11. Payment System Rules of Designated Payment Systems valid and enforceable

(1) The Payment System Rules of a Designated Payment System are valid and enforceable despite any enactment or rule of law to the contrary.

(2) However, subsection (1) applies only to the extent that the Payment System Rules of the Designated Payment System provide for or in relation to the following:

• (a) the basis on which Payment Instructions are given;
• (b) the basis on which payments are calculated;
• (c) the basis on which Settlements are effected (including whether on a gross basis or using Netting);
• (d) the basis on which Collateral Security is to be provided in connection with the payment system;
• (e) the action to be taken if:

(i) a participant in the payment system is unable, or likely to become unable, to meet the participant’s obligations to any or all of the following:

(A) an operator of the payment system;

(B) another participant in the payment system;

(C) any other party to the Payment System Rules; or

(ii) an operator of the payment system is unable, or likely to become unable, to meet the operator’s obligations to any or all of the following:

(A) participant in the payment system;

(B) any other party to the Payment System Rules. including, for example, any action to be taken for the realisation and disposal of any applicable Collateral Security.

(3) The claim of the secured parties to any Collateral Security provided in connection with the Designated Payment System rank, and must be paid, in priority to the claims of all other Persons despite any enactment or rule of law to the contrary, unless the terms on which the Collateral Security was provided expressly provide that the other Persons are to be paid in priority.

12. Settlements and provision of Collateral Security must not be reversed etc.

(1) A Settlement, or the provision or enforcement of Collateral Security that is effected under the Payment System Rules of a Designated Payment System must not be reversed, repaid, recovered or set aside, whether in whole or part, despite any enactment or rule of law to the contrary.

(2) A claim or right arising, or an account or other record maintained, under the Payment System Rules of a Designated Payment System must not be attached, charged, assigned, executed on, distrained, or otherwise made the subject of an adverse legal process despite any enactment or rule of law to the contrary, unless expressly permitted by the Payment System Rules.

(3) Any application made to the Designated Payment System or the Court by a court, a Liquidator, a creditor, or another interested Person, from a Jurisdiction outside the AIFC, if the application relates to an Insolvency Proceeding or debt recovery proceeding in that Jurisdiction and the purpose of the proceeding is:

• (a) to obtain the reversal, repayment, recovery or setting aside of a Settlement, or the provision or enforcement of Collateral Security, whether in whole or part; or
• (b) to attach, charge, assign, execute on, distrain, or otherwise make the subject of an adverse legal process, any claim or right arising, or any account or other record maintained, under the Payment System Rules of the payment system, unless expressly permitted by the Payment System Rules, does not override subsections (1) and (2).

13. Limits on application of section 12(1)

(1) Section 12(1) (Settlements and provision of Collateral Security must not be reversed etc.) does not apply to a Settlement, or the provision of Collateral Security, that is effected under the Payment System Rules of a Designated Payment System if:

• (a) a participant in the payment system in respect of which the Settlement is effected becomes insolvent under the insolvency laws applying in the Jurisdiction where the participant is incorporated or otherwise formed; and
• (b) the Settlement, or the provision of Collateral Security, is effected after the commencement of an Insolvency Proceeding in respect of the participant, unless the Designated Contact did not have notice of the commencement of the Insolvency Proceeding when the Settlement, or the provision of Collateral Security, was effected.

(2) For subsection (1):

• (a) a Settlement, or the provision of Collateral Security, is treated as effected when, in accordance with the Payment System Rules of the Designated Payment System, the relevant Payment Instruction or Collateral Instruction is incapable of being revoked by any party to the rules; and
• (b) a Designated Contact is taken to have notice of the commencement of an Insolvency Proceeding if, for example:

(i) the Designated Contact Fails to make any inquiries into the matter that an honest and reasonable Person would have made in the circumstances; or

(ii) the Designated Contact Fails to have regard to any public notice of the commencement of an Insolvency Proceeding that an honest and reasonable Person would have had regard to in the circumstances (including the place where, and how, the public notice was given and the location of the Designated Contact).

14. Netting valid and enforceable

If the Payment System Rules of a Designated Payment System provide for Netting, any Netting under the Payment System Rules is valid and enforceable despite any enactment or rule of law to the contrary.

15. Limits on effect of sections 11, 12 and 14

(1) Sections 11 (Payment System Rules of Designated Payment Systems valid and enforceable), 12 (Settlements and provision of Collateral Security must not be reversed etc.) and 14 (Netting valid and enforceable) do not prevent:

1. (a) the operation of any enactment or rule of law in relation to an underlying transaction (including, for example, any relevant provisions of the AIFC Insolvency Regulations); or
2. (b) any Person from taking action against another Person who has acted fraudulently or dishonestly if the remedy sought or obtained does not affect the application of those sections.

(2) If a Person brings an action under any enactment or rule of law in relation to an underlying transaction (including, without limitation, any relevant provisions of the AIFC Insolvency Regulations), the Person may produce evidence of a settlement before the Court for the purpose of proving that:

1. (a) a participant received value by means of the settlement; and
2. (b) the value received was an element of the underlying transaction.

(3) In this section: underlying transaction means a transaction that gives rise to a payment or payment obligation, but does not include:

1. (a) a Payment Instruction; or
2. (b) a Settlement in accordance with the Payment System Rules of a Designated Payment System.