Corporate Insolvency and Governance Bill 2019-20: Ipso Facto Provisions

The Corporate Insolvency and Governance Bill 2019-20, published during the COVID-19 pandemic, contains far-reaching reforms to the insolvency regime under the Insolvency Act 1986. We consider an area which will have a material impact on many commercial contracts: the introduction of restrictions on ipso facto clauses – provisions permitting a party to terminate a contract upon the counterparty suffering an insolvency event – in supply contracts, as well as wide-ranging restrictions on the ability of a supplier to exercise certain other rights after a company becomes subject to a relevant insolvency procedure.