ADM International SARL v Grain House International S.A. (Formerly known as Compagnie Agricole De Commercialisation Et De Conditionnement Des Cereales Et De Legumeineuses S.A.)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Popplewell,Lord Justice Snowden,Lord Justice Singh |
| Judgment Date | 25 January 2024 |
| Neutral Citation | [2024] EWCA Civ 33 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2023-000323 |
[2024] EWCA Civ 33
Lord Justice Singh
Lord Justice Popplewell
and
Lord Justice Snowden
Case No: CA-2023-000323
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
MRS JUSTICE COCKERILL
Royal Courts of Justice
Strand, London, WC2A 2LL
Bob Moxon Browne KC and George Hilton (instructed by Sterling Stamp Law Ltd) for the Appellant
Lawrence Akka KC and Patrick Dunn-Walsh (instructed by Squire Patton Boggs (UK) LLP) for the Respondent
Hearing dates: 27 June, 20 December 2023
Approved Judgment
This judgment was handed down remotely at 2:00 pm on 25 January 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This is an appeal by the first appellant (‘GHI’) and the second appellant, GHI's CEO (‘Mr Boutgueray’), against a decision of Cockerill J that (1) both were in contempt of court in four respects; (2) GHI should pay a fine of £75,000; and (3) Mr Boutgueray be committed to prison for a total of 12 months. The appeal is against the findings of contempt and against the sentence imposed.
The factual and procedural background
The Judge set out a clear summary of the background at [2]–[34] of her judgment. I have gratefully drawn on it in the summary which I give, but have expanded it to take into account matters relevant to the way the appeal was argued.
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.
GHI is a Moroccan company which claims to be a leader in the importation of cereals into Morocco. Mr Boutgueray has at all material times been a director and the CEO of GHI, and Chairman of its parent company. His brother Mr Brahim Boutgueray was another director of GHI, against whom contempt proceedings were also pursued before Cockerill J. She found that he was not in contempt and there is no appeal from that finding. I need say no more about him.
Between 2014 and 2016 ADM had entered into several contracts with GHI for the sale of various agricultural commodities. Following disputes the parties entered into a written instalment payment agreement, which was governed by English law and contained a clause providing for disputes to be resolved by GAFTA arbitration. GHI paid the first instalment due to ADM under the payment schedule on 19 October 2017, but failed thereafter to make any further payments of the instalments when they fell due. On 8 December 2017, ADM commenced a GAFTA arbitration against GHI for breach of the instalment agreement. GHI did not participate in the arbitration. On 17 July 2018, the GAFTA Tribunal published an 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. GHI did not appeal. Nor did GHI make any application to the High Court to challenge the award on any of the permitted grounds provided for in the Arbitration Act 1996. 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.
On 30 January 2019 Bryan J made an order under s.66 Arbitration Act 1996 giving ADM permission to enforce the award against GHI as if it were a judgment of the court.
At a hearing on 22 March 2019, Waksman J granted an asset disclosure order in aid of enforcement of the award, requiring GHI to serve an affidavit from a director or proper officer disclosing details of its worldwide assets above certain financial values within 14 days of service of the order (“the ADO”). The application was made on notice to GHI, which was duly served with the application by a bailiff in Morocco. GHI did not attend the hearing or communicate with ADM's solicitors about it. The information required to be provided on affidavit was identified in paragraph 1 of the ADO as follows:
“(a) all of [GHI's] bank, building society or similar accounts with a balance exceeding US$50,000, wherever they may be in the world, whether in its own name or not and whether solely or jointly owned, giving the name(s) in which such account is held, the name of the bank, building society or other entity, the address of the branch at which the account is held, the number of the account, and the balance of the account;
(b) all other assets located outside Morocco exceeding US$50,000 in value whether in its own name or not and whether solely or jointly owned, giving the value, location and details of all such assets;
(c) all other assets located in Morocco exceeding US$75,000 in value whether in its own name or not and whether solely or jointly owned, giving the value, location and, details of all such assets.”
The ADO included an order granting permission for it to be served out of the jurisdiction in Morocco. The ADO, endorsed with a penal notice, was duly served at GHI's offices in Morocco, but only after what ADM characterises as attempts to frustrate service, including making a criminal complaint against the first bailiff instructed to perform service. Service occurred by a bailiff at the fourth attempt in accordance with Moroccan law, including a covering letter summarising the disclosure required and drawing attention to the penal notice. GHI subsequently asserted that it had not been “duly notified”, but that assertion was untenable and has not been maintained.
No affidavit was served within 14 days, or indeed, as will appear, for almost two years. The ADO ordered GHI to pay costs assessed in the sum of £55,000. Those costs have not been paid.
In the week commencing 13 May 2019 ADM's solicitors, Holman Fenwick & Willan LLP (‘HFW’) received a letter by courier signed by GHI's CEO (i.e. Mr Boutgueray, although no name was given and the signature was illegible) stating that GHI was in the process of instructing solicitors in England but it was taking some time for regulatory reasons, and asking for HFW's patience. HFW responded granting a short extension of the time for compliance to 24 May 2019. An email response said that “as part of the declaration to the High Court we have mandated Taylor Fladgate LLP to assist us with this reporting transaction. Our lawyer team has asked us [for] many documents that we are preparing in order to become one of their clients”, and went on to seek an extension of the deadline to 7 June 2019. No extension was granted by HFW and there was no compliance with the ADO by 24 May (or indeed 7 June).
At a without notice hearing on 5 June 2019 Teare J granted ADM a worldwide freezing order against GHI's assets up to the sum of US$4 million in value until a return date. He gave permission for the order to be served out of the jurisdiction and by email to the email address of Mr Boutgueray, at which it was duly served endorsed with a penal notice.
On 21 June 2019, at the return date hearing, Moulder J continued Teare J's order granting ADM a final worldwide freezing order on substantially the same terms. I shall refer to the order made by Teare J and continued by Moulder J as ‘the WFO’ which is the definition used in the committal application. The WFO ordered that GHI pay costs assessed at £67,000. Again GHI did not attend the hearing, of which it was on notice, and the costs have not been paid.
Paragraph 4(2) of the WFO prohibits GHI from in any way disposing of, dealing with or diminishing the value of any of its assets outside England and Wales up to a value of US$4 million; paragraph 7(2) provides that if the total unencumbered value of GHI's assets in England and Wales does not exceed US$4 million GHI must not dispose of deal with or remove them; and that if GHI has other assets outside England and Wales, it may dispose of or deal with those assets outside England and Wales so long as the total unencumbered value of its assets whether in or outside England and Wales remains above US$4 million. The WFO was in standard terms for a post-judgment freezing order in accordance with Appendix 11 to the Commercial Court Guide, subject to two points which should be noted. First, as is usual for a post-judgment freezing order, but unlike a pre-judgment freezing order, it did not make an exception for trading in the ordinary course of business (save for the preservation of perishable assets): see Gee on Commercial Injunctions 7 th Edn 3–024 to 027. On the contrary paragraph 6 made clear that the prohibition applied to agricultural products and their proceeds, cargoes and any money standing to the credit of bank accounts. Secondly, the WFO did not have the standard paragraph for the provision of information which is included in order to enable the freezing order to be policed (see Gee at 23-006 and the cases and seminal article of Lawrence Collins, as he then was, cited at footnote 27). This was no doubt because the ADO had already been granted and served this function.
In November 2019, HFW received correspondence from Sterling Stamp Law Ltd (‘Sterling Stamp’), a firm of English solicitors who are now on the record for GHI and Mr Boutgueray. Stirling Stamp said they were acting on behalf of GHI and attached a “Statement of...
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