Railways Act 1993

• (5) A notice under subsection (4) above shall be given by publishing the notice in such manner as the appropriate designating authority considers appropriate for bringing it to the attention of persons likely to be affected by the grant of the ... exemption.

• (6) If any condition (the “broken condition") of an exemption granted by the appropriate designating authority is not complied with, it may give to any relevant person a direction declaring that the ... exemption is revoked, so far as relating to that person, to such extent and as from such date as may be specified in the direction.

• (7) For the purposes of subsection (6) above—

• “condition”, in relation to an exemption, means any condition subject to compliance with which the exemption was granted;

• “relevant person”, in the case of any ... exemption, means a person who has the benefit of the ... exemption and who—is a person who failed to comply with the broken condition or with respect to whom the broken condition is not complied with; orprovides any of the services in relation to which the broken condition is not complied with.

• (8) Subject to subsection (6) above, an exemption granted under this section, unless previously revoked in accordance with any term contained in the ... exemption, shall continue in force for such period as may be specified in, or determined by or under, the ... exemption.

• (9) Any application for an exemption under subsection (3) above must be made in writing; and where any such application is made, the appropriate designating authority may require the applicant to furnish it with such information as the appropriate designating authority may consider necessary to enable it to decide whether to grant or refuse the ... exemption.

• (10) Any ... exemption granted under subsection (3) above shall be in writing.

• (11) Subsections (1) and (3) above apply in relation to the grant of an exemption under this section whether it is to become effective on, or after, the day on which section 23(1) above comes into force.

• (12) An exemption under this section may make different provision for different cases.

• (12A) A statutory instrument containing an order under this section by the Scottish Ministers is subject to annulment in pursuance of a resolution of the Scottish Parliament.

• (12B) A statutory instrument containing an order under this section made by the Welsh Ministers is subject to annulment in pursuance of a resolution of the National Assembly for Wales.

• (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public sector operators not to be franchisees

25

• (1) The following bodies and persons (in this Part referred to as “public sector operators”) shall not be franchisees—

• (a) any Minister of the Crown, Government department or other emanation of the Crown;

• (b) any local authority;

• (bb) the Greater London Authority;

• (bc) Transport for London;

• (c) any metropolitan county passenger transport authorityIntegrated Transport Authority for an integrated transport area in England;

• (ca) any combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009;

• (cb) any combined county authority established under section 9(1) of the Levelling-up and Regeneration Act 2023;

• (d) any body corporate whose members are appointed by a Minister of the Crown, a Government department, a local authority, the Greater London Authority, Transport for London or a metropolitan county passenger transport authority , an Integrated Transport Authority for an integrated transport area in England , a combined authority or a combined county authority or by a body corporate whose members are so appointed;

• (e) a company—

• (i) a majority of whose issued shares are held by or on behalf of any of the bodies or persons falling within paragraphs (a) to (d) above;

• (ii) in which the majority of the voting rights are held by or on behalf of any of those bodies or persons;

• (iii) a majority of whose board of directors can be appointed or removed by any of those bodies or persons; or

• (iv) in which the majority of the voting rights are controlled by any of those bodies or persons, pursuant to an agreement with other persons;

• (f) a subsidiary of a company falling within paragraph (e) above.

• (2) Expressions used in sub-paragraphs (i) to (iv) of subsection (1)(e) that are defined for the purposes of the Companies Acts (see section 1174 of, and Schedule 8 to, the Companies Act 2006) have the same meaning in those sub-paragraphs.

• (2A) Subsection (1) does not prevent a public sector operator from being a franchisee in relation to a Scottish franchise agreement.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Invitations to tender for franchises

26

• (1) The appropriate franchising authority may select the person who is to be the franchisee in relation to a franchise agreement from among those who submit tenders in response to an invitation to tender under this section for the right to provide, or to secure that a wholly owned subsidiary provides, services for the carriage of passengers by railway under that franchise agreement.

• (2) The appropriate franchising authority shall prepare any such invitation to tender and shall issue that invitation to such persons as it may, after consultation with the Office of Rail and Road, think fit.

• (3) The appropriate franchising authority shall not issue an invitation to tender under this section to (or entertain such a tender from) any person unless it is of the opinion that the person has, or is likely by the commencement of the franchise term to have, an appropriate financial position and managerial competence, and is otherwise a suitable person, to be the franchisee.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4A) The Secretary of State , the Welsh Ministers and the Scottish Ministers shall each publish a statement of policy about how he proposes, or (as the case may be) they propose, to exercise the power under subsection (1) above.

• (4B) The statement must in particular include the policy of the Secretary of State , the Welsh Ministers or the Scottish Ministers about—

• (a) when his or their selection of the person to be a franchisee under a franchise agreement is likely to be from those submitting tenders in response to an invitation to do so;

• (b) when it is likely such an invitation will not be issued; and

• (c) the means by which he is, or they are, proposing that the selection will be made in cases where there is no such invitation.

• (4C) In deciding whether to select the person who is to be the franchisee under a franchise agreement by means of an invitation to tender and whom so to select, the appropriate franchising authority must have regard to its statement of policy.

• (4D) The Secretary of State , the Welsh Ministers or Scottish Ministers—

• (a) may at any time alter or replace the statement of policy which he has made or (as the case may be) which they have made; and

• (b) where that statement is altered or replaced, must publish the altered or replacement statement.

• (4E) Before preparing, altering or replacing a statement of policy the Secretary of State, the Welsh Ministers and the Scottish Ministers must undertake such consultation as they consider appropriate.

• (4F) Where a statement of policy is prepared, altered or replaced, a copy of it must be laid—

• (a) in the case of a statement prepared, altered or replaced by the Secretary of State, before Parliament; ...

• (aa) in the case of a statement prepared, altered or replaced by the Welsh Ministers, before the National Assembly for Wales; and

• (b) in the case of a statement prepared, altered or replaced by the Scottish Ministers, before the Scottish Parliament.

Transfer of franchise assets and shares

27

• (1) It shall be the duty of the responsible authority before entering into a franchise agreement to satisfy itself that if the franchise agreement is entered into—

• (a) the initial franchise assets (if any) for that franchise agreement will be vested in the person who is to be the franchise operator; and

• (b) if the franchise agreement is to be one under which the franchisee undertakes to secure that a wholly owned subsidiary of his provides the franchised services, that the franchise operator will be a wholly owned subsidiary of the franchisee.

