default in complying with a notice under subsection (2) above, the court may, on the application of the appropriate officer, make such order as the court thinks fit for requiring the default to be made good; and any such order may provide that all the costs or expenses of and incidental to the application shall be borne by the person in default or by any officers of a company or other association who are responsible for its default.
(7) Any reference in this section to the production of a document includes a reference to the production of a legible and intelligible copy of information recorded otherwise than in legible form; and the reference to suppressing a document includes a reference to destroying the means of reproducing information recorded otherwise than in legible form.
(1) A “railway administration order” is an order of the court made in accordance with section 60, 61 or 62 below in relation to a protected railway company and directing that, during the period for which the order is in force, the affairs, business and property of the company shall be managed, by a person appointed by the court,—
(a) for the achievement of the purposes of such an order; and
(b) in a manner which protects the respective interests of the members and creditors of the company.
(2) The purposes of a railway administration order made in relation to any company shall be—
(a) the transfer to another company, or (as respects different parts of its undertaking) to two or more different companies, as a going concern, of so much of the company’s undertaking as it is necessary to transfer in order to ensure that the relevant activities may be properly carried on; and
(b) the carrying on of those relevant activities pending the making of the transfer.
(3) Schedule 6 to this Act shall have effect for applying provisions of the [1986 c. 45.] Insolvency Act 1986 where a railway administration order is made.
(4) Schedule 7 to this Act shall have effect for enabling provision to be made with respect to cases in which, in pursuance of a railway administration order, another company is to carry on all or any of the relevant activities of a protected railway company in place of that company.
(5) Without prejudice to paragraph 20 of Schedule 6 to this Act, the power conferred by section 411 of the [1986 c. 45.] Insolvency Act 1986 to make rules shall apply for the purpose of giving effect to the railway administration order provisions of this Act as it applies for the purpose of giving effect to Parts I to VII of that Act, but taking any reference in that section to those Parts as a reference to those provisions.
(6) For the purposes of this Part—
(a) “protected railway company” means a company which is both a private sector operator and the holder of—
(i) a passenger licence; or
(ii) a network licence, a station licence or a light maintenance depot licence; and
(b) the “relevant activities”, in relation to a protected railway company, are—
(i) in the case of a company which is the holder of a passenger licence, the carriage of passengers by railway; or
(ii) in the case of a company which is the holder of a network licence, a station licence or a light maintenance depot licence, the management of a network, a station or a light maintenance depot, according to the description of licence in question.
(7) In this section—
“business” and “property” have the same meaning as they have in the [1986 c. 45.] Insolvency Act 1986;
“the court”, in the case of any protected railway company, means the court having jurisdiction to wind up the company;
“the railway administration order provisions of this Act” means this section, sections 60 to 65 below and Schedules 6 and 7 to this Act.
(1) If, on an application made to the court by petition presented—
(a) by the Secretary of State, or
(b) if the petition relates to a protected railway company which is the holder of a passenger licence, by the Franchising Director with the consent of the Secretary of State,
the court is satisfied that either or both of the grounds specified in subsection (2) below is satisfied in relation to that protected railway company, the court may make a railway administration order in relation to that company.
(2) The grounds mentioned in subsection (1) above are, in relation to any company,—
(a) that the company is or is likely to be unable to pay its debts;
(b) that, in a case in which the Secretary of State has certified that it would be appropriate for him to petition for the winding up of the company under section 124A of the 1986 Act (petition by the Secretary of State following inspectors' report etc), it would be just and equitable, as mentioned in that section, for the company to be wound up.
(3) Notice of any petition under this section for a railway administration order shall be given forthwith to such persons and in such manner as may be prescribed by rules made under section 411 of the 1986 Act; and no such petition shall be withdrawn except with the leave of the court.
(4) Subsections (4) and (5) of section 9 of the 1986 Act (powers on application for administration order) shall apply on the hearing of the petition for a railway administration order in relation to any company as they apply on the hearing of a petition for an administration order.
(5) Subsections (1), (2), (4) and (5) of section 10 of the 1986 Act (effect of petition) shall apply in the case of a petition for a railway administration order in relation to any company as if—
(a) the reference in subsection (1) to an administration order were a reference to a railway administration order;
(b) paragraph (b) of that subsection did require the leave of the court for the taking of any of the steps mentioned in paragraphs (b) and (c) of subsection (2) (appointment of, and exercise of functions by, administrative receiver); and
(c) the reference in paragraph (c) of subsection (1) to proceedings included a reference to any proceedings under or for the purposes of section 55 above.
(6) For the purposes of this section a company is unable to pay its debts if—
(a) it is a company which is deemed to be so unable under section 123 of the 1986 Act (definition of inability to pay debts); or
(b) it is an unregistered company, within the meaning of Part V of the 1986 Act, which is deemed, by virtue of any of sections 222 to 224 of that Act, to be so unable for the purposes of section 221 of that Act (winding up of unregistered companies).
(7) In this section—
“the 1986 Act” means the [1986 c. 45.] Insolvency Act 1986;
“the court” has the same meaning as in section 59 above.
