The Court of Appeal has handed down judgment in ADM International SARL v Grain House International SA and Elhachmi Boutgueray  EWCA Civ 33. The case arises from ADM’s successful committal application in January 2022, as part of its attempts to enforce a multi-million-dollar debt owed under a GAFTA arbitration award that has gone unpaid since July 2018.
This week, the Court of Appeal upheld Cockerill J’s finding at first instance in respect of four out of the five contempts found, holding that the first appellant, GHI (a Moroccan grain company), was in contempt of court by reason of its breaches of a worldwide freezing order and disclosure order, and that the second appellant, Mr Boutgueray, was responsible for those contempts as an officer of GHI. The court sentenced Mr Boutgueray to a six-month custodial sentence, and GHI was fined £50,000.
Of particular interest to practitioners is the court’s consideration of the status, following the introduction of the new CPR part 81 in 2020, of the court’s power to punish the directors of a company who are responsible for its breach of a court order, termed the ‘responsible persons liability principle’ by Popplewell LJ. The version of CPR part 81 in force since October 2020 does not contain a provision equivalent to the previous rule CPR 81.4, which expressly stated the existence of the responsible persons liability principle. Now, the central question for the Court of Appeal was whether the principle was an inherent power of the court that was merely restated by the old part 81.4 (and thus was unaffected by the change to the CPR), or whether the old part 81.4 was the source of the principle, such that the principle was implicitly repealed by the new part 81. Popplewell LJ reached the firm view that the former was correct, and that the court’s power to commit directors for a company’s breach of a court order was an inherent, substantive power that was merely restated by the old part 81.4, and thus unaffected by the streamlining effected by the new part 81.
This outcome was reached for reasons broader but similar to those of Foxton J in Olympic Council of Asia v Novans Jets LLP  EWHC 276 (Comm), and provides welcome clarity (and relief) to litigants interested in procuring a corporate respondent’s compliance with court orders.
The judgment also recommends changes to the Commercial Court standard freezing order form, and provides guidance for the wording of asset disclosure orders.