Masri v Consolidated Contractors International Company SAL & Anor

The court retains discretion whether to impose a sanction after contempt has been proved. The primary, though not exclusive, purpose of contempt powers is securing compliance with court orders. Where the judgment debt has been satisfied under a settlement, the contempts have substantially been purged, related proceedings have ended, and the claimant seeks no further order, the court may properly impose no penal sanction. The court may also take account of the contemnors’ belief that their conduct was authorised by a foreign court, although that consideration is weakened where the foreign proceedings formed part of a scheme to avoid enforcement.

The judgment followed an earlier decision finding Consolidated Contractors International Company SAL and Consolidated Contractors (Oil and Gas) Company SAL guilty of several contempts, including breaches of receivership, freezing and disclosure orders. The contempts arose during prolonged attempts to resist enforcement of a substantial judgment debt, including receipt of oil-sale proceeds, non-disclosure of information and proceedings brought in Yemen.

Before the sanction hearing, the parties reached a confidential global settlement. The judgment debt was reported as satisfied, the related Yemeni proceedings had been discontinued, and the claimant no longer sought sanctions. The issues were whether the contempts had been sufficiently purged and what order, if any, should follow.

1. Disposition. The judgment debtors remained guilty of the contempts set out in the earlier judgment. The court recorded that it had been informed that the judgment debt had been satisfied under the settlement agreement. It imposed no sanction and permitted the claimant to discontinue the application against the third respondent, with no order as to costs.
2. The court’s contempt jurisdiction has a primary, but not exclusive, purpose of securing compliance with its orders. It also serves to punish defiance. Whether to impose an order after contempt has been established is a matter for the court’s discretion.
3. The satisfaction of the judgment debt substantially purged the contempts and the underlying contempt constituted by non-payment. The receipt of sale proceeds contrary to the receivership order, the Yemeni proceedings and failures to provide enforcement information consequently lost much of their significance. Less serious disclosure failures were of very limited significance.
4. The claimant’s position that the debt had been satisfied and the contempts purged was relevant, although the court retained control of the question whether an order should be made. The court also considered the contemnors’ belief that some conduct complied with orders of the Lebanese court. That consideration was weakened because the invocation of Lebanese jurisdiction and judicial administration formed part of a scheme to avoid payment.
5. It was legitimate to consider the undesirability of imposing a penal sanction for conduct which a foreign court had, or was thought to have, authorised, particularly where recovery of any fine would require the foreign court’s assistance. The apology from the companies’ in-house counsel was an additional relevant circumstance.

The judgment is a first-instance decision concerning the sanction to follow earlier findings of contempt in the same proceedings. No appellate decision is stated.