• (2) After a franchise agreement has been entered into, it shall be the duty of the responsible authority, before any property, rights or liabilities are subsequently designated as franchise assets in accordance with the terms of, or by amendment to, the franchise agreement, to satisfy itself that, if the property, rights or liabilities in question are so designated, they will be vested in the franchise operator.

• (3) Without the consent of the responsible authority, the franchise operator shall not—

• (a) if and to the extent that the franchise assets are property or rights—

• (i) transfer or agree to transfer, or create or agree to create any security over, any franchise assets or any interest in, or right over, any franchise assets; or

• (ii) create or extinguish, or agree to create or extinguish, any interest in, or right over, any franchise assets; and

• (b) if and to the extent that the franchise assets are liabilities, shall not enter into any agreement under which any such liability is released or discharged, or transferred to some other person.

• (4) Where the franchise agreement is one under which the franchisee undertakes to secure that a wholly owned subsidiary of his provides the franchised services, the franchisee shall not, without the consent of the responsible authority, take any action which would result in the franchise operator ceasing to be a wholly owned subsidiary of his.

• (5) Any transaction which is entered into in contravention of subsection (3) or (4) above shall be void.

• (6) In England and Wales, no execution or other legal process may be commenced or continued, and no distress may be levied and no power to use the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 may be exercised, against any property which is, or rights which are, franchise assets in the case of any franchise agreement.

• (7) In Scotland, no diligence or other legal process may be carried out or continued against any property which is, or rights which are, franchise assets in the case of any franchise agreement.

• (8) In any case where—

• (a) there are to be initial franchise assets in relation to a franchise agreement,

• (b) a franchise agreement is to be one which provides for subsequent designation of property, rights or liabilities as franchise assets, or

• (c) property, rights or liabilities are to be designated as franchise assets by an amendment made to a franchise agreement,

the responsible authority shall ensure that the franchise agreement includes provision specifying, or providing for the determination of, amounts to be paid in respect of the property, rights and liabilities which, immediately before the end of the franchise period, constitute the franchise assets in relation to that franchise agreement if and to the extent that they are transferred by a scheme under section 12 of the Railways Act 2005 at or after the end of that period.

• (9) Without prejudice to the generality of the provisions that may be included in a franchise agreement with respect to the acquisition, provision, disposal or other transfer of property, rights or liabilities (whether franchise assets or not), the responsible authority may undertake in a franchise agreement to exercise its powers under section 12 of the Railways Act 2005 to transfer franchise assets to itself or another in such circumstances as may be specified in the franchise agreement.

• (10) The responsible authority shall ensure that every franchise agreement includes such provision (if any) as it may consider appropriate in the particular case for the purpose of securing—

• (a) that the franchise assets are adequately maintained, protected and preserved; and

• (b) that, at the end of the franchise period, possession of such of the franchise assets as may be specified for the purpose in the agreement, or by the Franchising Director in accordance with the agreement, is delivered up to the Franchising Director or such other person as may be so specified.

• (10A) In this section the “responsible authority”—

• (a) in relation to a Scottish franchise agreement, means the Scottish Ministers;

• (b) in relation to a Welsh franchise agreement the franchised services under which consist of Wales-only services, means the Welsh Ministers; and

• (c) in relation to any other franchise agreement, means the Secretary of State.

• (11) In this Part, “franchise assets”, in relation to any franchise agreement, means—

• (a) any property, rights or liabilities which are designated as franchise assets in the franchise agreement as originally made (in this section referred to as the “initial franchise assets”), and

• (b) any property, rights or liabilities which, after the making of the franchise agreement, are designated as franchise assets in accordance with the terms of, or by an amendment made to, the franchise agreement,

but does not include any property, rights or liabilities which, in accordance with the terms of, or by an amendment made to, the franchise agreement, have for the time being ceased to be designated as franchise assets.

• (12) No rights or liabilities under contracts of employment shall be designated as franchise assets.

• (13) In this section “security” has the meaning given by section 248(b) of the Insolvency Act 1986.

• (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fares and approved discount fare schemes

28

• (1) A franchise agreement may include provision with respect to the fares to be charged for travel by means of the franchised services.

• (2) Subject to the other provisions of this Act, if it appears to the appropriate franchising authority that the interests of persons who use, or who are likely to use, franchised services so require, it shall ensure that the franchise agreement in question contains any such provision as it may consider necessary for the purpose of securing that any fares, or any fares of a class or description, which are to be charged are, in its opinion, reasonable in all the circumstances of the case.

• (3) Every franchise agreement shall include provision requiring the franchise operator—

• (a) to participate in every approved discount fare scheme,

• (b) to charge fares, in cases to which such a scheme applies, at rates which are not in excess of the levels or, as the case may be, the maximum levels set by the scheme, and

• (c) otherwise to comply with the requirements of every such scheme,

if and to the extent that the franchised services are services, or services of a class or description, in relation to which the approved discount fare scheme in question applies.

• (4) The discount fare schemes which are to be regarded , in relation to a franchise agreement, for the purposes of this section as “approved” are those which are from time to time approved for the purposes of this section by the appropriate franchising authority .

• (5) In this section—

• “discount fare scheme” means any scheme for enabling persons who are young, elderly or disabled to travel by railway at discounted fares, subject to compliance with such conditions (if any) as may be imposed by or under the scheme;

• “discounted fare” means a lower fare than the standard fare for the journey in question;

• “scheme” includes any agreement or arrangements.

Other terms and conditions of franchise agreements

29

• (1) A franchise agreement may require—

• (a) the rendering to the Franchising Director by the franchisee or the franchise operator of payments of such amounts and at such intervals as may be specified in, or determined by or under, the franchise agreement; . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) A franchise agreement may include provision requiring the franchisee—

• (a) to operate any additional railway asset; or

• (b) to secure the operation of any additional railway asset by the franchise operator or any other wholly owned subsidiary of the franchisee.

