Australia: Members' schemes of arrangement - overview of the court approval process

Last Updated: 19 April 2013
Article by Ian Bloemendal, Dugan Cunningham and Will LeMass

Most Read Contributor in Australia, November 2017

Key Points:

Preparation is key, as the court can sometimes have concerns if the supporting affidavit material contains a number of errors and/or is incomplete.

A members' scheme of arrangement involves an agreement which affects the rights and obligations of a company and its shareholders. It is a process commonly used in the Mergers & Acquisitions area to acquire all of the shares in a target company. The term "arrangement" is one that can cover a range of matters including:1

  • corporate reconstruction or reorganization, which may involve an amalgamation or merger of companies;
  • de-mutualisations;
  • the de-merger or break up of a company or a corporate group; and
  • changes of control that are functionally equivalent, and therefore an alternative, to a takeover bid.

This article provides an overview of the steps associated with the court approval process for a members' scheme of arrangement that seeks to effect a change of control (as an alternative to a takeover bid). It will also identify some practical tips that may be useful when involved with such an application.

The nature and purpose of a members' scheme

A members' scheme is a commonly used mechanism to effect structural change within a company or achieve change of corporate control of a target company. Schemes are an alternative to takeover bids under Chapter 6 of the Corporations Act 2001 and involve the drafting of an agreement that provides for all of the shares in the company being transferred for a set price or exchanged for shares in the acquiring company.

The primary advantages of using a members' scheme to achieve control of a target company are:

  • it avoids the need for numerous agreements between the parties that would otherwise be necessary to achieve the same outcome;
  • it can provide greater certainty concerning both the timing and outcome of the proposal, subject to court approval;
  • it has a lower threshold for approval than a takeover bid; and
  • if approved by the statutory majorities and by the court, the scheme is binding on those members who voted against the scheme.

The steps associated with the court approval process

The steps associated with the court approval process for a members' scheme of arrangement are identified in Part 5.1 of the Act, beginning at section 411. Those steps can be summarised as follows:2

  • A draft notice to convene a meeting of members and an explanatory statement in relation to the proposed scheme of arrangement is prepared – with notification to the Australian Securities and Investments Commission ("ASIC");
  • An application is made to the court to convene a meeting (or meetings if there is more than one class) of members. At this hearing (the "First Court Hearing") the court will assess whether the relevant threshold considerations have been met (eg., whether the scheme documents provide sufficient disclosure of material matters to members, whether ASIC has received sufficient notice, whether ASIC has any objections at that stage). If satisfied, the court will order that a meeting of the members affected by the scheme be convened (the "Court Ordered Meeting");
  • At the Court Ordered Meeting the "classes" of members will either vote for/against or abstain from voting on a resolution about the proposed scheme. For the scheme to proceed it must be approved by the requisite majorities of registered members set out in section 411(4)(a)(ii) of the Act (described in more detail below);
  • If the scheme is approved by the requisite majorities at the Court Ordered Meeting, application is then made to the court to approve the scheme (the "Second Court Hearing"). If the court is satisfied that the voting and other procedural requirements have been met, the court may exercise its discretion to reject or approve the scheme (with or without alteration) or withhold approval until all conditions precedent to implementation have been fulfilled)3; and
  • The court order is then lodged with ASIC (together with a copy of the company's constitution, unless dispensed with by the court order).

Step 1 – The First Court Hearing

Preparation

To be able to proceed with an application at the First Court Hearing, the Applicant for the order approving the members' scheme (normally the target company) should address the following important matters in advance of the date set for hearing:

  • A draft explanatory statement about the proposed scheme that will accompany the notice of the Court Ordered Meeting to members should be prepared well in advance (the draft explanatory statement is discussed further below);
  • If applicable, the proposed scheme should carefully assess any 'lock up' devices (such as any "break fees" payable in the event that the scheme does not proceed and 'no shop' and 'no talk arrangements' to prevent discussions or negotiations with third parties during the period of the agreement) involving the target company, and ensure that they are reasonable, prominently stated and do not inhibit the directors discharging their duties;
  • The draft explanatory statement should be provided to ASIC well ahead of the date anticipated for the First Court Hearing. This is because ASIC must be provided with a reasonable opportunity to examine the terms of the explanatory statement and comment on it. A period of 14 days is the bare minimum time required by ASIC to allow it to examine the draft explanatory statement and the terms of the proposed scheme. If possible, greater time should be allowed. If ASIC has been afforded sufficient time, it will generally provide a written statement regarding its views in relation to the proposed scheme prior to the First Court Hearing. Before providing this statement to the court, ASIC may suggest amendments to the draft explanatory statement and make enquiries about the terms of the proposed scheme. Plenty of time should be built into the process if possible, to make sure this essential step can be completed properly;
  • Whether there are any distinct "classes" within the members of the target company that need to be dealt with for the purposes of the Court Ordered Meeting. The most commonly used definition of a "class" in the context of a scheme of arrangement is "those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest".4 Where more than one class of members is ascertained, steps should be taken to ensure that the votes of each class can be identified and calculated separately. (In this context, separate meetings may be ordered by the Court);
  • Originating process should be filed in the relevant court5 along with the supporting affidavit material that the Applicant intends to rely upon at the hearing (including a copy of ASIC's written statement mentioned above and the affidavit from the expert attaching his/her report which contains an opinion as to why the proposed scheme is in the best interests of the members of the target company); and
  • Generally speaking, ASIC must also be given 14 days' notice of the First Court Hearing (this can be overcome if ASIC or the court permit a lesser amount of notice), so prompt service of court documents on ASIC is important.

