Commonwealth Consolidated Acts

BANKING ACT 1959 - SECT 11CD

             (1)  This section applies if an ADI, authorised NOHC or subsidiary of an ADI or authorised NOHC is party to a contract, whether the proper law of the contract is Australian law (including the law of a State or Territory) or law of a foreign country (including the law of part of a foreign country).

          (1A)  The fact that the ADI or authorised NOHC is subject to a direction by APRA under Subdivision A or B does not allow the contract, or a party to the contract, other than the ADI, NOHC or subsidiary, to do any of the following:

                     (a)  deny any obligations under that contract;

                     (b)  accelerate any debt under that contract;

                     (c)  close out any transaction relating to that contract.

This subsection has effect subject to subsections (2) and (3).

             (2)  If the ADI, NOHC or subsidiary is prevented from fulfilling its obligations under the contract because of a direction under Subdivision A, other than a direction under paragraph 11CA(2)(m), the other party or parties to the contract are, subject to any orders made under subsection (3), relieved from obligations owed to the ADI or authorised NOHC under the contract.

             (3)  A party to a contract to which subsection (2) applies may apply to the Federal Court of Australia for an order relating to the effect on the contract of a direction under Subdivision A. The order may deal with matters including (but not limited to):

                     (a)  requiring a party to the contract to fulfil an obligation under the contract despite subsection (2);

                     (b)  obliging a party to the contract to take some other action (for example, paying money or transferring property) in view of obligations that were fulfilled under the contract before the direction was made.

The order must not require a person to take action that would contravene the direction, or any other direction under Subdivision A.