• (3) A franchise agreement shall include provision specifying the franchise term and may include provision enabling that term to be extended by such further term as may be specified in the franchise agreement.

• (4) Without prejudice to the generality of the provisions relating to property, rights and liabilities that may be included in a franchise agreement, a franchise agreement may include provision requiring the franchise operator—

• (a) to acquire from such person as may be specified in the franchise agreement, and to use, such property or rights as may be so specified; or

• (b) to undertake such liabilities as may be so specified.

• (5) Subject to any requirements imposed by or under this Act, a franchise agreement may contain any such provisions as the appropriate franchising authority may think fit.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) In this Part, “additional railway asset” means any network, station or light maintenance depot, and any reference to an additional railway asset includes a reference to any part of an additional railway asset.

Failure to secure subsequent franchise agreement

30

• (1) The relevant franchising authority shall provide, or secure the provision of, services for the carriage of passengers by railway where—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) a franchise agreement in respect of the services is terminated or otherwise comes to an end ... ....

• (1A) The relevant franchising authority may secure the provision of services for the purpose of fulfilling the duty under subsection (1) only by making a direct award of a public service contract to a public sector company in accordance with regulation 17 (general direct award provision for rail) of the 2023 Regulations.

• (1B) Regulation 22 (pre-award publication) of the 2023 Regulations does not apply in relation to an award made as mentioned in subsection (1A).

• (1C) The duty in subsection (1) does not apply in respect of services at any time when they are being provided under section 30A (temporary continuation of existing franchises).

• (3) Subsection (1) above does not—

• (a) require the relevant franchising authority to provide or secure the provision of services if and to the extent that, in its opinion, adequate alternative railway passenger services are available;

• (aa) require the Secretary of State or the Scottish Ministers to provide or secure the provision of a Welsh service where it appears to the Secretary of State or the Scottish Ministers (as the case may be) that the Secretary of State or the Scottish Ministers will not be receiving funds from the Welsh Ministers that are reasonably equivalent to those provided by the Welsh Ministers (whether directly to the previous franchisee or otherwise) in respect of the service provided by the previous franchisee;

• (ab) require the Secretary of State to provide or secure the provision of a service within the area of a Passenger Transport Executive where it appears to him that he will not be receiving funds from the Executive that are reasonably equivalent to those provided by that Executive (whether directly to the previous franchisee or otherwise) in respect of the service provided by the previous franchisee;

• (ac) require the Secretary of State to provide or secure the provision of a service that makes scheduled calls in Greater London where it appears to him that he will not be receiving funds from Transport for London that are reasonably equivalent to those that were provided by Transport for London (whether directly to the previous franchisee or otherwise) in respect of the service provided by the previous franchisee;

• (b) preclude it from making a proposal to which section 24 of the Railways Act 2005 (proposals to discontinue franchised or secured services) applies in relation to any of the services, in which case its duty under this section to secure the provision of the services to which the proposal relates will (subject to subsections (7) and (8) of that section) terminate on the date for the discontinuance of services specified in the proposal; or

• (c) preclude it from ceasing to provide or secure the provision of any of the services in any case falling within any of paragraphs (a) to (d) of subsection (3) of that section.

• (3A) For the purposes of this section the Secretary of State, the Scottish Ministers and the Welsh Ministers shall each have power—

• (a) to provide or operate network services, station services or light maintenance services; or

• (b) to store goods or consign them from a place to which they have been carried by rail;

and the Scottish Ministers shall have power to provide Scotland-only services and cross-border services, and the Welsh Ministers shall have power to provide Wales-only services and Welsh components of Welsh services..

• (3B) In this section “relevant franchising authority” means the person who was the appropriate franchising authority in relation to the franchise agreement that has been terminated or otherwise come to an end.

• (3C) In this section—

• “previous franchisee”, in relation to a railway passenger service, means the franchisee in relation to the franchise agreement under which the service was previously provided; ...

• ...

and references in this section to a Passenger Transport Executive and to a service within the area of a Passenger Transport Executive are to be construed as they are to be construed for the purposes of section 13 of that Act.

Leases granted in pursuance of franchise agreements: no security of tenure

31

• (1) In any case where—

• (a) a franchise agreement makes provision for the franchisee, the franchise operator or a wholly owned subsidiary of the franchisee to enter into an agreement (“the contemplated agreement") with a person who has an interest in a network or a railway facility,

• (b) the network or railway facility is to be used for or in connection with the provision of any of the franchised services, and

• (c) the contemplated agreement creates a tenancy of any property which (whether in whole or in part) constitutes, or is comprised in, the network or railway facility,

neither Part II of the Landlord and Tenant Act 1954 (security of tenure of business premises) nor the Tenancy of Shops (Scotland) Act 1949 (security of tenure of shop premises in Scotland) shall apply to that tenancy.

• (2) For the purposes of this section, a person shall be regarded as having an interest in a network or railway facility if he has an estate or interest in, or right over, any of the property which constitutes, or is comprised in, the network or railway facility.

• (3) Any reference in this section to a network or a railway facility includes a reference to any part of a network or railway facility.

• (4) In this section—

• “agreement” includes a lease, underlease or sublease (as well as a tenancy agreement or an agreement for a lease, underlease or sublease);

• “tenancy” has the same meaning as it has in Part II of the Landlord and Tenant Act 1954 or, in Scotland, as it has in the Tenancy of Shops (Scotland) Act 1949.

Passenger Transport Authorities and Executives

Power of Passenger Transport Executives to enter into agreements with wholly owned subsidiaries of the Board

32

Re-negotiation of section 20(2) agreements as a result of this Act

33

Passenger Transport Authorities and Executives: franchising

34

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Termination and variation of section 20(2) agreements by the Franchising Director

35

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous amendments of the Transport Act 1968

36

• (1) In section 10 of the Transport Act 1968, in subsection (1) (which specifies the powers of Passenger Transport Executives) after paragraph (vi) there shall be inserted—

(via) with the approval of the Authority, to enter into and carry out agreements with any person who is the operator of, or who has an estate or interest in, or right over, a network, station or light maintenance depot or some part of a network, station or light maintenance depot, in connection with the building, replacement, redevelopment, refurbishment, repair, maintenance, operation or staffing of the network, station or light maintenance depot or any part thereof;

.

