Disobedience and contempt of Court
The commercial Court in London has ruled a very interesting judgment arising out of a sales of goods case where the matter escalated into contempt of court charges addressing the responsibility of two company Directors.
In a nutshell, ADM and Copragri (GHI), two companies trading Companies in the market of agricultural products had a dispute that was referred to Arbitration. On July 2018, an Arbitration Award was issued by a GAFTA tribunal in ADM’s favour, under which GHI was required to pay a sum of money to the former after failure to complete payments under an Acknowledgement and Installment Agreement.
Following the arbitration Award, GHI was posted as a defaulter, and subsequent Court orders were granted against GHI by the English Courts, calling for asset disclosure affidavits, a worldwide freezing action, and a further disclosure order, while GHI ignored initial hearings and provided only partially (if any) the materials requested.
In the analysis, the Mrs. J Cockerill described the legal background for establishing contempt of Orders. Firstly, that all allegations of contempt must be proven to the criminal standard and beyond reasonable doubt, that is:
-They knew of the terms of the order;
-They acted (or failed to act) in a manner which involved a breach of the order; and
-They knew of the facts which made their conduct a breach.
A key factor regarding contempt is that knowledge that acts are a breach is not necessary. Jurisprudence states that once both knowledge of the order is proved and the condemner is sure of the actions or omissions, it is enough to put in breach.
In the ruling, the learned judge draws on the contempt allegations, establishing that the Defendants knew the terms of the orders (the first requirement for contempt), as the further disclosure order was emailed to the other Defendants -GHI Directors- by way of alternative service.
As the Defendants argued that they were never personally served with the asset disclosure and world freezing orders, we must bring up key legal issues summoned in the Court: as the Defendants knew of the terms and responded, they retrospectively respond for said Orders and are not subject to dispensation.
The second condition is also met, as the document reads how the Defendants provided documentation not meeting the orders’ requirements -as insufficient or redacted when that was not provided-, or omitted certain material. Furthermore, the Defendants claim that some material was not provided due to mistakes or linguistic misunderstandings, thus incurring “technical” breaches.
However, the judge deemed that the history, continuity, and nature of these breaches (some determined as serious) constituted a deliberate will to do so. It must be noted that partial mitigation took place, as some of these breaches were fixed by providing the appropriate materials, thus purging them.
The judge in his ruling remarks how, after a judgment draft was passed, the Second Defendant -who met the contempt of court and breach conditions since he swore affidavits on GHI’s behalf, thus proving aware of and responsible for said breaches- showed a change in his actions, apologizing to the Court and providing a significant amount of material.
Despite the will to fix past actions and look for the favour of the Court, the continuous failures to comply (some remained unpurged) reaffirmed the Grounds the Defendant faced, resulting in a custodial sentence for the Second Defendant, an exemplary tale of disobedience and contempt.