Insolvency Set Off

In the event of Administration (Rule 2.85 Insolvency Rules 1986) or Liquidation (Rule 4.90 Insolvency Rules 1986) of a company an account shall be taken of what is due from each party to the other in respect of mutual dealings, and the sums due from one party shall be set-off against the sums due from the other and only any balance owed by the company is provable in the Administration or the Liquidation (as applicable) of the company. Insolvency set off is mandatory and cannot be excluded by agreement of the parties.

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