• (2) After paragraph (viii) of that subsection there shall be inserted—

(viiia) to let locomotives and other rolling stock on hire to any person who is (within the meaning of Part I of the Railways Act 1993) the franchisee or the franchise operator under a franchise agreement to which the Executive is a party; (viiib) to let locomotives and other rolling stock on hire to a person not falling within paragraph (viiia) above— (a) for or in connection with the provision of railway passenger services within that area or within the permitted distance; or (b) with the written consent of the Secretary of State, for or in connection with the provision of railway passenger services outside that area and beyond the permitted distance; (viiic) with the approval of the Authority, to enter into and carry out agreements with the owner of any locomotive or other rolling stock concerning the persons to whom, or the terms on which, the locomotive or other rolling stock may be let on hire;

.

• (3) In section 20(2) of that Act, in paragraph (a) (duty of Passenger Transport Executive to keep under review the railway passenger services provided by the Railways Board for meeting the needs of persons travelling between places in the Executive’s passenger transport area etc) for the words “by the Railways Board" there shall be substituted the words “ by passenger service operators (within the meaning of Part I of the Railways Act 1993) ”.

• (4) After section 23 of that Act there shall be inserted—

(23A) (1) For the purposes of sections 10, 15 and 20 of this Act— (a) “light maintenance depot”, “locomotive”, “network”, “railway passenger services”, “rolling stock” and “station” have the meaning given in section 83(1) of the Railways Act 1993; and (b) “operator” has the meaning given in section 6(2) of that Act. (2) For the purposes of sections 10(1)(vi), 15(1)(d) and 20(2)(b), (4) and (6) of this Act “wholly-owned subsidiary” has the meaning given by section 736 of the Companies Act 1985.

.

• (5) In section 159(1) of that Act (general interpretation), in the definition of “subsidiary" and “wholly-owned subsidiary", for the words “subject to section 51(5)" there shall be substituted the words “ subject to sections 23A(2) and 51(5) ”.

Closures

Proposals to discontinue non-franchised etc. passenger services

37

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proposals to discontinue franchised etc. passenger services

38

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notification of proposals to close operational passenger networks

39

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proposals to close passenger networks operated on behalf of the Franchising Director

40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notification of proposals to close railway facilities used in connection with passenger services

41

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proposals to close passenger railway facilities operated on behalf of the Franchising Director

42

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notification to, and functions of, the Regulator and the relevant consultative committees

43

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reference to the Secretary of State of decisions of the Regulator concerning proposed closures

44

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Closure conditions: general

45

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Variation of closure conditions

46

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bus substitution services etc

47

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experimental railway passenger services

48

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Abolition of former closure procedures, exemptions from new procedures and imposition of alternative procedure

49

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exclusion of liability for breach of statutory duty

50

• (1) The obligations of the Secretary of State and of the Welsh Ministers and of the Scottish Ministers, so far as imposed by or under any provision of this Part—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) to secure the provision of any services, or

• (d) to secure the operation of any additional railway asset,

shall not give rise to any form of duty or liability enforceable by civil proceedings for breach of statutory duty.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary powers of the Franchising Director etc.

Performance of the Franchising Director’s duties to secure the provision of services etc

51

Contracts between the Franchising Director and the Board etc. for the provision of non-franchised railway passenger services

52

Powers of the Franchising Director to form and finance companies and to acquire and dispose of assets

53

Exercise of functions for purpose of encouraging investment in the railways

54

• (1) The Secretary of State , the Welsh Ministers or the Scottish Ministers—

• (a) in exercising or deciding whether or not to exercise any of his or 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 Secretary of State , the Welsh Ministers and the Scottish Ministers shall each have power to enter into agreements under which an undertaking is given by him or them—

• (a) to exercise his or their franchising functions;

• (b) to refrain from exercising them; or

• (c) to exercise them in a particular manner.

• (3) In this section—

• “franchising functions”, in relation to the Secretary of State , the Welsh Ministers or the Scottish Ministers, means—any of the functions of the Secretary of State or of the Welsh Ministers or of the Scottish Ministers under sections 17 to 19, 23, 24, 26 to 31 . . . above;any power conferred on the Secretary of State , the Welsh Ministers or the Scottish Ministers under or by virtue of section 1(2) of the Railways Act 2005; andany other functions of the Secretary of State , the Welsh Ministers or the Scottish Ministers 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.

Enforcement by the Office of Rail and Road and the Authority

Orders for securing compliance

55

• (1) Subject to subsections (2) to (5C) and section 56 below, where the appropriate authority is satisfied that a relevant operator is contravening, or is likely to contravene, any relevant condition or requirement, it 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 subsections (5) to(5C) below, where it appears to the appropriate authority—

• (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,

it shall (instead of taking steps towards the making of a final order) by a provisional order make such provision as appears to it 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 authority 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 subsections (5) to(5C) and section 56 below, the appropriate authority shall confirm a provisional order, with or without modifications, if—

• (a) it 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 authority shall not make a final order, or make or confirm a provisional order, in relation to a relevant operator if it is satisfied—

• (a) that the duties imposed on it by section 4 above . . . preclude the making or, as the case may be, the confirmation of the order;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5ZA) Neither the Secretary of State nor the Scottish Ministers nor the Welsh Ministers shall make a final order, or make or confirm a provisional order, in relation to a licence holder or person under closure restrictions unless—

• (a) the Secretary of State, the Scottish Ministers or the Welsh Ministers (as the case may be) has or have given notice to the Office of Rail and Road specifying a period within which it may give notice to him or them if it considers that the most appropriate way of proceeding is under the Competition Act 1998;

• (b) that period has expired; and

• (c) the Office of Rail and Road has not given notice to the Secretary of State, the Scottish Ministers or the Welsh Ministers (as the case may be) within that period that it so considers (or, if it has, it has withdrawn it).

• (5A) Before making a final order or making or confirming a provisional order, the Office of Rail and Road shall consider whether it would be more appropriate to proceed under the Competition Act 1998.

• (5AA) The Office of Rail and Road shall not make a final order or make or confirm a provisional order if it considers that it would be more appropriate to proceed under the Competition Act 1998.

