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Overseas Investment Act 2005

National security and public order risks management regime - Risk management actions - Statutory management

104: Statutory manager may terminate contracts or arrangements posing significant risk to national security or public order

You could also call this:

"The government can stop a contract if it's a risk to New Zealand's safety or order."

Illustration for Overseas Investment Act 2005

If you are under statutory management, the statutory manager can cancel a contract or arrangement if they think it poses a significant risk to national security or public order. The statutory manager can do this if they consider the contract or arrangement is likely to cause problems. When a contract or arrangement is cancelled, you are no longer responsible for performing it and you will not be liable for not performing it.

If the statutory manager cancels a contract or arrangement, the other party involved can apply to the court for compensation. You must receive notice of the cancellation before the other party can apply for compensation. The other party has three months to apply to the court after they receive notice of the cancellation.

The court will decide if compensation is fair and reasonable, considering what you gave to the other party, what you received from them, and how both parties behaved. The court's decision is based on these factors to ensure a just and reasonable outcome.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS358925.

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Part 3National security and public order risks management regime
Risk management actions: Statutory management

104Statutory manager may terminate contracts or arrangements posing significant risk to national security or public order

  1. If the statutory manager considers that a contract or an arrangement entered into by the person under statutory management gives rise, or is likely to give rise, to a significant risk to national security or public order, the statutory manager may cancel that contract or arrangement.

  2. If a contract or an arrangement is cancelled under this section,—

  3. the person under statutory management is discharged from the further performance of the contract or arrangement and from all liabilities for subsequent non-performance of the contract or arrangement; and
    1. the other party to the contract or arrangement may apply to the court for compensation in respect of the contract or arrangement.

      1. An application under subsection (2)(b) must be made within 3 months of the person receiving notice of the cancellation.

      2. The court may award any compensation that it considers just and reasonable, having regard to—

      3. the value of the consideration provided by the person; and
        1. all amounts and benefits that the person has received under the contract or arrangement; and
          1. the conduct of the parties.

            Notes
            • Section 104: inserted, on , by section 52 of the Overseas Investment (Urgent Measures) Amendment Act 2020 (2020 No 21).