"Winding Up Acts" Result In Net Gain

The Companies (Winding Up Amendment) Act 2011 and the International Business Companies (Winding Up Amendment) Act 2011 (the "Winding Up Acts") have introduced statutory provisions which ensure that netting agreements will be enforceable in the event that a party to such an agreement fails and is placed in liquidation. At the same time, the Winding Up Acts have extended the scope of netting which will be permissible in the winding up context.

Netting Explained

A netting agreement is a contract whereby each party agrees to set off (i.e. 'net out') the amounts that it owes against amounts owed to it. Netting agreements can be either bilateral, i.e. between two parties, or multilateral, involving several parties.