• (5B) If the appropriate authority is satisfied—

• (a) that the relevant operator has agreed to take, and is taking, all such steps as it appears to the appropriate authority 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

• (b) that the contravention or apprehended contravention will not adversely affect the interests of users of railway services or lead to any increase in public expenditure,

it shall only make a final order, or make or confirm a provisional order, if it considers it appropriate to do so.

• (5C) Neither the Secretary of State nor the Scottish Ministers nor the Welsh Ministers shall be required, in respect of any contravention or apprehended contravention of the terms of a franchise agreement, to make a final order, or to make or to confirm a provisional order, if he considers or (as the case may be) they consider—

• (a) that the contravention or apprehended contravention is trivial; and

• (b) that it would be inappropriate, for that reason, to make or to confirm the order.

• (5D) The appropriate authority must comply with subsection (6)—

• (a) in a case where the appropriate authority is the Secretary of State or the Scottish Ministers or the Welsh Ministers, if that authority decides not to make a final order, or not to make or to confirm a provisional order, because of provision contained in subsection (5) or (5ZA) above; or

• (b) in the case of the Office of Rail and Road, if it decides not to make a final order, or not to make or to confirm a provisional order, because of provision contained in subsection (5), (5AA) or (5B) above.

• (6) Where the appropriate authority must comply with this subsection, it must—

• (a) serve notice of its decision on the relevant operator; and

• (b) publish the notice in such manner as it 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 authority.

• (7A) The provision that may be made in a final or provisional order includes, in particular, provision requiring the relevant operator to pay in the event of a specified contravention of the order—

• (a) in the case of an order made by the Scottish Ministers, to them, ...

• (aa) in the case of an order made by the Welsh Ministers, to them, and

• (b) in any other case, to the Secretary of State,

such reasonable sum in respect of the contravention as is specified in, or determined in accordance with, the order in such manner, at such place and by such date as is so specified or determined.

• (7B) The amount of the sum may not exceed 10 per cent. of the turnover of the relevant operator determined in accordance with an order made by the Secretary of State; and an order under this subsection shall not be made unless a draft of the statutory instrument containing it has been laid before and approved by a resolution of each House of Parliament.

• (7C) If the whole or any part of the sum is not paid by the date by which it is to be paid, the unpaid balance from time to time shall carry interest at the rate for the time being specified in section 17 of the Judgments Act 1838.

• (9) Without prejudice to section 44 of the Railways Act 2005 (exclusion of liability for breach of statutory duty) , 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 authority” means—in relation to any relevant condition or requirement in the case of a licence holder, . . . , . . . the Office of Rail and Road;in relation to any relevant condition or requirement in the case of—a franchisee under a Scottish franchise agreement,a franchise operator in relation to such an agreement, ora person under Scottish closure restrictions,the Scottish Ministers; and in relation to a term of a Welsh franchise agreement, where the term relates solely to providing or securing the provision of a Wales-only service or a Welsh component of a Welsh service, the Welsh Ministers;in relation to a term of a Welsh franchise agreement, where the term does not relate solely to providing or securing the provision of a Wales-only service or a Welsh component of a Welsh service, the Secretary of State;in relation to a term of a franchise agreement that is not a Scottish franchise agreement or a Welsh franchise agreement, the Secretary of State;in relation to a duty mentioned in subsection (11) which is imposed or arises in a Welsh case, the Welsh Ministers;in relation to a duty mentioned in subsection (11) which is imposed or arises in a case that is not a Scottish case or a Welsh case, the Secretary of State;

• “final order” means an order under this section, other than a provisional order or an order under subsection (7B);

• “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, any duty mentioned in subsection (11) to which he is subject;

• “relevant operator” means—a licence holder;a franchisee;a franchise operator who is a party to the franchise agreement;a person under closure restrictions.

• (11) In subsections (5ZA) and (10) above, “person under closure restrictions” means a person who is under—

• (a) a duty under section 22(8), 26(8), 29(8) or 37(2) of the Railways Act 2005 not to discontinue a railway passenger service or an experimental passenger service or not to discontinue the operation or use of a network or station, or part of a network or station;

• (b) a duty to comply with any requirement imposed under section 33(2)(i) of that Act (closure requirements imposed on operators); or

• (c) a duty to comply with conditions to which he has agreed under section 34(5) of that Act (conditions of minor modification determination).

• (11A) In the definition of “the appropriate authority” in subsection (10) above the reference to a relevant condition or requirement in the case of a person under Scottish closure restrictions is a reference to a relevant condition or requirement which—

• (a) falls within paragraph (c) of the definition in that subsection;

• (b) is imposed or arises in the case of a closure; and

• (c) is so imposed or so arises in a Scottish case;

...

• (11B) In this section, “a Scottish case”, in relation to a closure, means—

• (a) a case in which the Scottish Ministers are the national authority for the purposes of provisions of Part 4 of the Railways Act 2005 relating to the proposal for the closure;

• (b) a case in which it is the Scottish Ministers who make a determination under section 34 of that Act (minor modifications) in relation to the closure; or

• (c) a case in which the closure is a closure notice of which is given under section 37 of that Act (experimental passenger services) and the proposal relates to a Scotland-only service.

• (11C) In subsection (10) “a Welsh case”, in relation to a closure, means—

• (a) a case in which the Welsh Ministers are the national authority for the purposes of provisions of Part 4 of the Railways Act 2005 relating to the proposal for the closure;

• (b) a case in which it is the Welsh Ministers who make a determination under section 34 of that Act (minor modifications) in relation to the closure; or

• (c) a case in which the closure is a closure of which notice is given under section 37 of that Act (experimental passenger services) and the proposal relates to a Wales-only service.

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedural requirements

56

• (1) Before it makes a final order or confirms a provisional order, the appropriate authority shall give notice—

• (a) stating that it 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 its opinion, constitute or would constitute contraventions of that condition or requirement, and

• (iii) the other facts which, in its opinion, justify the making or confirmation of the order, and

• (c) specifying the period (not being less than 21 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 authority 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.

