Masri v Consolidated Contractors International Co SAL [2011] EWHC 1024 (Comm)

The First and Second Respondents were Lebanese companies. The First Respondent had assigned an interest in a Yemeni oil field to the Second Respondent. The Applicant obtained a judgment against both Respondents on the grounds that he had been granted a share in their interest in the field, which the Respondents refused to pay. The Respondents’ owners also made it clear that they would not pay the judgment sum.

The English Court appointed receivers of the Respondents in order to enforce the judgments, and made freezing orders and various orders requiring them to provide certain information about their assets. In the meantime, the directors of the Respondents resigned and judicial administrators were appointed by the Lebanese Court.

The Applicant applied for a declaration that the Respondents were in contempt of court by reason of breaches of the English court orders. It argued that the Respondents had pursued an “anti-enforcement strategy” in order to prevent enforcement of the judgment, and that that strategy had included acts which amounted to contempt of court. The Respondents submitted that they had a reasonable excuse for their actions, because of the constraints imposed on them by the orders of the Lebanese Court.

The Court found the Respondents in contempt for breaches of some of the orders, but in relation to certain others the Applicant failed in its application. In reaching its decision, the Court noted that it was not appropriate for it to determine whether or not to exercise its contempt jurisdiction by reference to the court to which the potential contemnors owed their primary allegiance. The correct approach was a flexible one which took into account all of the circumstances, including the nature of the orders made by both the English and foreign courts, the circumstances in which these orders were obtained, and the consequences of breach of the foreign orders.