The Hearing

At the First Court Hearing the court undertakes its "supervisory jurisdiction"6 to review both the proposed scheme and the explanatory statement and to raise any queries with the Applicant. The court's role is "to review the merger proposal, not on its merits or for its commerciality, but to ensure that the explanatory statement presents a fair picture of the proposal and will allow members a fair consideration."7

In order to convene a meeting of members in relation to the scheme, the Court will need to be satisfied that the following requirements are met:8

  • the proposal fits within the statutory concept of an "arrangement";
  • the level of disclosure in the draft explanatory statement is adequate; and
  • the scheme was so conceived and presented as to its structure, purpose and effect that there is no apparent foreseeable reason why it should not receive the court's approval if the majority of members vote in favour of it.

The latter requirement noted above requires the court to make a preliminary assessment of whether or not the scheme is capable of approval. This requirement has been described as:

"...the scheme is of such a nature and cast in such terms that, if it receives a statutory majority at the creditors' meeting the court would be likely to approve it on the hearing of a petition which is unopposed."9

Submissions at the First Court Hearing should therefore be directed to satisfying the court that, so long as the procedural requirements are met, the scheme is one which is likely to be approved by the court at the Second Court Hearing. (The court may refuse to order that the relevant meetings be convened on the basis that the proposed scheme is unlikely to be approved, even if the procedural requirements are met).10

Importantly, at both court hearings there is an ex parte duty of disclosure which falls on the Applicant and its counsel that requires them to bring to the court's attention all matters that could be considered relevant to the exercise of the court's discretion.11 Broadly speaking, matters which fall for disclosure in accordance with this duty include:

  • jurisdictional issues – that is, what is necessary to create the jurisdiction for the court to make the orders sought;
  • transactional type issues – for example, whether there are any novel structures in the scheme or its associated transactional documents; and
  • procedural issues – that is, matters which have arisen in the scheme which depart from normal procedure.

Orders

If the requirements for the First Court Hearing are met, the orders made by the court will generally address the following:

  • the Applicant being directed to convene the Court Ordered Meeting;
  • the appointment of the Chairman of the Court Ordered Meeting;
  • the granting of power to the Chairman to adjourn the Court Ordered Meeting;
  • (if relevant) the manner in which to deal with the vote of distinct "classes" of members;
  • the amended form of the advertisement advising of the date of the Second Court Hearing (if required); and
  • the approval of the draft explanatory statement for distribution to members.

Tips for successfully navigating the First Court Hearing

Don't run the scheme process on a too short or optimistic timeframe.

Make sure that ASIC is given plenty of time to review the draft explanatory statement and is promptly served with any court material. It has an active review function to perform and therefore sufficient time should be allowed to address any disclosure or other concerns it might raise with respect to the scheme.

Take a conservative approach to identify any matters that are likely to be subject to the duty of disclosure and discuss them carefully with Counsel so that, if required, they can be dealt with prior to or at the First Court Hearing.

Ensure that any break fee or no shop/no talk arrangements are within the scope of the matters set out in the Takeovers Panel, Guidance Note 712 and those previously approved by the courts.

Invest time and resources in preparing and carefully reviewing complete affidavit/s in support of the application at the First Court Hearing. (The court can sometimes have concerns about an application at the First Court Hearing if the supporting affidavit material contains a number of errors and/or is incomplete).

Step 2 – The Court Ordered Meeting

The statutory majorities

One of the requirements13 for a members' scheme of arrangement to be binding is that the Court Ordered Meeting must be held where a resolution in favour of the scheme is passed by:

  • (unless the Court orders otherwise) a majority of members (or members in a class) present and voting (either in person or by proxy); and
  • 75% of the votes cast on the resolution (if the body has a share capital).

