283. Appropriation

(1) Without prejudice to the foregoing Sections of this Part 7 (Financial Markets and Netting), if the collateral arrangement provides for realisation by appropriation of the collateral the subject of such arrangement, then the collateral-taker may so realise the collateral in accordance with the terms of the applicable netting agreement without any order for foreclosure from the Court, as the collateral-taker's own property and setting off its value against, or applying its value in or towards the discharge of, the relevant obligations.
(2) Upon the exercise by the collateral-taker of the power to appropriate the collateral, the equity of redemption of the collateral-provider shall be extinguished and all legal and beneficial interest of the collateral-provider in the collateral shall vest in the collateral-taker.
(3) Upon the exercise by a collateral-taker of the power to appropriate the collateral in accordance with subsection (1), the collateral-taker must value the collateral in accordance with the terms of the arrangement and in any event in a commercially reasonable manner.
(4) Where a collateral-taker exercises such a power and the value of the collateral appropriated differs from the amount of the relevant obligations, then as the case may be, either —
(a) the collateral-taker must account to the collateral-provider for the amount by which the value of the collateral exceeds the relevant obligations; or
(b) the collateral-provider will remain liable to the collateral-taker for any amount by which the value of the collateral is less than the relevant obligations.