ADM International SARL v Grain House International SA
[2023] EWHC 135 (Comm)
ADM International SARL v Grain House International SA & Anor
25 January 2024
[2024] EWCA Civ 33
Court of Appeal
A Moroccan company and its boss didn't follow court orders in England. The judge found them guilty and gave them a fine and jail time. The appeals court agreed on some of the guilt but said the judge misunderstood a key order, reducing the punishment.
Key Facts
- •ADM International SARL (ADM), a Swiss agricultural products company, obtained a GAFTA arbitration award against Grain House International S.A. (GHI), a Moroccan company, for US$3,423,711.14 plus interest.
- •GHI failed to comply with an Asset Disclosure Order (ADO) and a Worldwide Freezing Order (WFO) issued by the English High Court.
- •ADM brought contempt proceedings against GHI and its CEO, Mr. Boutgueray, for non-compliance with the court orders.
- •The High Court found GHI and Mr. Boutgueray in contempt of court on four counts and imposed a fine and imprisonment.
- •GHI and Mr. Boutgueray appealed the findings of contempt and the sentences imposed.
Legal Principles
Principles of contempt of court, including the mental element required for civil and criminal contempt.
Masri v Consolidated Contractors Intl Co SAL & Ors [2011] EWHC 1024 (Comm) at [144]-[147]; Seaward v Paterson [1897] 1 Ch 545, 555-6; Attorney-General v Times Newspapers Ltd [1992] 1 AC 191, 218-9; Sectorguard Plc v Dienne Plc [2009] EWHC 2693 (Ch) at [32]; Attorney-General of Tuvalu v Philatelic Distribution Corp Ltd [1990] 1 WLR 926; Dar Al Arkan v Refai [2014] EWCA Civ 715; JSC BTA Bank v Ablyazov (No 10) [2015] UKSC 64; JSC BTA Bank v Ablyazov (No 10) [2013] EWCA Civ 928.
Construction of court orders, particularly ambiguous orders, and the relevance of the defendant's understanding.
Redwing v Redwing Forest Products Ltd [1947] RPC 67; Federal Bank of the Middle East v Hadkinson [2000] 1 WLR 1695; Michael Wilson & Partners Ltd v Emmott [2015] EWCA Civ 1028; A-G v. Punch Ltd [2003] 1 AC 1046; Aspinall’s Club Ltd v Lim [2019] EWHC 2379 (QB).
Liability of directors and officers for contempt of court orders made against a corporation.
Attorney General of Tuvalu v Philatelic Distribution Corp Ltd [1990] 1 WLR 926; Dar Al Arkan Real Estate Development v Al-Refai [2014] EWCA Civ 715; Olympic Council of Asia v Novans Jets LLP [2023] EWHC 276 (Comm); Common Law Procedure Act 1860; Rules of the Supreme Court; Civil Procedure Rules.
Principles governing appeals against sentence in contempt cases.
Financial Conduct Authority v McKendrick [2019] EWCA Civ 524; JST BTA Bank v Solodchenko (No 2) [2011] EWCA Civ 1241.
Outcomes
Appeal allowed in part.
The Court of Appeal found that the High Court had erred in its construction of the ADO, holding that "value" meant market value, not unencumbered value. The Court also addressed the issue of director liability for corporate contempt, confirming the continued existence of this principle despite changes to the Civil Procedure Rules. The sentences were adjusted accordingly.
Contempt finding on Contempt 3 (failure to disclose encumbrances) quashed.
The Court of Appeal found that the ADO was ambiguous and that the lower court had incorrectly interpreted 'value' to mean unencumbered value rather than market value.
Fine reduced from £75,000 to £50,000.
Reduction reflects the successful appeal on Contempt 3 and application of the principle of totality in sentencing.
Imprisonment for Mr. Boutgueray on Contempt 3 quashed.
This followed the quashing of the contempt finding on Contempt 3.
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