10 - Discharge from the Scheme
10.1 A Contract will be discharged from the Scheme when one or more of the following applies:
10.1.1 On the third Fee Date following the first opening of a Contract Account, no deposit has been made in respect of that Contract Account;
10.1.2 The parties to the Contract mutually agree to withdraw from the Scheme and provide us (either jointly or each separately) with written notice of this agreement;
10.1.3 All funds held within the relevant Contract Account have been distributed to the parties (subject to any deductions we may be entitled to make under these Rules) and Rule 3.28 or 4.23 applies;
10.1.4 Deductions for our costs in accordance with Rule 8 reduce the balance of the Contract Account to nil, provided that we will follow the procedure in Rules 8.7 and 8.8.
10.1.5 We have reasonable grounds to suspect unauthorised or fraudulent activity in respect of the Contract Account;
10.1.6 Either party to the Contract breaches these Rules, and does not remedy the breach within five Business Days of receipt of written notice from us specifying the breach and requiring its remedy;
10.1.7 The continued inclusion of the Contract within the Scheme would breach any law in force in the United Kingdom from time to time, or either party to the Contract becomes, or in our reasonable opinion may become subject to Sanctions (and in this regard we will be entitled to act upon the instructions of any national criminal enforcement agency or regulatory body without reference to the parties, and we will incur no liability to the parties for doing so);
10.1.8 We become entitled to distribute any funds held in the relevant Contract Account under the expiry provisions in Rule 12; or
10.1.9 The government of the United Kingdom brings into force any law or regulation that would render the continued operation of the Scheme illegal, or a court or tribunal of competent jurisdiction in England and Wales hands down a judgment that the continued operation of the Scheme is in breach of any existing provision of English and Welsh Law.
10.2 Where a Contract is discharged from the Scheme under Rule 10.1.2 we will distribute any cash held on deposit within the Contract Account according to the directions of the parties. If we do not receive any such directions within 5 Business Days of receipt of the parties’ notice or notices, will retain any funds held in the Contract Account until we are able to determine the appropriate course of action. In such circumstances we will be entitled to make any reasonable determination as to where and to whom we should release the retained funds and will incur no liability to the parties.
10.3 Where a Contract is discharged from the Scheme under Rule 10.1.6, we will distribute any funds held in the Contract Account to the party that is not in default at the time the Contract is discharged. The parties’ rights against each other under the Contract in respect of the Retention will be unaffected.
10.4 Where a Contract is discharged from the Scheme under Rules 10.1.5, 10.1.7 or 10.1.9, we will retain any funds held in the Contract Account until we are able to determine the appropriate course of action. In such circumstances we will be entitled to make any reasonable determination as to where and to whom we should release the retained funds and will incur no liability to the parties.
10.5 Upon discharge of a Contract from the Scheme, these Rules will cease to bind the parties, save that Rules 5, 6, 7, 9, 10.5, 11, 12.3, 13, 14, 16, 17 and 18 will continue to apply after discharge.
10.6 Rules 10.2 to 10.4 are not intended to affect the rights of any third party who might also have a beneficial interest the affected Retention under these Rules. For example, if a Tier 1 Contract is discharged under Rule 10.1.6 because of a breach of these Rules by the Tier 1 Contractor, we will only return parts of the Tier 1 Retention to the Employer that do not also constitute Subcontract Retentions under any linked Subcontracts.