Masri v Consolidated Contractors International Company SAL & Ors

A person subject to an English court order must obey it. In contempt proceedings, the applicant must prove the breach to the criminal standard, but need not prove that the alleged contemnor believed that its deliberate conduct breached the order.

The appointment of a receiver to receive identified revenues restrains the judgment debtor from receiving them. A foreign blocking order does not generally excuse non-compliance with an unconditional English order. Any conflict with foreign law or a foreign court order instead informs the court’s flexible discretion as to enforcement and sanction. That discretion carries little weight where the alleged contemnor procured the foreign restraint as part of a strategy to frustrate enforcement.

Masri, the judgment creditor under earlier liability, quantum and enforcement orders concerning the Masila oil concession, applied to have CCIC and CCOG declared in contempt and fined. He alleged receipt of oil revenues contrary to a receivership order, interference with receiverships through foreign proceedings, and repeated failures to disclose assets and banking information or comply with freezing orders.

The companies relied principally on orders of Lebanese courts, including information-blocking orders and directions given after the appointment of a judicial administrator. The court first determined the corporate allegations. The application against the third respondent, Wael Khoury, was reserved for a later hearing.

1. The application succeeded in substantial part. The court found ten allegations of contempt proved against one or both judgment debtors. It did not determine sanction immediately and invited submissions on that issue.

2. The judgment creditor bore the criminal burden of proof. Where the evidence was circumstantial, the court had to be sure that the facts excluded any reasonable innocent explanation. Applying Marketmaker Technology (Beijing) Co Ltd v Obair Group International Corporation & Ors [2009] EWHC 1445 (QB), contempt required knowledge of the order, conduct constituting breach, and knowledge of the facts making it a breach. It was unnecessary to prove that the companies intended, or believed themselves, to disobey the order. A foreign order might affect sanction, but was not a general defence to deliberate non-compliance.

3. The CCOG receivership order appointed the receiver to receive oil revenues. That necessarily restrained CCOG, including through its agent, from receiving those revenues itself. CCOG was therefore in contempt by receiving the proceeds of the March 2008 oil sale. The Lebanese blocking order prohibited the provision of information, not receipt of the proceeds or payment to the receiver. It did not require CCOG to receive the money.

4. The court found that the Lebanese blocking orders had been sought at the behest of, and with the co-operation of, the judgment debtors. They formed part of a deliberate anti-enforcement strategy. Foreign proceedings commenced by CCOG in Yemen, which sought damages for the receiver’s lawful appointment and conduct, were an impermissible interference with the receivership and constituted contempt.

5. The companies also committed contempts by failing to provide audited accounts, disclose interests in Nigerian and Cayman companies and Nigerian debts, disclose a Greek bank account, correctly identify the jurisdiction of incorporation of the BTC counterparty, provide bank-account balances and valuations required by freezing orders, and comply with the CCIC receivership order. The court rejected allegations concerning the Pearl GTL and Gaza projects, the later oil sales, and the Azerbaijani proceedings.

6. A conflict with a foreign court’s order did not remove the English court’s contempt jurisdiction. The proper approach was flexible and discretionary, taking account of all the circumstances. Here, restrictions arising from the Lebanese orders carried little mitigating weight because the companies and their controlling shareholders had created and maintained the position to avoid enforcement.

This was a first-instance contempt application within long-running proceedings. Earlier judgments had established liability and quantified the judgment debt. Appeals concerning related enforcement orders were described in the judgment, including a dismissed appeal concerning the Yemen anti-suit injunction: [2008] EWCA Civ 625.

The present judgment determined the allegations against the corporate judgment debtors only. The case against the third respondent was deferred.