Disclosure before the Court Ordered Meeting

A notice convening the Court Ordered Meeting must be provided to members and be accompanied by a copy of the explanatory statement. As noted above, the explanatory statement is normally approved for distribution to members at the First Court Hearing.

Broadly, the explanatory statement must explain the effect of the scheme, the material interests of any of the directors in the scheme and any other information that is material to a member's decision as to whether or not to vote or abstain from voting on the resolution about the scheme.14 The explanatory statement should include the prescribed information and any other information within the knowledge of the directors that has not previously been disclosed and which is material to the making of a decision by a member whether or not to agree to the arrangement. Information is material if it "would tend to influence a sensible member's decision on whether the scheme is in his interests".15

A target company often retains at least one independent expert to provide a report to be included in the explanatory statement. Ordinarily the expert's report would make an independent recommendation as to whether or not the members should vote in favour of the scheme. ASIC Regulatory Guide 111 provides guidance as to the content of an expert report which is included in an explanatory statement.

The documents required to be sent to members for the purposes of the Court Ordered Meeting are often despatched by a commercial mailing agent. Complete records should be kept by the agent of the whole mailing process so that evidence of it can be produced to the court at the Second Court Hearing (via an affidavit from the person at the agency who had control of that process).

Sections 412(6) and (8) of the Act provide that, if the scheme is not a creditors' scheme, the explanatory statement must also be registered with ASIC. Listed companies also have additional disclosure requirements under the Australian Stock Exchange Listing Rules16 and must also notify the ASX of the application to the Court to approve the scheme.

Practical matters

The business of the Court Ordered Meeting is normally run by the Chairman of the Meeting who is appointed at the First Court Hearing. A running sheet for the Chairman assists with the efficient flow of business at the meeting.

The admission of registered members to the Court Ordered Meeting along with the essential task of collecting and counting of votes (including proxies) in relation to the scheme resolution is often dealt with by staff from the Company's share registry and the Chairman will commonly appoint one of those staff members to be the returning officer.

The work that is undertaken by the share registry staff should be closely recorded as it will almost certainly be necessary to provide detailed information about the conduct of the meeting to the court at the Second Court Hearing.

Procedural errors in relation to the conduct of the Court Ordered Meeting may result in the court refusing to approve the scheme at the Second Court Hearing.

Tips for successfully navigating the Court Ordered Meeting

It is recommended that an experienced commercial mailing agent be engaged to despatch documents for the Court Ordered Meeting to members (particularly if the volume of material is large). Make sure that the agency staff are well aware of the likely need to provide affidavit evidence about their work for the purposes of the Second Court Hearing, and that adequate records are kept of the steps and times associated with the despatch task.

Provide the Chairman of the Court Ordered Meeting with a running sheet so that the business of the Court Ordered Meeting flows efficiently. (It may also assist with guidance if it is anticipated that any particular interest groups might have particular agendas).

Engage an experienced share registry for the Court Ordered Meeting to deal with such matters as admission of members to the Meeting and the collection and counting of votes (including proxies). Again, make sure that its staff are aware of the likely need to provide affidavit evidence about their work for the purposes of the Second Court Hearing.

Step 3 – The Second Court Hearing

Preparation

To be able to proceed with the application at the Second Court Hearing, the Applicant ought to address the following important matters in advance of the date set for hearing:

  • it should be well advanced with its preparation of the draft affidavit material that will be required for the Second Court Hearing (particularly from staff of the commercial mailing agent and the share registry). In practice there is often only a small amount of time between the Court Ordered Meeting and the Second Court Hearing (often as little as two business days), so it is essential that the draft affidavits are as ready and complete as they can be before the meeting occurs;
  • it ought to have published a notice of hearing of the application to approve the proposed scheme.17 The form of the notice of hearing and the timing of its publication (at least 5 days prior to the hearing) are prescribed18 and contemplate the notice being published after the Court Ordered Meeting is held. (If timing is likely to present a problem, due to a short timeframe between the Court Ordered Meeting and the Second Court Hearing, then orders for an amended form of notice of hearing to be published can be sought at the First Court Hearing); and
  • it should promptly provide ASIC with the results of the vote at the Court Ordered Meeting on the resolution about the scheme. Importantly, it should also obtain a statement in writing from ASIC stating that it has no objection to the proposed scheme so that it can be included in the supporting affidavit material for the Second Court Hearing and be used to satisfy the requirements of section 411(17)(b) of the Act. (If a 'no objection' statement is ultimately obtained from ASIC it will preclude the court from considering the takeover avoidance purpose issue under section 411(17)(a), although it might still be considered in the exercise of its general discretion to approve the scheme).19

The Hearing

Generally speaking, where there is an uncontested members' scheme, on proof of procedural fairness, voting regularity, full and fair disclosure and the obtaining of the statutory majorities at the Court Ordered Meeting , an approval order ordinarily follows at the Second Court Hearing.