• (2A) Where the Office of Rail and Road serves a copy of a notice under subsection (1) above on a licence holder, he shall also serve a copy on the Secretary of State and on the Scottish Ministers and the Welsh Ministers.

• (3) The appropriate authority 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 authority shall—

• (a) serve on the relevant operator to whom the order relates such notice as appears to him requisite of its proposal to make or confirm the order with modifications;

• (b) unless the proposed modifications are trivial, in that notice specify a period (not being less than seven 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 authority 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 it 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 authority shall give notice—

• (a) stating that it proposes to revoke the order and setting out the effect of its revocation, and

• (b) specifying the period (not being less than 21 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 authority decides not to revoke the order to which the notice relates, it shall give notice of its decision.

• (8) A notice under subsection (6) or (7) above shall be given—

• (a) by publishing the notice in such manner as the appropriate authority 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.

Validity and effect of orders

57

• (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; . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2A) If such an application is made in relation to a provision of an order requiring the payment of a sum in the event of a contravention and the sum would be payable before the time when the application is determined, it need not be paid until that time.

• (2B) Where such an application is so made the court, if satisfied as mentioned in subsection (2) above, may (instead of quashing the order or the provision of the order) make provision under either or both of paragraphs (a) and (b) of subsection (2C) below.

• (2C) The provision referred to in subsection (2B) above is—

• (a) provision substituting for the sum, or provision for determining a sum, specified in the order such lesser sum, or such other provision for determining a sum, as the court considers appropriate in all the circumstances of the case; and

• (b) provision substituting for the date by which the sum is to be paid specified in or determined in accordance with the order such later date as the court considers appropriate in all the circumstances of the case.

• (2D) Where the court substitutes a lesser sum, or different provision for determining a sum, it may require the payment of interest on the new sum at such rate, and from such date, as it determines; and where it specifies as the date by which the sum is to be paid a date before the determination of the application it may require the payment of interest on the sum from that date at such rate as it determines.

• (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 authority 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 sections 57F and 58 below “the court” means the High Court in relation to England and Wales and the Court of Session in relation to Scotland.

Power to require information etc

58

• (1) Where it appears to the appropriate authority that a relevant operator may have contravened or be contravening—

• (a) a relevant condition or requirement, or

• (b) a final or provisional order made by the appropriate authority,

the appropriate authority may, for any purpose connected with such of its functions under section 55 or 57A 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 authority and—

• (a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the appropriate authority or to any person appointed by the appropriate authority 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 authority 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 authority, 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.

Railway administration orders, winding up and insolvency

Meaning and effect of railway administration order

59

• (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 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 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—

• (za) “appropriate national authority”—

• (i) in relation to a Scottish protected railway company or a company subject to a railway administration order that was such a company when the order was made, means the Scottish Ministers; ...

• (ia) in relation to a Welsh protected railway company or a company subject to a railway administration order that was such a company when the order was made, means the Welsh Ministers; and

• (ii) in relation to any other protected railway company or company subject to a railway administration order, means the Secretary of State;

• (a) “protected railway company” means a company which is both a private sector operator and the holder of—

• (i) a passenger licence or a railway undertaking licence which authorises the carriage of passengers by railway (or both); or

• (ii) a network licence, a station licence or a light maintenance depot licence; . . .

• (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 or a European licence which authorises the carriage of passengers by railway (or both) 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.

• (c) “Scottish protected railway company” means a protected railway company that is such a company only in respect of activities carried on by it as franchise operator in relation to a Scottish franchise agreement.

• (d) “Welsh protected railway company” means a protected railway company that is such a company only in respect of activities carried on by it as franchise operator in relation to a Welsh franchise agreement the franchised services under which consist of Wales-only services.

• (7) In this section—

• “business” and “property” have the same meaning as they have in the Insolvency Act 1986;

• “the court”, in relation to a protected railway company, means the court—having jurisdiction to wind up the company, orthat would have such jurisdiction apart from section 221(2) or 441(2) of the Insolvency Act 1986 (exclusion of winding up jurisdiction in case of companies having principal place of business in, or incorporated in, Northern Ireland);

• “the railway administration order provisions of this Act” means this section, sections 60 to 65 below and Schedules 6 and 7 to this Act.

Railway administration orders made on special petitions

60

• (1) If, on an application relating to a protected railway company 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 or 57A 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 Insolvency Act 1986;

• “the court” has the same meaning as in section 59 above.

Restriction on making winding-up order in respect of protected railway company

61

• (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 appropriate national authority ; and

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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 appropriate national authority , . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 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.

Restrictions on voluntary winding up and insolvency proceedings in the case of protected railway companies

62

• (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 appropriate national authority ; and

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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 appropriate national authority , . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 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 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 appropriate national authority ; and

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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 Insolvency Act 1986 has been made in the case of a protected railway company—

• (a) the appropriate national authority , . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 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 appropriate national authority ; . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (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 Insolvency Act 1986;

• “security” and “property” have the same meaning as in the Insolvency Act 1986.

Government financial assistance where railway administration orders made

63

• (1) Where a railway administration order is for the time being in force in relation to a company other than a Scottish protected railway company or a Welsh protected railway 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 a relevant person in respect of—

• (i) liabilities incurred by that person in connection with the carrying out by the railway administrator of his functions under the order; and

• (ii) loss or damage incurred by that person in that connection.

• (2) The Secretary of State may, with the consent of the Treasury, guarantee,. . . 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 where that company—

• (a) is a company in relation to which a railway administration order is in force at the time when the guarantee is given; and

• (b) is not a Scottish protected railway company or a Welsh protected railway company.

a railway administration order is in force at the time when the guarantee is given.

• (2A) A grant, loan, indemnity or guarantee under this section may be made or given in whatever manner, and on whatever terms and subject to whatever conditions, the Secretary of State considers appropriate.

• (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.

• (3A) The power of the Secretary of State under this section to agree to indemnify a relevant person—

• (a) is confined to a power to agree to indemnify that person in respect of liabilities, loss and damage incurred or sustained by him as a relevant person; but

• (b) includes power to agree to indemnify persons (whether or not they are identified or identifiable at the time of the agreement) who subsequently become relevant persons.

