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Rice Importers Who Turned Back on Dispute Resolution Process Jailed

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

The law is no toothless tiger and, as any good lawyer will tell you, turning your back on court orders is simply not an option. In one commercial contract case that proves the point, 18-month jail terms were imposed by the High Court on two company officers who dealt with a dispute by sitting on their hands and taking refuge in silence.

The pair’s company was alleged not to have paid for large volumes of rice imported into a South American country. The supplier obtained six arbitration awards against it following proceedings in London. Worldwide asset freezing and disclosure orders were subsequently granted by a commercial judge. The company, its directors and its officers were warned of the consequences of non-compliance.

The company had fully participated in the arbitration proceedings but had gone to ground after tasting defeat. It failed to comply with the orders in any respect and had refused to engage or communicate with the supplier. In the circumstances, the latter launched contempt proceedings against the company and the officers.

In jailing the latter, the Court was satisfied that, in failing to secure the company’s compliance with the orders, they had wilfully turned their backs on the dispute resolution process and had contemptuously ignored the orders. The supplier was also granted permission to apply for a writ of sequestration against the company’s assets. The company and the officers were ordered to pay the legal costs of the case.

If you are in dispute with another person or company, we will help you achieve the best result possible and advise you how to comply with the demands of the judicial process.


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