The approach of the court at the Second Court Hearing can be summarised as follows:20

  • the court has a discretion whether to approve a scheme and is not bound to approve it simply because it made orders for the Court Ordered Meeting to be convened or because the statutory majorities were obtained. A favourable threshold at the Court Ordered Meeting simply provides a threshold before the sanction of the court can be sought. It is at the Second Court Hearing that the court's discretion to approve is relevantly exercised and that the "final determination" is made on the proposed scheme;
  • the court will usually approach the task of deciding whether to approve a scheme on the basis that the target company's members are better judges of what is in their commercial interests than the court;
  • matters considered by the courts are noted as including:21
  • whether the members have voted in good faith and not for an improper purpose;22
  • whether the proposal is at least fair and reasonable so that an intelligent and honest man or woman who was a member of the relevant class, properly informed and acting alone might approve it;23
  • whether the Applicant has brought to the court's attention under its duty of disclosure all information relevant to the exercise of the court's discretion;24
  • whether there has been full and frank disclosure of all information material to the members' decision;25
  • whether minority shareholders would be oppressed by the scheme.26
  • another consideration that is taken into account is whether or not the scheme offends public policy.27

The affidavit evidence relied upon at the Second Court Hearing and the submissions for that hearing should therefore focus on dealing with such matters as:

  • the despatch process to members of the notice of the Court Ordered Meeting and the explanatory statement;
  • the process undertaken to verify the accuracy of the information contained in the explanatory statement that was distributed to members regarding the proposed scheme;
  • the holding of the Court Ordered Meeting: the process undertaken to collate and count votes at the Meeting on the scheme resolution (including proxies) and details of the votes for/against and abstaining on the scheme resolution;
  • the obtaining of a written statement from ASIC confirming that it does not object to the proposed scheme;
  • details of any matters required to be disclosed to the court in accordance with the Applicant's ex parte duty of disclosure; and
  • the form of the orders sought by the Applicant.

Orders

If the requirements for the Second Court Hearing are met, the orders made by the court will generally address the approval of the proposed members' scheme and the lodgement of a copy of the approved scheme with ASIC.

A draft order should be prepared in advance so that it can be quickly finalised and sealed by the court as the target company will often intend to make announcements about the approval of the scheme to the ASX and/or the media.

Tips for successfully navigating the Second Court Hearing

Take steps to ensure that the notice of the hearing to approve the proposed members' scheme is published in a proper form and in accordance with the correct timeframe. Failure to do so is likely to mean that the application to approve the proposed scheme has to be adjourned, which serves only to increase costs and delay the timetable for the implementation of the scheme (if approved).

Make sure that staff from any commercial mailing agent and share registry are (and will be at the relevant time) available to provide a report to you to form the basis of an affidavit containing their evidence of the work they undertook in relation to the scheme. This will assist with the timely preparation of affidavit material for the Second Court Hearing.

Invest the time and resources necessary to be thorough in the preparation of complete affidavits in support of the application at the Second Court Hearing. As with the First Court Hearing, the court can sometimes have concerns if the supporting affidavit material contains a number of errors and/or is incomplete.

Summary for in-house counsel

  • The Court approval process for a members' scheme of arrangement involves the preparation of a draft notice to convene a meeting of shareholders and an explanatory statement to implement the scheme, followed by notification ASIC before any application to the court is filed;
  • it is essential to the success of the application for approval of the proposed scheme that:
  • any 'lock up' devices (such as any "break fees" and "no shop" and "no talk arrangements") be assessed for reasonableness before the draft agreement with the target company is signed;
  • the expert be adequately briefed with all of the information that may affect his/her opinion;
  • the draft explanatory statement set out all material information that may influence a member's opinion as to whether or not the scheme is in their interests;
  • ASIC be given adequate time to review the proposed scheme, suggest any necessary amendments to the draft explanatory statement (and review the company's responses) and provide its confirmation to the court that it has no objection to the proposed scheme;
  • there is often little time between the Court Ordered Meeting and the Second Court Hearing. The preparation of all of the draft affidavits that are anticipated as necessary should be well advanced by the date of the Court Ordered Meeting;
  • experienced commercial mailing agents and share registry staff should be employed to assist with the distribution of documents to members for the Court Ordered Meeting and the collection and counting of votes at the Court Ordered Meeting (including proxies); and
  • be generous with the time and resources necessary to prepare accurate and comprehensive affidavit material required for the First and Second Court Hearings. It is essential to the exercise of the court's discretion that it has full confidence in the fairness and adequacy of the process that has been undertaken by the Applicant.

