ADM International Sarl (a company incorporated in Switzerland) v Grain House International S.A. (Formerly known as Compagnie Agricole De Commercialisation Et De Conditionnement Des Cereales ET Legumineuses S.A.) (a company incorporated in Morocco)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Cockerill |
| Judgment Date | 26 January 2023 |
| Neutral Citation | [2023] EWHC 135 (Comm) |
| Docket Number | Case No: CL-2019-000035 |
| Court | King's Bench Division (Commercial Court) |
[2023] EWHC 135 (Comm)
Mrs Justice Cockerill
Case No: CL-2019-000035
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
AND IN THE MATTER OF THE ARBITRATION ACT 1996
AND IN THE MATTER OF ARBITRATION
7 Rolls Building
Fetter Lane
London,
EC4A 1NL
Lawrence Akka KC and Patrick Dunn-Walsh (instructed by Squire Patton Boggs (UK) LLP) for the Claimant
George Hilton (instructed by Sterling Stamp Law) for the Defendants
Hearing dates: 16 January 2023
APPROVED JUDGMENT
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic. This judgment was handed down in Court 1 by the judge and circulated to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Thursday 26 January 2023 at 10:30am.
INTRODUCTION
This is an application by the Claimant (“ADM”) to commit the Defendants for contempt of court. There is a considerable procedural history, which has dictated the shape which the application took and which has meant that the application before me has taken a rather different shape to the application as lodged.
FACTUAL BACKGROUND
ADM is a Swiss company which buys, processes and sells agricultural products. It is a subsidiary of the Archer Daniels Midland Company, an American Company which is listed in the Fortune 500.
Copragri (“GHI”) is a Moroccan company which claims to be a leader in the import of cereals in Morocco.
ADM's application arises out of GHI's failure to pay a GAFTA Award dated July 2018 in ADM's favour (“the Award”) awarding ADM the sum of USD 3,423,711.14 plus interest and EUR 152,058.07 plus interest together with £7,865.00 in arbitration fees and expenses.
The background to the Award is that in 2014–2016 ADM had entered into several contracts with GHI for the sale of various agricultural commodities (“the Sale Agreements”). In accordance with the Sale Agreements, ADM delivered the goods and GHI paid the purchase price.
During its performance of the Sale Agreements, ADM incurred certain costs which the parties had agreed, would be reimbursed by GHI. However, GHI failed to pay those sums when they were due.
On 19 September 2017 the parties orally agreed to an “Acknowledgement and Instalment Agreement” between ADM and GHI.
This was subsequently confirmed in writing and signed by the parties on 26 October 2017 and 1 November 2017 (“The Instalment Agreement”). The Instalment Agreement sets out the undisputed amounts of US$ 3,391,809.63 and EUR 185,320.35 that GHI owed ADM at the time, details of the accrued interest and a payment schedule. The Instalment Agreement is governed by English law and contains a clause providing for disputes to be resolved through GAFTA Arbitration.
On 19 October 2017, GHI paid the first instalment to ADM under the Instalment Agreement payment schedule. GHI then failed to make any further payments.
On 8 December 2017, the GAFTA arbitration was commenced against GHI for breach of the Instalment Agreement under the applicable GAFTA Arbitration rules No.125. GHI refused to participate.
On 17 July 2018, the GAFTA Tribunal published the Award against GHI for US$3,423,711.14 plus interest and EUR 152,058.07 plus interest, together with £7,865.00 in arbitration fees and expenses. On the same date a copy of the Award was sent to GHI by email and courier at its Morocco address. There is a 30 day period under the GAFTA Arbitration Rules for appealing to the GAFTA Board of Appeal. No appeal was made, nor had an application been made to the Court to challenge the Award. GHI was subsequently posted as a defaulter by GAFTA.
On 23 January 2019, the Casablanca Commercial Court gave ADM permission to enforce the Award in Morocco. That Order included an order for provisional enforcement notwithstanding any appeal.
An order under s.66 Arbitration Act 1996 was made on 30 January 2019 before Mr Justice Bryan giving permission to enforce the Award against GHI as if it was an order or judgment of the court, and to serve the Claim Form and other documents out of the jurisdiction on GHI in Morocco.
