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In order to clear up doubts as to whether arbitrations are legal proceedings for the purpose of the Alien Enemies (Winding up) Amendment Ordinance, 1915, “legal pro- ceeding is defined as including an arbitration. The sec- tions affected are sections 2, 3, 4, and 5 of Ordinance No. 11 of 1915.
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Clause 3 gives the Court wider power to stay legal pro- ceedings brought against liquidators. Cases may arise in which justice could not be done if the case were heard during the war, owing, for instance, to the impossibility of obtaining evidence, aud it seems desirable that the decision on such a point should rest with a judicial tribunal and not with the executive. It is possible that the Court already has inherent jurisdiction in the matter but it seems advisable to give it express jurisdiction,
The same remarks apply to clause 4, which amends the section of Ordinance No. 11 of 1915 which deals with the staying of actions brought against alien enemies. This clause also extends that section to all legal proceedings including arbitrations.
Clauses 5 and 6 are intended to dispel possible doubts as to the existence of powers which have beeu, or may have to be, assumed. It will be noticed that the liquidators are declared to have power to transfer the property of the persons whose affairs they are winding up whether they can or can not produce the documents of title relating to such property,
Clause 7 expressly provides that a liquidator's powers pass to his successors in office.
Clause 8 provides that liquidators shall be at liberty to distribute the assets in the first instance on the footing that no interest accrues on any debt after the commence- ment of the winding up. This provision has been borrowed from the law relating to bankruptcy. The clause does not take away the right of the creditor to interest, if his debt carries interest, and any surplus assets may be applied in payment of such interest. The rights of secured ereditors are saved.
Clause 9 provides that unsecured debts payable to cre- ditors who are not enemies or enemy subjects shall take priority over unsecured debts payable to creditors who are enemies or enemy subjects.
Clause 10 introduces a power of disclaimer, modelled on the power of disclaimer in bankruptcy, which may be made use of in the case of any leases which the liquidators have been unable to deal with otherwise. Any person injured by the disclaimer will be treated as a creditor of the alien enemy to the extent of such injury, and a right to obtain the decision of the Court on the amount of damage suffered is recognised. It will be noticed that sub-clause (3) pro- vides that where a liquidator has sub-let the premises with the cousent of the lessor the latter shall not be entitled to distrain on such premises except for the rent payable under the sub-lease, and shall not be entitled to re-enter except for breach of some covenant contained in the sub- lease.
Clause 11 provides machinery for compelling secnred creditors to realise their securities. On such realisation the secured creditor is to retain the amount to which he is entitled under the terms of the security and is to pay the balance to the liquidator. In case of dispute as to the amount to which the securel creditor is entitled the latter has a right to a decision of the Court on the point. It is of course possible that in some cases, owing to contingent liabilities, it will not be possible at present to define exactly the amount to which the secured creditor is entitled, aud in such cases it may be necessary that the total proceeds should continue to be held by the secured creditor, if the total liability, ascertained and contingent, exceeds the amount of the proceeds.
Clause 12 provides for the enforcement of orders made by the Court on applications for directions,
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