Corporations Act 2001

The Court may order that one or more rights under a contract, agreement or arrangement are enforceable against a body only:

with the leave of the Court; and

in accordance with such terms (if any) as the Court imposes.

The order could be sought for a right to terminate for convenience.

The Court may make the order (the stay order) if:

the body is the subject of any of the following:

an announcement referred to in paragraph 415D(1)(a);

an application under section 411 (the section 411 application);

a compromise or arrangement approved under this Part as a result of a section 411 application; and

the Court is satisfied that:

the rights are being exercised; or

the rights are likely to be exercised; or

there is a threat to exercise the rights;

an application for the stay order is:

if the body has made an announcement referred to in paragraph 415D(1)(a), but not yet a section 411 application—made by the body; or

if the body has made a section 411 application, but a resulting compromise or arrangement is yet to be approved under this Part—included in the section 411 application; or

if a compromise or arrangement has been approved under this Part as a result of the section 411 application—made by the person appointed to administer the compromise or arrangement; and

in a case where the body has made a section 411 application—the section 411 application states it is being made for the purpose of the body avoiding being wound up in insolvency.

A stay order must specify the period for which it applies. In working out the period, the Court must have regard to:

subsections 415D(2), (3) and (4); and

the interests of justice.

Subsection (1) does not apply to a right referred to in subsection 415D(6) or (8).

Before deciding an application for a stay order, the Court may grant an interim order for one or more rights under a contract, agreement or arrangement not to be enforced against a body.

The Court must not require an applicant for a stay order to give an undertaking as to damages as a condition of granting an interim order.