Court Considers Sanctions for Contempt of Court in Commercial Bank of Dubai PSC v Al Sari: Custodial Sentences and Asset Confiscation Imposed

Introduction

In the High Court of Justice, King’s Bench Division, Business and Property Courts of England and Wales, the case of Commercial Bank Of Dubai PSC & Ors v Abdalla Juma Majid Al Sari & Ors saw considerations for sanctions against several defendants due to contempt of court. Justice Butcher presided over the proceedings, applying well-established legal principles to determine the appropriate sanctions for the contempt found.

Key Facts

The defendants, Abdalla Juma Majid Al Sari and others, were subject to an adjourned hearing to consider sanctions following earlier findings of contempt of court. The initial proceedings found the defendants in contempt for failing to appear or engage with court processes in relations to asset disclosure orders. These orders were part of the Bank’s efforts to enforce a significant judgment against them. Post-judgment on 4 October 2023, new evidence was presented in the form of affidavits attempting to explain the non-attendance and lack of engagement by the first two defendants.

Legal Principles

The central legal principles at play in this case include the parameters set by the Civil Procedure Rules (CPR) for setting aside judgments pursuant to CPR 39.3 and the appropriate responses to contempt of court. The court’s scrutiny centered around whether the defendants acted with appropriate promptness, had valid reasons for non-attendance, and could present a reasonable prospect of success at trial. Moreover, the court addressed the credibility and reliability of affidavit evidence, weighing it against historical actions and other case evidence which indicated a pattern of evasive behavior by the defendants.

The court referenced McKendrick v The Financial Conduct Authority [2019] 4 WLR 65 for guidance on breaches of asset disclosure orders, emphasizing the need for custodial sentences in serious instances of contempt and underscoring the requirement for custodial sentences to reflect the gravity of such offences. It was also made clear that any mitigating factors would need to be substantial to prevent a custodial sentence.

Justice Butcher also touched upon the principle of proportionality, indicating that sentences should be the minimum necessary to reflect the seriousness of the contempt, with portions of sentences specifically earmarked as punitive or coercive in nature.

The issue of the defendants’ evasion of earlier legal processes, such as avoiding service of proceedings, related back to principles discussed in RBS v FAL Oil [2012] EWHC 3628 (Comm), highlighting a consistent disregard for legal obligations imposed by the court.

Outcomes

The outcomes were clear in their differentiation between individual and corporate defendants. The first to third individual defendants received custodial sentences with justification given for the term lengths, which were 24 months for the first two defendants (18 months punitive, 6 months coercive) and 21 months for the third (15 months punitive, 6 months coercive), with stipulations regarding the earliest possible release.

For the corporate defendants (fourth to sixth), the sanction was the confiscation of any property they hold within the jurisdiction. The court allowed the possibility of appeal for all defendants, specifying the protocol and timeframe for initiating an appeal process.

Conclusion

Justice Butcher’s ruling serves as a stark reminder of the repercussions of contempt of court when it comes to compliance with court orders in the UK judicial system. The structured analysis provided by the judgment reflects the courts’ stringent enforcement of disclosure orders, the thorough evaluation of defendants’ behavior and evidence, and the imposition of sanctions aligned with the gravity of non-compliance and evasion. The ruling upholds the principle that parties must engage honestly and promptly with the court, or face serious consequences, including imprisonment and the potential confiscation of assets.