Revised Laws of Saint Lucia (2023)

PART IIA
SPECIAL EMERGENCY POWERS OF BANK

5A.

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   (1)   In this Part, the expression—

“affiliated institution”, in relation to a financial institution, means a company which is or has at any relevant time been—

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   (a)     a holding company or a subsidiary of the financial institution;

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   (b)     a subsidiary of a holding company of the financial institution;

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   (c)     a holding company of a subsidiary of the financial institution; or

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   (d)     a holding company of a holding company or a subsidiary of a subsidiary of the financial institution;

“agent” in relation to a financial institution, includes its bankers and any persons, whether officers of the financial institution or not, who are employed as its auditors, but does not include its legal advisers;

“claim” means any claim whatsoever without limitation, including claims which are secured or unsecured, present or future, actual, prospective or contingent, or arising out of contract, tort, bailment, restitution, breach of trust or any other cause of action, and whether or not made by a creditor, shareholder, depositor or any other person; (Inserted by S.I. 69/2013)

“creditor” means a person having a claim against or in respect of a financial institution or its property or assets; (Inserted by S.I. 69/2013)

“directors” includes any category of persons performing the functions of directors or analogous functions;

“financial institution” means a financial institution within the meaning of the Banking Act;

“holding company” and “subsidiary” have the meanings assigned to them in the Companies Act, Chapter 335;

“officer” in relation to a financial institution, includes any category of manager as well as any person in the employment of the financial institution;

“secured creditor” means a creditor who—

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   (a)     has a mortgage in respect of any property of a financial institution;

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   (b)     has a fixed or floating charge, a lien or any other security interest whatsoever without limitation in or over or in respect of any property or assets of a financial institution; or

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   (c)     is a party to an agreement designed to create the economic equivalent of a security interest;

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   (Inserted by S.I. 69/2013)

“security agreement” means any agreement creating a security interest or making a creditor a secured creditor; (Inserted by S.I. 69/2013)

“security interest” means any interest in or charge upon any property of a financial institution by way of mortgage, assignment, bond, lien, pledge or other means, that is created or is taken to secure the payment of a debt or the performance of any other obligation of the financial institution. (Inserted by S.I. 69/2013)

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   (2)  In this Part a reference to a director, officer or agent of a financial institution includes a reference to a person who has been but is no longer a director, officer or agent thereof.

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   (Inserted by S.I. 45/1993)

5B.

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   (1)   Where the Bank is of the opinion—

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      (a)     that the interests of depositors or creditors of a financial institution are threatened;

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      (b)     that a financial institution is likely to become unable to meet its obligations or is about to suspend or has suspended payment to its creditors or depositors; or

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      (c)     that a financial institution is not maintaining high standards of financial probity or sound business practices,

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   the Bank shall, in addition to any other powers conferred on it by any other law and notwithstanding the provisions of any other law to the contrary, have power —

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      (i)     to such extent as it thinks fit, to assume control of and carry on the affairs of the financial institution and, if necessary, to take over the property and undertaking of the financial institution and in so doing apply the provisions under Part IX and sections 186, 187 and 188 of the Banking Act;

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      (ii)     to take all steps it considers necessary to protect the interests, and to preserve the rights of depositors of the financial institution;

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      (iii)     to restructure the business or undertaking of the financial institution or to reconstruct its capital base;

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      (iv)     to provide such financial assistance to the financial institution as it considers necessary to prevent the collapse of the financial institution;

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      (v)     to acquire or sell or otherwise deal with the property, assets and undertaking of or any shareholding in the financial institution, at a price to be determined by an independent valuer;

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      (vi)     to appoint such persons and to establish such companies or corporations as it considers necessary to assist in the performance of the functions conferred by sub-paragraphs (i) to (v) and the provisions of Article 50 shall apply to such persons, companies or corporations.

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   (Substituted by S.I. 16/2017)

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   (2)   The powers of the Bank under paragraph (1) shall not be exercised unless the Bank is also of the opinion that the financial system of any of the territories of Participating Governments is in danger of disruption, substantial damage, injury or impairment as a result of the circumstances giving rise to the exercise of such powers.

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   (3)  Pursuant but without prejudice to its powers under subsection (1), and notwithstanding the provisions of any other law, the Bank may appoint any person or persons to act as Receiver or Manager and such appointment shall take effect as though made by the depositors and other creditors of the Company pursuant to a charge over all the fixed and floating assets of the institution and without prejudice to any other powers vested in such Receiver or Manager, the Receiver or Manager shall have power—

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      (a)     to take possession of, collect and get in any property of the institution and for that purpose to take any proceedings in the name of the institution or otherwise as may seem expedient;

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      (b)     to carry on, manage or concur in carrying on and managing the business of the institution or any part thereof and for any of those purposes to raise or borrow any money that may be required on the security of the whole or any part of the property of the institution;

