25/07/2024
Directors Held Accountable for Corporate Contempt
🔺ADM International SARL v Grain House International SA & Anor (Rev1) [2024] EWCA Civ 33
👨⚖️Lord Justice Singh
👨⚖️Lord Justice Popplewell
👨⚖️Lord Justice Snowden
📇Case:
- 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 £75,000, and Mr. Boutgueray was sentenced to 12 months in prison.
📃Grounds 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
⚖️ 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 £50,000 and Mr. Boutgueray's prison sentence to 6 months, acknowledging the misinterpretation of "value" in the property encumbrance disclosure
✅ The appeal was dismissed.
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