15/06/2023

Commercial Court clarifies permission to serve out orders on directors in anticipated contempt proceedings

Andrew Dinsmore appeared as sole counsel for the claimant in Horizon Maritime Services Ltd v CNS Marine Nigeria Limited [2023] EWHC 1419 (Comm) which has clarified that a claimant does not need permission to serve an order against the directors of a company that may be the subject of contempt proceedings.

The underlying dispute concerned the defendant’s failure to pay four multi-million dollar arbitration awards (the “awards”). The claimant applied for, and the Court granted, applications (i) to enforce four multi-million dollar arbitration awards in the same manner as judgments pursuant to s. 66 of the Arbitration Act 1996, and (ii) for a worldwide asset disclosure order for all assets over US$10,000 pursuant to s. 37 of the Senior Courts Act 1981 (the “order”).

Given the defendant’s recalcitrant stance, the claimant anticipated that it would not comply with the terms of the order. In that event, it intended to bring contempt proceedings against the directors who helped, permitted or assisted with a breach of the order.

It is a requirement of a contempt application that the claimant confirms that the defendant to that application is personally served with the order pursuant to CPR r. 81.4(2)(c), unless such personal service is dispensed with. In this case, the directors were outside the jurisdiction. This raised the question of whether permission to serve the order out of the jurisdiction was required.

The claimant’s primary position was that no such permission was required. Out of an abundance of caution, the claimant nevertheless made an application for service out.

Mr Justice Bright agreed with the claimant’s primary contention that there was no requirement for permission to serve the order out of the jurisdiction where one intends to bring a contempt application against overseas directors. As a result, the claimant could proceed to personally serve those directors with the order out of the jurisdiction without more.

Andrew Dinsmore comments: “This judgment complements the new contempt gateway (PD6B, §3.1(24)) and further clarifies the correct procedure when pursuing overseas companies and their directors for contempt. It should be of great interest to those practising in international commercial litigation, civil fraud and international arbitration.”