Companies Act 2014 section 451

Court's power to stay proceedings or restrain further proceedings

Section 451 gives the court the power to pause or prevent legal proceedings against a company when a scheme of arrangement meeting has been convened or an application to convene such a meeting has been made.

• When a scheme of arrangement meeting is convened by the directors or when an application is made to the court to order such a meeting, the court gains the power to intervene in other legal proceedings against the company.
• The court may, on whatever terms it considers fair, put a hold on all existing proceedings or prevent any further proceedings from being taken against the company for whatever period it considers appropriate.
• An application to the court for such a stay or restraint can be made by the company itself, its directors, any creditor or member of the company, or, where the company is being wound up, its liquidator.
• This protection allows a company engaged in a scheme of arrangement process to have breathing space from litigation while the scheme is being considered and progressed.