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      (c)     forthwith to sell or concur in selling (but where necessary with leave of the Court) and to let or concur in letting and to accept surrenders of leases or tenancies of all or any of the property of the institution and to carry any such sale, letting or surrender into effect by conveying, leasing, letting or accepting surrenders in the name and on behalf of the institution; and any such sale may be for cash, debentures, other obligations, shares, stock or other valuable consideration and may be payable in a lump sum or by instalments spread over such period as the Bank shall think fit and plant machinery and other fixtures may be severed and sold separately from the premises containing them without the consent of the institution being obtained thereto;

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      (d)     to make any arrangement or compromise which he shall think expedient;

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      (e)     to make and effect or repair renewals and any improvements of the institution's equipment and effect and to maintain or renew all insurances;

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      (f)     to appoint managers, agents, officers, servants and workmen for any of the aforesaid purposes at such salaries and for such periods as he may determine;

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      (g)     to do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers aforesaid and which he or they lawfully may or can do as agent for the financial institution.

(Inserted by S.I. 45/1993)

5C.

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   (1)   Where the Bank proposes to exercise powers under subparagraph (ii) of Article 5B(1) it shall publish in the Gazette and in such newspapers as it thinks appropriate, in the territory where it proposes to exercise such powers, a notification to that effect.

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   (2)   The notification must state—

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      (a)     the property and undertaking the Bank proposes to take over;

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      (b)     the powers of control the Bank proposes to exercise,

and shall give such particulars as the Bank considers necessary for the information of persons having business dealings with the financial institution.

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   (3)   Upon the publication of the notification the property and the powers of control stated therein shall vest in the Bank.

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   (4)   A notification under this article may be amended or supplemented from time to time by subsequent notification in the Gazette and the notification shall have effect as so amended or supplemented.

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   (5)   On and after the publication of a notification under paragraph (1)—

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      (a)     no creditor, shareholder, depositor or any other person shall have any remedy against the financial institution in respect of any claim, and without prejudice to the generality of the foregoing, no creditor, shareholder, depositor or any other person shall commence or continue any action, execution or other proceedings or seek to enforce in any way any judgment or order obtained against the financial institution or its successor or the transferee of the whole or an part of any property, assets or undertaking of the financial institution for the recovery of any claim or in respect of any other liability, until the publication of a notification under Article 5E(1) in relation to the financial institution or without the prior leave of the court unless the court directs otherwise;

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      (b)     where the Bank has not yet published a notification under Article 5E(1) in relation to a financial institution, the Bank may, where it is of the opinion that it is no longer necessary to impose a stay, publish in the Gazette and in such newspapers as it thinks appropriate in the territory where it has assumed control of the financial institution, a notification to lift the stay under subparagraph (a), (d) or (e), except that no person shall take any steps to institute winding up, receivership, administration or any other related proceedings in relation to that financial institution without the prior leave of the court unless the court directs otherwise;

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      (c)     no creditor, shareholder, depositor or any other person shall commence or continue any claim, action, execution or other proceedings or seek to enforce in any way any judgement or order obtained against the Bank, its directors, officers, employees or any person acting on behalf of the Bank or appointed by the Bank under Article 5B in respect of any act, commission, claim, fact or matter connected with or arising out of the acts or omissions of the Bank in respect of the financial institution, until the publication of a notification under Article 5E(1) in relation to the financial institution or without the prior leave of the court unless the court directs otherwise;

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      (d)     no provision of a security agreement, lease or licence between the financial institution and a secured or other creditor that provides, in substance, that on—

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         (i)     the winding up of the financial institution or any related entity or any insolvency restructuring or reorganization proceedings being commenced, continued or ordered in respect of the financial institution or any related entity, or

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         (ii)     the default by the financial institution of an obligation under the security agreement, lease or licence,

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   the financial institution cease to have such rights to use or deal with assets secured or dealt with under the agreement, lease or licence as the financial institution would otherwise have, or is given lesser rights or priorities in respect of any assets or property as the financial institution would otherwise have, has any force or effect, until the publication of a notification under subparagraph (b) or Article 5E(1) in relation to the financial institution or without the prior leave of the court unless the court directs otherwise; and

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      (e)     no provision in any contract or agreement or any other document which gives any party a right to acquire any property or assets of the financial institution on the grounds of any change of control or on any analogous ground or on the grounds of insolvency shall have any effect, until the publication of a notification under subparagraph (b) or Article 5E(1) in relation to the financial institution or without the prior leave of the court unless the court directs otherwise.

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      (Inserted by S.I. 69/2013)

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   (6)   For the purposes of paragraph (5)—

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      (a)     the rights, property and assets referred to in this Article are taken to be the rights, property and assets wheresoever located; and

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      (b)     the agreement, lease or licence referred to in this Article are taken to be an agreement, lease or licence governed by any law.

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      (Inserted by S.I. 69/2013)

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   (7)   A notification published pursuant to paragraph (1) shall only operate as a temporary stay of a claim against the financial institution and shall not have or be taken to have the effect of extinguishing such a claim.