This article was first published in Inhouse Counsel, July 2012, pp 270 - 276

Footnotes

1 Members' Schemes of Arrangement, Discussion Paper, June 2008, Corporations and Markets Advisory Committee, page 5.

2 See also the comments of Emmett J in Central Pacific Minerals NL [2002] FCA 239 at [6].

3 See Re NRMA Ltd (2000) 33 ACSR 595 at [37] (court not bound to approve simply because requisite majority approved) and Re Westfield Holdings Ltd [2004] NSWSC 602 at [9] (where the court noted the undesirability of approving a scheme where a condition precedent remained unsatisfied and that the exercise of the court's discretion included ensuring that the way was clear in all respects to give effect to the proposal).

4 Sovereign Life Assurance Co v Dodd [1892] 2 QB 573 at 583.

5 The court can be the Federal Court or the Supreme Court of State or Territory – see section 58AA of the Act.

6 Cleary v Australian Co-operative Foods Ltd No 2 (1999) 32 ACSR 701 at paragraph [46]; Cleary v Australian Co-operative Foods Ltd No 3 [1999] NSWSC 1062 at paragraphs [51] and [52].

7 Re Gas2Grid Ltd [2010] FCA 10, per Stone J at [5].

8 Re AMP Ltd (ABN 49 079 519) (2003) 48 ACSR 540.

9 F TEastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR69 at 72.

10 Re NFU Development Trust Ltd [1972] 1 WLR 1548; Re Sonodyne International Ltd (1994) 15 ACSR 494.

11 Re: Permanent Trustee Company Limited [2002] NSWSC 1177, 43 ACSR 601 at paragraph [7]. See also the following cases regarding the general duty of disclosure: Re NRMA Ltd (2000) 33 ACSR 595 at [16]; Re Archaean Gold NL (1997) 23 ACSR 143 at [147]; Re Capel Finance Ltd (2005) 52 ACSR 601 at [7]. Note, there is not a precise degree of uniformity between the disclose requirements of schemes and takeover bids.

12 Fourth Issue, 11 February 2010.

13 Section 411(4)(a)(ii) of the Act.

14 Section 412(1)(a) of the Act.

15 Phosphate Co-operative Co of Australia Ltd v Shears (No 3) (1988) 14 ACLR 323 at 345.

16 See ASX listing rules 7.20 to 7.22.

17 Publication of the notice of hearing is normally once in a daily newspaper circulating in the State or Territory where the target company has its principal place of business; see, for example, rule 2.11 of the Corporations Proceedings Rules; Schedule 1A of the Uniform Civil Procedure Rules 1999 (Qld).

18 See, for example, Form 6 and rule 3.4 of the Corporations Proceedings Rules.

19 See for example - Re Coles Group Ltd (No 2) [2007] VSC 523 at [48] ff.

20 Re Seven Network Ltd No. 3 [2010] FCA 400, 77 ACSR 701.

21 Members' Schemes of Arrangement (December 2009)

22 Re Foundation Healthcare Ltd (No 2) (2002) 43 ACSR 680; In the matter of Michelangelo Limited (No 3) [2006] FCA 1845 at [9].

23 Re Central Pacific Minerals NL [2002] FCA 239 at [10] - [13]; Re BRL Hardy Ltd (2003) 45 ACSR 397 at [21].

24 Re Permanent Trustee Co Ltd (2002) 43 ACSR 601 at [7]; Re Cranswick Premium Wines Ltd (2002) 44 ACSR 113 at 117; Re AMP Ltd [2003] FCA 1465 at [23]; Coates Hire Ltd (No 2) [FCA] 2105 at [7].

25 See Re NRMA Ltd (2000) 33 ACSR 595 at [15] - [19]; Re NRMA Ltd (2000) 34 ACSR 261 at [30]; cf. Re Phosphate Resources Ltd (2005) 56 ACSR 169 (not approved where members did not vote on a fully informed basis).

26 Re Ranger Minerals Ltd (2002) 42 ACSR 582

27 Re Cascade Pools Australia Pty Ltd (1985) 9 ACLR 995; In Re Universal Liquors Pty Ltd (1991) 5 ACSR 104

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions