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Commercial Court Imposes Prison Sentences on Uncooperative Directors

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

The Commercial Court does not take defiance of its orders lightly and has a panoply of powers to enforce obedience. In one case that proved the point, the Court ordered sequestration of an overseas company’s assets and imposed prison sentences on five members of its senior management.

In the context of proceedings to enforce an arbitration award worth over $4 million, the Court had issued a worldwide freezing injunction against the company and its bosses. However, the order, which also required full disclosure of the company’s assets, had been wilfully disobeyed and the company had continued to trade as if nothing had happened. It had done nothing to ‘purge its contempt’, despite having been afforded an opportunity to do so.

Although there was no evidence that the company had any assets within England and Wales, the Court found that the issue of a writ of sequestration would bring pressure to bear and would not be futile. Five of the company’s directors or de facto directors, three of them members of the same family, were also sentenced to terms of imprisonment of varying lengths for their contempt of court.

Defiance of court orders can prove costly in more ways than one. Contact us for advice on dealing with uncooperative debtors.


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