• (3B) A person is a relevant person for the purposes of this section if he is—

• (a) the railway administrator;

• (b) an employee of the railway administrator;

• (c) a member or employee of a firm of which the railway administrator is a member;

• (d) a member or employee of a firm of which the railway administrator is an employee;

• (e) a member of a firm of which the railway administrator was an employee or member at a time when the order was in force;

• (f) a body corporate which is the employer of the railway administrator; or

• (g) an officer, employee or member of such a body corporate.

• (3C) For the purposes of this section—

• (a) the references in this section to the railway administrator, in relation to a railway administration order, are references to the person appointed to achieve the purposes of the order and, where two or more persons are so appointed, are to be construed as references to any one or more of them; and

• (b) the references to a firm of which a person was a member or employee at a particular time include references to a firm which holds itself out to be the successor of a firm of which he was a member or employee at that time.

• (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.

• (4A) If sums are paid by the Secretary of State in consequence of an indemnity agreed to under this section in the case of a company in relation to which a railway administration order is in force, the company must pay him—

• (a) such amounts in or towards the repayment to him of those sums as he may direct; and

• (b) interest, at such rates as he may direct, on amounts outstanding under this subsection.

• (4B) Payments to the Secretary of State under subsection (4A) must be made at such times and in such manner as he may determine.

• (4C) Subsection (4A) does not apply in the case of a sum paid by the Secretary of State for indemnifying a person in respect of a liability to the company in relation to which the railway administration order in question was made.

• (4D) The consent of the Treasury is required for the giving of a direction under subsection (4A) and for the making of a determination under subsection (4B).

• (5) Any sums received under subsection (3) above by the Secretary of State shall be paid into the Consolidated Fund.

Guarantees under section 63

64

• (1) This section applies in relation to any guarantee given by the Secretary of State under section 63 above.

• (2) Immediately after a guarantee to which this section applies is given, the Secretary of State shall lay a statement of the guarantee before each House of Parliament.

• (3) Where any sum is paid out for fulfilling a guarantee to which this section applies, the Secretary of State shall, as soon as possible after the end of each financial year (beginning with that in which the sum is paid out and ending with that in which all liability in respect of the principal of the sum and in respect of the interest thereon is finally discharged), lay before each House of Parliament a statement relating to that sum.

• (4) Any sums required by the Secretary of State for fulfilling a guarantee to which this section applies shall be paid out of money provided by Parliament.

• (5) Without prejudice to any provision applied in relation to the relevant company by Schedule 6 to this Act, if any sums are paid out in fulfilment of a guarantee to which this section applies, the relevant company shall make to the Secretary of State, at such times and in such manner as the Secretary of State may from time to time direct—

• (a) payments of such amounts as the Secretary of State may so direct in or towards repayment of the sums so paid out; and

• (b) payments of interest, at such rate as the Secretary of State may so direct, on what is outstanding for the time being in respect of sums so paid out;

and the consent of the Treasury shall be required for the giving of a direction under this subsection.

• (6) Any sums received by the Secretary of State under subsection (5) above shall be paid into the Consolidated Fund.

• (7) In subsection (5) above “the relevant company” in relation to a guarantee, means the company which borrowed the sums in respect of which the guarantee was given.

Meaning of “company” and application of provisions to unregistered, foreign and other companies

65

• (1) In the railway administration order provisions of this Act—

• “company” means—a company registered under the Companies Act 2006, oran unregistered company; and

• “unregistered company” means a company that is not registered under that Act.

• (2) In the application of section 59(1) above in a case where the protected railway company there mentioned is a foreign company, the reference to the affairs, business and property of the company shall be taken as a reference to the affairs and business of the company, so far as carried on in Great Britain, and the property of the company within Great Britain.

• (3) In the application of section 9(5) of the 1986 Act by virtue of subsection (4) of section 60 above or subsection (3) of section 61 above where the petition mentioned in the subsection in question relates to a company which is a foreign company, the reference to restricting the exercise of any powers of the directors or of the company shall be taken as a reference to restricting—

• (a) the exercise within Great Britain of the powers of the directors or of the company; or

• (b) any exercise of those powers so far as relating to the affairs, business or property of the company in Great Britain.

• (4) In the application of provisions in section 10 of the 1986 Act by virtue of subsection (5) of section 60 above where the company mentioned in that subsection is a foreign company—

• (a) paragraph (a) of subsection (1) shall be omitted;

• (b) any reference in paragraph (b) or (c) of that subsection to property or goods shall be taken as a reference to property or (as the case may be) goods for the time being situated within Great Britain;

• (c) in paragraph (c) of that subsection—

• (i) the reference to the commencement or continuation of proceedings shall be taken as a reference to the commencement or continuation of proceedings in Great Britain; and

• (ii) the reference to the levying of distress against the company shall be taken as a reference to the levying of distress against the foreign company to the extent of its property in England and Wales; and

• (d) any reference in subsection (2) to an administrative receiver shall be taken to include a reference to any person performing, in relation to the foreign company, functions equivalent to those of an administrative receiver, within the meaning of section 251 of the 1986 Act.

• (5) Subsections (1) to (4) of section 62 above shall not have effect in relation to a protected railway company which is a foreign company.

• (6) In the application of subsection (7) of that section where the protected railway company there mentioned is a foreign company, the reference to the company’s property shall be taken as a reference to such of its property as is for the time being situated in Great Britain.

• (7) In this section—

• “the 1986 Act” means the Insolvency Act 1986;

• “foreign company” means a company incorporated outside Great Britain;

• “the railway administration order provisions of this Act” means sections 59 to 64 above, this section and Schedules 6 and 7 to this Act.

Consumer protection

Amendments of the Fair Trading Act 1973

66

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) For the purposes of Part 3 of the Enterprise Act 2002 (merger references), where a person enters into a franchise agreement as a franchisee, there shall be taken to be brought under his control an enterprise engaged in the supply of the railway services to which the agreement relates.

• (4) In section 137 of the 1973 Act, in subsection (3) (meaning of the expression “the supply of services"), after paragraph (f) there shall be inserted the words

and (g) includes the supply of network services and station services, within the meaning of Part I of the Railways Act 1993;

.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) Expressions used in subsection (3) above and in Part 3 of the Enterprise Act 2002 have the same meaning in that subsection as they have in that Part.

