Bunge SA v Huaya Maritime Corporation of the Marshall Islands & Anor

A company’s failure to comply with freezing-order disclosure obligations may constitute contempt where the order was served on the company and breached. A person controlling the company may also be liable as a stranger to the order if his conduct wilfully interferes with the administration of justice and the necessary intention is proved beyond reasonable doubt. The court may dispense with personal service where the person had notice of the order or justice so requires. A committal application may proceed in the respondent’s absence where there was adequate notice, deliberate non-attendance and further delay would cause prejudice. Imprisonment must be necessary and proportionate.

Bunge obtained a London arbitration award against Huaya Maritime Corporation which remained unsatisfied. The court made freezing and ancillary disclosure orders requiring disclosure of worldwide assets. Huaya failed to comply. Bunge applied for a declaration that Huaya was in contempt and for the committal of Mr Zhu Guo Hua, its actual controller and likely director or officer.

The application notice omitted the required penal notice. The court had to decide whether to waive that defect, dispense with personal service, proceed in the respondents’ absence, determine contempt and impose an appropriate penalty.

1. Procedural defect. The omission of the penal notice was initially not waived because the court lacked evidence concerning Mr Hua’s English-language facility and access to legal advice. After an adjournment, he was expressly warned of the consequences and given a further opportunity to comply. The requirement was then waived.
2. Service. Personal service of the disclosure orders on Mr Hua was dispensed with under CPR 81.8(1)(b) and 81.8(2). He had notice through email and courier and persistently failed to respond.
3. Absence. The application could proceed without the respondents. They had adequate notice and opportunity to respond, deliberately absented themselves, and further delay would prejudice enforcement of the arbitration award.
4. Contempt. Huaya was in contempt because the orders were served on it and breached. Mr Hua was also in contempt. Although his status as director or officer was not conclusively proved, he was in actual control. His knowledge, repeated warnings and complete failure to comply established beyond reasonable doubt a wilful interference with the administration of justice.
5. Penalty. Imprisonment was appropriate. The court considered deliberateness, culpability, prejudice, lack of co-operation, absence of remorse or excuse, the continuing breach and the statutory maximum of two years under Contempt of Court Act 1981, section 14(1). Mr Hua was sentenced to 18 months’ imprisonment, with substantial remission if he complied.