65. Unenforceable Agreements — Breach by Party to the Agreement

Past version: effective up to 17/04/2006
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(1) Subject to Article 65(5), a person who makes an agreement in the course of carrying on a Financial Service in breach of the Financial Services Prohibition shall not be entitled to enforce such agreement against any party (a "relevant party") to the agreement.
(2) Subject to agreement that may otherwise be reached between the parties, a relevant party may apply to the Court to recover:
(a) any money paid or property transferred by him under the agreement;
(b) compensation reflecting any loss sustained by the relevant party as a direct result of such payment or transfer; and
(c) compensation for an amount becoming due that is dependent upon a contingency occurring under the relevant agreement, provided that such contingency shall have occurred prior to the relevant party being notified by the other party or by the DFSA that the agreement has been entered into in breach of the Financial Services Prohibition.
(3) If the relevant party chooses not to perform the agreement or, under Article 65(2), recovers money paid or property transferred by him under the agreement, he shall in turn repay any money or property he has received under the agreement.
(4) The compensation recoverable under Article 65(2)(b) is the amount agreed between the parties to the agreement or, following an application to the Court, the amount determined by the Court.
(5) If the Court is satisfied that the person carrying on the Financial Service reasonably believed that he was not in breach of the Financial Services Prohibition by entering into such agreement, and that it is fair and just in the circumstances to make such an order, it may make one or more of the following orders:
(a) an order that the agreement be enforced between the parties to such extent and under such terms and conditions as the Court sees fit; or
(b) an order that money paid or property transferred under the agreement be retained or dealt with in accordance with the agreement or in such manner as the Court deems fit.
(6) Where property transferred under the agreement has been transferred to a third party, a reference in Article 65 to such property shall be interpreted as a reference to the value of the property at the time of the transfer under the agreement.
(7) In Article 65, "agreement" means an agreement, the making or performance of which constitutes, or is part of, the carrying on of a Financial Service.