ADM International SARL v Grain House International SA & Anor

A civil contempt is established where a person intentionally performs the relevant act or omission, knowing the facts that make it a breach of the court order as objectively construed. An intention to breach the order is unnecessary.

Ambiguity does not prevent contempt once the court has construed the order. A reasonable but mistaken understanding ordinarily affects punishment and may make continued proceedings abusive. An asset disclosure order requiring the disclosure of an asset’s “value”, without more, ordinarily requires its market value rather than its unencumbered value.

Directors and officers culpably responsible for a company’s disobedience remain personally liable for civil contempt. That substantive, inherent jurisdiction survived the 2020 revision of the Civil Procedure Rules 1998.

ADM obtained an arbitral award against Grain House International SA (GHI), followed by an asset disclosure order, a worldwide freezing order and a further disclosure order. Cockerill J found GHI and its chief executive, Mr Boutgueray, in contempt in four respects. She fined GHI £75,000 and imposed concurrent prison terms on Mr Boutgueray producing an overall sentence of 12 months: [2023] EWHC 135 (Comm).

GHI and Mr Boutgueray appealed the findings and sentences. The principal issues were whether “value” in the asset disclosure order meant market or unencumbered value; how ambiguity affects civil contempt; whether directors’ civil liability for corporate disobedience survived the 2020 revision of the Civil Procedure Rules 1998; and whether the remaining findings and sanctions could stand.

1. Appeal allowed in part. The finding relating to the non-disclosure of property encumbrances, Contempt 3, was quashed. The other findings remained. GHI’s fine was reduced from £75,000 to £50,000, while Mr Boutgueray’s overall imprisonment was reduced from 12 months to six months: paras [62]–[73], [153]–[161].

2. The word “value” in the asset disclosure order meant market value, not unencumbered value. That followed from ordinary language, strict construction of coercive orders, the order’s treatment of bank balances and, most importantly, its enforcement purpose. Market value identifies substantial assets whose charges or beneficial ownership may then be investigated. The order did not require disclosure of encumbrances, so Contempt 3 was not established: paras [62]–[73]. Aspinall’s Club Ltd v Lim [2019] EWHC 2379 (QB) was distinguished because it concerned the restraining provisions of a freezing order expressly directed to assets available for execution.

3. An ambiguous order must still be objectively construed. If the defendant’s intended conduct breaches the order as construed, civil contempt is established without proof that the defendant intended to breach it. A reasonable but erroneous subjective construction ordinarily mitigates punishment. In an appropriate case, pursuing contempt where the defendant reasonably acted on an ambiguity may be an abuse of process: paras [73]–[84].

4. Contempts 1 and 2 were properly determined. Although technical and subsequently purged, they formed part of a wider pattern relevant to deliberateness and sentence. Their pursuit was not abusive: paras [54]–[59]. Contempt 4 was also proved. The judge could conclude beyond reasonable doubt that GHI deliberately continued trading while lacking the required US$4 million in unencumbered assets. An unsupported theoretical possibility of numerous undisclosed, sub-threshold assets did not undermine that conclusion: paras [85]–[92].

5. A director or officer culpably responsible for a corporation’s disobedience may be liable for civil contempt. This “responsible persons liability principle” is substantive law derived from the court’s inherent jurisdiction. It pre-dated the Common Law Procedure Act 1860 and was recognised, rather than created, by successive procedural rules. Its removal from the procedural text in 2020 did not abolish it: paras [99]–[150].

6. The immediate six-month sentence for Contempt 4 was justified by deliberate, continuing defiance of the freezing order over several years. No appellate ground for interference was established: paras [151]–[160]. Singh and Snowden LJJ agreed with Popplewell LJ.

1. Court of Appeal (Civil Division): The appeal was allowed to the extent that Contempt 3 and its associated sentence were quashed. GHI’s fine was reduced to £50,000 and Mr Boutgueray’s overall imprisonment to six months. The remainder of the appeal was dismissed: [2024] EWCA Civ 33.
2. High Court, Commercial Court: Cockerill J found GHI and Mr Boutgueray in contempt in four respects, fined GHI £75,000 and imposed an overall sentence of 12 months’ imprisonment on Mr Boutgueray: [2023] EWHC 135 (Comm).