ADM International SARL v Grain House International SA

Contempt of court must be proved to the criminal standard: the court must be sure of the order, the breach and the facts making the conduct a breach. Knowledge that the conduct was legally contemptuous is unnecessary. In an asset-disclosure order aimed at identifying assets available to satisfy a judgment, “value” means unencumbered value. A company director is personally liable only where knowledge of, and responsibility for, the company’s breach are proved. Retrospective dispensation with personal service may be granted under the Civil Procedure Rules 1998 where there is good reason, not mere expediency. Serious deliberate breaches linked to freezing orders can justify immediate custody. An anti-suit injunction requires a sufficiently likely threatened foreign proceeding.

ADM obtained a GAFTA award against Grain House International SA after the company failed to pay sums due under an instalment agreement. Permission had been given under section 66 of the Arbitration Act 1996 to enforce the award as a judgment. ADM sought committal orders against the company and two directors for alleged breaches of asset-disclosure orders and a worldwide freezing order.

The court considered the criminal standard of proof, the meaning of “value” in an asset-disclosure order, individual responsibility for corporate contempt, retrospective dispensation with personal service, sentence and mitigation. ADM also sought an anti-suit injunction based on a threatened Moroccan claim.

The committal application succeeded in material part, but the anti-suit injunction was refused.

1. Contempt standard. The court adopted the criminal standard of proof. ADM had to prove that the defendants knew the terms of the orders, acted or failed to act in breach of them, and knew the facts making their conduct a breach. It was unnecessary to prove knowledge that the conduct was legally contemptuous: Varma v Atkinson & Another [2020] EWCA Civ 1602.
2. Breaches. Redacted credit-facility documents and missing bank statements breached the further disclosure order, although those contempts were technical or had been purged by the time of sentence and attracted no separate penalty. In the asset-disclosure order, “value” meant unencumbered value because the order’s purpose was to identify assets available to satisfy the judgment. The undisclosed encumbrances therefore constituted a deliberate breach. The trading and dissipation of assets constituted a deliberate and continuing breach of the freezing order. This approach was supported by Aspinall v Lim [2019] EWHC 2379 (QB).
3. Directors and service. Personal committal required proof that the individual knew of and was responsible for the company’s breach, applying Dar Al Arkan Real Estate Development Co v Al-Refai [2014] EWCA Civ 715. That test was satisfied for the Second Defendant but not the Third Defendant. Under CPR 81.4(c) and (d), the court could retrospectively dispense with personal service where there was good reason. The orders had reached the individual defendants and had been acted upon, and the service difficulties justified the order. The approach was consistent with BMBF 4 PLC v Rizwan Hussain [2022] EWCA Civ 1264 and MBR Acres Ltd v Maher [2022] 3 WLR 999.
4. Adjournment and sentence. The request to adjourn was refused. Purging contempt was a separate matter and could not derail a scheduled sentence hearing. Disclosure orders allied to freezing orders were to be treated pari passu with orders within freezing orders. Serious deliberate breaches could justify immediate custody, with sentence calibrated by culpability, harm, mitigation and totality. The Second Defendant received 12 months’ imprisonment for Ground 3, concurrent with six months for Ground 4, and no separate penalty for Grounds 1 and 2.
5. Anti-suit injunction. An injunction may be granted in anticipation of foreign proceedings where those proceedings are likely, but the threshold was not met. The alleged threat was 14 months old, no proceedings had been brought, and it was unclear whether any proceedings would fall outside permissible challenges to enforcement. The proposed order was also too broad.