25/07/2024
Directors Held Accountable for Corporate Contempt
πΊADM International SARL v Grain House International SA & Anor (Rev1) [2024] EWCA Civ 33
π¨ββοΈLord Justice Singh
π¨ββοΈLord Justice Popplewell
π¨ββοΈLord Justice Snowden
πCase:
- ADM International SARL sought enforcement of a multi-million-dollar arbitration award against Grain House International SA (GHI).
- GHI and its CEO, Mr. Elhachmi Boutgueray, were found in contempt of court for failing to comply with asset disclosure orders (ADO) and a worldwide freezing order (WFO).
- The specific breaches included improper redaction of documents, incomplete bank statements, non-disclosure of property encumbrances, and trading in breach of the WFO
First instance:
The High Court found both GHI and Mr. Boutgueray in contempt. GHI was fined Β£75,000, and Mr. Boutgueray was sentenced to 12 months in prison.
πGrounds of appeal:
The appellants contested the findings of contempt and the severity of the penalties. They argued against the interpretation of the court orders and the imposition of director liability
βοΈ Position of EWCA Civ:
The Court of Appeal upheld most of the High Court's findings, confirming the principle that directors can be held personally liable for corporate contempt. The court reduced GHI's fine to Β£50,000 and Mr. Boutgueray's prison sentence to 6 months, acknowledging the misinterpretation of "value" in the property encumbrance disclosureβ
β
The appeal was dismissed.
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