[F1(1A)If on an application made to the High Court by petition presented—

(a)by the Secretary of State [F2(after consulting the Assembly)]; or

(b)with the consent of the Secretary of State [F3(after consulting the Assembly)], the Authority,

the Court is satisfied in relation to any company which is a [F4qualifying water supply licensee or qualifying sewerage licensee] that any one or more of the grounds specified in subsection (2) below is satisfied in relation to that company, that Court may make a special administration order in relation to that company.]

[F5(1B)Before presenting a petition under subsection (1A) in relation to a qualifying water supply licensee whose licence gives it a supplementary authorisation, the Secretary of State or the Authority (as the case may be) must consult the Welsh Ministers.]

(2)The grounds mentioned in [F6subsections (1) and (1A)] above are, in relation to any company—

(a)that there has been, is or is likely to be such a contravention by the company of any principal duty, not being a contravention in respect of which a notice has been served under subsection (3) of section 19 above, as is serious enough to make it inappropriate for the company to continue to hold its appointment [F7or licence];

(b)that there has been, is or is likely to be such a contravention by the company of the provisions of any enforcement order which—

(i)is not for the time being the subject-matter of proceedings brought by virtue of section 21(1) above; and

(ii)if it is a provisional enforcement order, has been confirmed,

as is serious enough to make it inappropriate for the company to continue to hold its appointment [F7or licence];

[F8(bb)in the case of a company which is a [F9qualifying water supply licensee], that—

(i)action taken by the company has caused a contravention by a water undertaker of any principal duty; and

(ii)that action is serious enough to make it inappropriate for the company to continue to hold its licence;]

[F10(bc)in the case of a company which is a qualifying sewerage licensee, that—

(i)action taken by the company has caused a contravention by a sewerage undertaker of any principal duty; and

(ii)that action is serious enough to make it inappropriate for the company to continue to hold its licence;]

(c)that the company is or is likely to be unable to pay its debts;

(d)that, in a case in which the Secretary of State has certified that it would be appropriate, but for section 25 below, for him to petition for the winding up of the company under [F11section 124A of the Insolvency Act 1986] (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 if it did not hold an appointment under Chapter I of this Part or was not a [F12qualifying water supply licensee or a qualifying sewerage licensee]; or

(e)[F13in the case of a company holding an appointment under Chapter 1 of this Part,] that the company is unable or unwilling adequately to participate in arrangements certified by the Secretary of State or the Director to be necessary by reason of, or in connection with, a proposal for the making by virtue of section 7(4)(c) above of any appointment or variation replacing a company as a relevant undertaker.

(3)Notice of any petition under this section for a special 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 M1Insolvency Act 1986 (“the 1986 Act”); and no such petition shall be withdrawn except with the leave of the High Court.

F14(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)For the purposes of this section a company is unable to pay its debts if—

(a)it is a limited 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 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).

[F15(7)In this section “principal duty” means—

(a)in relation to a company holding an appointment under Chapter 1 of this Part, a requirement imposed on the company by section 37 or 94 below;

(b)in relation to a company which is a [F16qualifying water supply licensee or a qualifying sewerage licensee], any condition of its licence or any statutory requirement imposed on it in consequence of its licence.]