Respective functions of the Regulator and the Director General of Fair Trading, and functions of the Monopolies Commission

67

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The functions to which subsection (2A) below applies shall be concurrent functions of the Office of Rail and Road and the CMA.

• (2A) This subsection applies to the functions of the CMA under Part 4 of the Enterprise Act 2002 (other than sections 166 , 167C , 171 and 174E) so far as those functions—

• (a) are exercisable by the CMA Board (within the meaning of Schedule 4 to the Enterprise and Regulatory Reform Act 2013), and

• (b) relate to the supply of services relating to railways.

• (2B) So far as necessary for the purposes of, or in connection with, subsections (2) and (2A) above—

• (a) references in Part 4 of the Act of 2002 to the CMA (including references in provisions of that Act applied by that Part) shall be construed as including references to the Office of Rail and Road (except in sections 166 , 167C , 171 and 174E of that Act and in any other provision of that Act where the context otherwise requires);

• (b) references in that Part to section 5 of the Act of 2002 are to be construed as including references to section 69(1) of this Act.

• (2C) Section 130A of the Act of 2002 is to have effect in its application in relation to the Office of Rail and Road by virtue of subsections (2) and (2A)—

• (a) as if for subsection (1) of that section there were substituted—

(1) Where the Office of Rail and Road— (a) is proposing to carry out its functions under section 69(1) of the Railways Act 1993 in relation to a matter for the purposes mentioned in subsection (2), and (b) considers that the matter is one in respect of which it would be appropriate for it to exercise its powers under section 174 (investigation) in connection with deciding whether to make a reference under section 131, the Office of Rail and Road must publish a notice under this section (referred to in this Part as a “market study notice”).

, and

• (b) as if in subsection (2)(a) of that section, for “the acquisition or supply of goods or services of one or more than one description in the United Kingdom” there were substituted “the supply of services relating to railways within the meaning of section 67(3ZA) of the Railways Act 1993”.

• (3) The Office of Rail and Road shall be entitled to exercise, concurrently with the CMA, the functions of the CMA under the provisions of Part 1 of the Competition Act 1998 (other than sections 31D(1) to (6) , 35C, 38(1) to (6) , 40B(1) to (4) and 51), so far as relating to—

• (a) agreements, decisions or concerted practices of the kind mentioned in section 2(1) of that Act,

• (b) conduct of the kind mentioned in section 18(1) of that Act, or

• (c) transferred EU anti-trust commitments or transferred EU anti-trust directions (as defined in section 40ZA of that Act),

which relate to the supply of services relating to railways.

• (3ZA) In subsections (2A) and (3) above “services relating to railways” means—

• (a) railway services;

• (b) the provision or maintenance of rolling stock;

• (c) the development, maintenance or renewal of a network, station or light maintenance depot; and

• (d) the development, provision or maintenance of information systems designed wholly or mainly for facilitating the provision of railway services.

• (3ZB) The Secretary of State may by order amend subsection (3ZA) above; and an order under this subsection shall not be made unless a draft of the statutory instrument containing it has been laid before and approved by a resolution of each House of Parliament.

• (3A) So far as necessary for the purposes of, or in connection with, the provisions of subsection (3) above, references in Part I of the Competition Act 1998 (including references in provisions of the Enterprise Act 2002 applied by that Part) to the CMA are to be read as including a reference to the Office of Rail and Road (except in sections 31D(1) to (6) , 35C, 38(1) to (6) , 40B(1) to (4), 51, 52(6) and (8) and 54 of that Act and in any other provision of that Act where the context otherwise requires).

• (4) Before the CMA or the Office of Rail and Road first exercises in relation to any matter functions which are exercisable concurrently by virtue of subsection (2) above, that person shall consult the other.

• (4A) Neither the CMA nor the Office of Rail and Road shall exercise in relation to any matter functions which are exercisable concurrently by virtue of subsection (2) above if functions which are so exercisable have been exercised in relation to that matter by the other.

• (5) It shall be the duty of the Office of Rail and Road, for the purpose of assisting a CMA group in carrying out an investigation on a reference falling within subsection (6) below, to give to the group —

• (a) any information which is in its possession and which relates to matters falling within the scope of the investigation and—

• (i) is requested by the group for that purpose; or

• (ii) is information which in its opinion it would be appropriate for that purpose to give to the group without any such request; and

• (b) any other assistance which the group may require and which it is within its power to give, in relation to any such matters;

and the group shall, for the purposes of carrying out any such investigation, take into account any information given to them for that purpose under this subsection.

• (6) The references which fall within this subsection are—

• (a) any market investigation reference made by the Office of Rail and Road (under section 131 of the Enterprise Act 2002) by virtue of subsection (2) or (3) above; and

• (b) any reference made to the CMA by the Secretary of State under section 11 of the 1980 Act, if the person who is the subject of the reference is—

• (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ii) a publicly owned railway company which supplies network services or station services.

• (6A) In subsection (5) “CMA group” has the same meaning as in Schedule 4 to the Enterprise and Regulatory Reform Act 2013.

• (7) A copy of any report of the CMA under section 136 or 142 of the Enterprise Act 2002 which relates to the supply of services relating to railways may be transmitted by the CMA to the Office of Rail and Road, notwithstanding that the reference . . . could not have been made by the Office of Rail and Road.

• (8) If any question arises as to whether subsection (2) or (3) above applies to any particular case , that question shall be referred to and determined by the Secretary of State; and no objection shall be taken to anything done under—

• (a) Part 4 of the Enterprise Act 2002, or

• (b) Part I of the Competition Act 1998 (other than sections 31D(1) to (6) , 35C, 38(1) to (6) , 40B(1) to (4) and 51),

by or in relation to the Office of Rail and Road on the ground that it should have been done by or in relation to the CMA.

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (11) In making any decision, or otherwise taking action, for the purposes of any of its functions that—

• (a) by virtue of this section, are functions exercisable concurrently with the CMA, and

• (b) in the case of functions under the Competition Act 1998, are functions within Schedule 4A to the Enterprise and Regulatory Reform Act 2013 by virtue of paragraph 5 of that Schedule,