(1) Where a petition for the winding up of a protected railway company is presented by a person other than the Secretary of State, the court shall not make a winding-up order in relation to that company on that petition unless—
(a) notice of the petition has been served on—
(i) the Secretary of State; and
(ii) the Franchising Director, if the protected railway company is the holder of a passenger licence; and
(b) a period of at least fourteen days has elapsed since the service of that notice.
(2) Where a petition for the winding up of a protected railway company has been presented—
(a) the Secretary of State, or
(b) if the company is the holder of a passenger licence, the Franchising Director with the consent of the Secretary of State,
may, at any time before a winding-up order is made on the petition, make an application to the court for a railway administration order in relation to that company; and where such an application is made the court may, if it is satisfied as mentioned in section 60(1) above, make a railway administration order instead of a winding-up order.
(3) Where, on a petition for the winding up of a protected railway company, the court makes, or proposes to make, a railway administration order by virtue of subsection (2) above, subsections (4) and (5) of section 9 of the [1986 c. 45.] Insolvency Act 1986 (powers on application for administration order) shall apply on the hearing of that petition as they apply on the hearing of a petition for an administration order.
(4) In this section “the court” has the same meaning as in section 59 above.
(1) No resolution for voluntary winding up shall be passed by a protected railway company without leave of the court granted on an application made for the purpose by the company.
(2) No such leave shall be granted unless—
(a) notice of the application has been served on—
(i) the Secretary of State; and
(ii) the Franchising Director, if the protected railway company is the holder of a passenger licence; and
(b) a period of at least fourteen days has elapsed since the service of that notice.
(3) Where an application for leave under subsection (1) above has been made by a protected railway company—
(a) the Secretary of State, or
(b) if the company is the holder of a passenger licence, the Franchising Director with the consent of the Secretary of State,
may, at any time before leave has been granted under subsection (1) above, make an application to the court for a railway administration order in relation to that company; and where such an application is made the court may, if it is satisfied as mentioned in section 60(1) above, make a railway administration order instead of granting leave under subsection (1) above.
(4) Where, on an application for leave under subsection (1) above, the court makes, or proposes to make, a railway administration order by virtue of subsection (3) above, subsections (4) and (5) of section 9 of the [1986 c. 45.] Insolvency Act 1986 (powers on application for administration order) shall apply on the hearing of that application as they apply on the hearing of a petition for an administration order.
(5) No administration order under Part II of the [1986 c. 45.] Insolvency Act 1986 shall be made in relation to a protected railway company unless—
(a) notice of the application for the order has been served on—
(i) the Secretary of State; and
(ii) the Franchising Director, if the protected railway company is the holder of a passenger licence; and
(b) a period of at least fourteen days has elapsed since the service of that notice.
(6) Where an application for an administration order under Part II of the [1986 c. 45.] Insolvency Act 1986 has been made in the case of a protected railway company—
(a) the Secretary of State, or
(b) if the company is the holder of a passenger licence, the Franchising Director with the consent of the Secretary of State,
may, at any time before such an order has been made on that application, make an application to the court for a railway administration order in relation to that company; and where such an application is made the court may, if it is satisfied as mentioned in section 60(1) above, make a railway administration order instead of an administration order under Part II of the [1986 c. 45.] Insolvency Act 1986.
(7) No step shall be taken by any person to enforce any security over a protected railway company’s property, except where that person has served fourteen days' notice of his intention to take that step on—
(a) the Secretary of State; and
(b) the Franchising Director, if the company is the holder of a passenger licence.
(8) In this section—
“the court” has the same meaning as in section 59 above;
“resolution for voluntary winding up” has the same meaning as in the [1986 c. 45.] Insolvency Act 1986;
“security” and “property” have the same meaning as in the [1986 c. 45.] Insolvency Act 1986.
(1) Where a railway administration order is for the time being in force in relation to a company, the Secretary of State may, with the consent of the Treasury—
(a) make to the company grants or loans of such sums as appear to him to be appropriate for the purpose of facilitating the achievement of the purposes of the order;
(b) agree to indemnify the person appointed to achieve the purposes of the order in respect of liabilities incurred and loss or damage sustained by that person in connection with the carrying out of his functions under the order.
(2) The Secretary of State may, with the consent of the Treasury, guarantee, in such manner and on such conditions as he may think fit, the repayment of the principal of, the payment of interest on and the discharge of any other financial obligation in connection with any sum which is borrowed from any person by a company in relation to which a railway administration order is in force at the time when the guarantee is given.
(3) Without prejudice to any provision applied in relation to the company by Schedule 6 to this Act—
(a) the terms and conditions on which a grant is made to any company under this section may require the whole or a part of the grant to be repaid to the Secretary of State if there is a contravention of the other terms and conditions on which the grant is made; and
(b) any loans which the Secretary of State makes to a company under this section shall be repaid to him at such times and by such methods, and interest on the loans shall be paid to him at such rates and at such times, as he may, with the consent of the Treasury, from time to time direct.
(4) Any grant or loan made under this section and any sums required to be paid by the Secretary of State in respect of an indemnity given under this section shall be paid out of money provided by Parliament.
(5) Any sums received under subsection (3) above by the Secretary of State shall be paid into the Consolidated Fund.
Railways Act 1993