At a hearing on 22 March 2019, Mr Justice Waksman granted an asset disclosure order requiring GHI to serve an affidavit disclosing details of its worldwide assets above certain financial values within 14 days of service of the order, as well as awarding costs assessed on a summary basis (“the ADO”). GHI did not attend the hearing.
At a without notice hearing on 5 June 2019, Mr Justice Teare granted ADM a worldwide freezing order (“the Teare WFO”) against GHI's assets up to the sum of US$ 4 million. He gave permission for the order to be served out of the jurisdiction and by email to inter alia the email addresses of the Second and Third Defendants, who are (or were) Directors of the First Defendant.
On 21 June 2019, at the return date hearing, Mrs Justice Moulder granted ADM a final worldwide freezing order (“the Final WFO”) on substantially the same terms as the Teare WFO. The Final WFO ordered that GHI pay costs assessed at £67,000. Again GHI did not attend the hearing and costs have not been paid.
In November 2019, ADM received correspondence from Sterling Stamp (the solicitors who are now on the record for all three Defendants), who said they were acting on behalf of GHI and attaching a “Statement of Case/Defence” document. In that document it was claimed (for the first time) that GHI was not served with the ADO.
ADM then applied to the court for an order striking out the Statement of Case/Defence and requiring GHI to file a CPR-compliant relevant application seeking any relief it considered it was entitled to in a procedurally correct manner. This application was served on Sterling Stamp by email on 2 December 2019 and by courier on 3 December 2019.
On 6 December 2019, I ordered GHI to pay costs of £44,000 and struck out the Statement of case/Defence/ of case document. Again, GHI did not attend the hearing. I also gave express permission to GHI to apply to discharge the Final WFO by a CPR and Commercial Court-compliant application by 20 January 2020, but no such application was made. Again costs for this hearing were not paid.
On 17 December 2019, the Casablanca Commercial Court cancelled the Moroccan enforcement order. ADM appealed to the Moroccan Court of Cassation and the Court of Appeal judgment was subsequently quashed.
On 17 August 2020, ADM issued its First Committal Application.
Mr Justice Butcher's Order of 23 October 2020 dispensed with the requirement for the ADO to be personally served, and granted permission for service out and by alternative means of the committal application.
On 12 February 2021, 7 days before the hearing of the First Committal Application, GHI purported to comply with the ADO by an affidavit which Mr Elhachmi Boutgueray, sworn on 11 February 2021. To allow time to consider it, ADM agreed by consent order, on 19 February 2021, to adjourn the hearing. The hearing was eventually relisted to be heard on 14 May 2021.
To address the deficiencies in disclosure (in particular the fact that no addresses for properties had been given, no details of extent of GHI's interest, no source of legal funds stated, no details of credit facilities, etc), ADM issued a further disclosure application on 29 April 2021 (the “Further Disclosure Application”).
On 7 May 2021, (a week before the hearing) GHI served two further affidavits by Mr Elhachmi Boutgueray (dated 21 and 26 April 2021). The parties agreed that the hearing could not proceed, but disagreed about terms of the order.
On 21 May 2021, a Directions hearing therefore took place. GHI were represented by Counsel. Mr Justice Calver formally ordered the adjournment of the First Committal Application with costs reserved, that it be dismissed unless relisted by 24 June 2021, and that the costs of the application be reserved. He also confirmed that ADM are not prevented from bringing fresh committal proceedings in due course. Mr Justice Calver ordered GHI to pay £10,000 costs of the hearing. Those costs remain unpaid.
On 10 June 2021 GHI served a further affidavit by Mr Elhachmi Boutgueray (dated 3 June 2021), in response to the Further Disclosure Application. It was deficient, because proper details of various credit facilities were still not provided, and the source of funds for legal expenses were still not identified. On 2 July 2021, I made the Further Disclosure Order (“FDO”). Again GHI were represented by Counsel. It was ordered that GHI disclose details of credit facilities and the source of legal funds and that they were to pay costs of £20,000. Those are still not paid.
On 13 August 2021, three weeks after the deadline that I set (and a week after an extension agreed by consent), GHI served a further affidavit by Mr Elhachmi Boutgueray (dated 12 August 2021). That information was again seen as deficient by ADM who raised queries in September. In particular ADM sought unredacted copies of the credit facilities, the copies which had been provided having been redacted to remove absolutely all material information.
On 12 November 2021 a response was...
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