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      (Inserted by S.I. 69/2013 and amended by S.I. 16/2017)

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   (8)   Where a claim is stayed pursuant to paragraph (5), for the purposes of the computation of time limits under any applicable law on limitation of actions, the period of time commencing with the date of the publication of the notification under paragraph (1) and ending with the date of the publication of the notification under paragraph (5)(b) or Article 5E(1) shall be excluded.

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      (Inserted by S.I. 69/2013 and amended by S.I. 16/2017)

5D.

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   (1)   Where the Bank has under Article 5B assumed control of a financial institution, it may terminate or retain the services of any or all of the directors, officers and employees of the institution and the directors so retained shall manage the affairs of the institution subject however to any directions of the Bank.

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   (2)   No acts done or resolution, rules, bye-laws or decisions made or conveyances, transfers, assignments or instruments executed during such period relating to the business affairs, property, undertaking or management of the financial institution shall have effect unless they are approved by or are in conformity with the directions of the Bank.

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   (3)   Where the Bank is exercising powers under Article 5B in relation to any financial institution, that financial institution, its affiliated institutions and their directors, officers and agents other than its auditors shall give every assistance to the Bank for the purpose of facilitating the performance of functions under Article 5B including the supply of information or explanation in such form as may be required, the production of books, documents, minutes, cash, securities and vouchers, and generally the provision of all necessary facilities required for the performance of any function under Article 5B save that in the case of its auditors they shall only be required to supply any information which is in their possession or knowledge other than their internally generated working papers.

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   (4)   Any person appointed under Article 5B shall have all the powers of a commissioner under the Commissions of Enquiry Act to summon and examine persons required under subarticle (2) to assist the Bank in the performance of its functions, and the provisions of section 12 of the Commissions of Enquiry Act, including the provisions imposing penalties, shall apply in all respects to persons summoned under this subarticle.

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   (5)   In the performance of its functions and in the exercise of its powers under Article 5B the Bank shall comply with any general or special directions of the Council and shall act only after due consultation with the Council.

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   (Inserted by S.I. 45/1993)

5E.

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   (1)   Where the Bank has under Article 5B assumed control of a financial institution, the Bank shall, subject to subarticle (2), remain in control of, and may continue to carry on the business of that financial institution until such time as the Bank publishes in the Gazette and in such newspapers as it thinks appropriate in the territory where it has assumed such control a notification that it has ceased to be in control of the financial institution.

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   (2)   The Bank shall relinquish control and shall not continue to carry on the business of a financial institution where—

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      (a)     the circumstances on the basis of which the Bank assumed control of the institution under Article 5B have ceased to exist;

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      (b)     the Bank is of the opinion that it is no longer necessary for it to remain in control of the business of the financial institution; or

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      (c)     the Bank has sold or otherwise disposed of the property, assets and undertakings of the financial institution.

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   (3)   Upon publication of a notification under subarticle (1) and subject to such conditions as may be specified therein, all property not sold or otherwise disposed of by the Bank and all powers of control over the affairs of the financial institution vested in the Bank by or in consequence of the previous notification published under Article 5B shall vest in the financial institution if it still subsists as a corporate entity and be seemed to have been transferred form the Bank to the financial institution.

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   (4)   Where the Bank has, in pursuance of Article 5B, assumed control of a financial institution, the High Court may, upon the application of the directors of the financial institution acting independently of the Bank, if it is satisfied that it is no longer necessary for the protection of the depositors or creditors of the financial institution that the Bank should remain in control of the business of that financial institution, order that the Bank cease to control the business of that financial institution as from a date specified in the Order.

5F.

The Council, the Minister or the Bank, its directors and officers and any persons appointed by the Bank under Article 5B are not subject to any action, claim or demand by, or any liability to, any person in respect of anything done or omitted to be done in good faith and without negligence in the performance, or in connection with the performance of functions conferred on the Bank under this Part. (Inserted by S.I. 45/1993)

5G.

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   (1)   In any court proceedings under this Agreement, the Court shall take into consideration the public interest.

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   (2)   In considering the public interest, the Court shall have regard to —

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      (a)     the critical importance of financial stability to the public interest;

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      (b)     the importance of permitting the Central Bank to discharge its functions in an expeditious and efficient manner in the interest of maintaining financial stability.

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   (3)   Any action under this Agreement by the Central Bank, official administrator or receiver that is the subject of any court proceedings shall be allowed to continue unrestricted notwithstanding the challenge or review before the Court.

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   (4)   Subject to paragraph (4) of Article 5E, where the Court is satisfied in any proceedings under this Agreement that—

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      (a)     a remedy in damages is available to the person who seeks relief; and

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      (b)     it would be just in all the circumstances, having regard to the public interest, to limit relief to an award of damages, the Court shall limit relief in such proceedings to an award of damages.

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   (Inserted by S.I. 16/2017)