Companies require permission to appeal in contempt

29/07/11

Masri v Consolidated Contractors International Company SAL & Ors [2011] EWCA Civ 898

The Court of Appeal has held that the right to pursue an appeal without obtaining permission in civil contempt cases is inapplicable to companies, on the ground that a company is incapable of being imprisoned and that an order against a company in contempt proceedings cannot therefore amount to a 'committal order' within CPR 52.3(1)(a).

In these proceedings, a series of findings of contempt had been made against two companies by Christopher Clarke J. The only sanctions sought against the companies were fines. Clarke J gave the companies permission to appeal, but imposed onerous conditions on such permission, including the payment into Court of outstanding judgments against both companies for sums in excess of $75 million and the provision of security in the sum of £5 million each in respect of any fines which might be imposed against the companies in the committal proceedings. The companies brought an appeal before the Court of Appeal contending that they did not require permission to appeal, because the findings of contempt against them, exposing them to the possibility of very large fines, should be regarded as a 'committal order'. The companies thereby sought to obtain a right of appeal without complying with the conditions imposed by Clarke J.

The companies' arguments were dismissed by the Court of Appeal, which held that a 'committal order' was an order which committed a person to prison. As such, a committal order could only be made against a natural person, not a company. In so holding the Court of Appeal followed its previous decision in Government of Sierra Leone v Davenport [2002] EWCA Civ 230. The case of Shadrock-Cigari [2010] 1 W.L.R. 1311, which appeared to suggest that a fine was a committal order, was disapproved in this respect. This was the first occasion when the point had arisen in a case involved the imposition of fines on a company for contempt.

The companies had also sought to appeal against the conditions imposed by Clarke J on the permission to appeal which he granted, but in light of the decision of the Court of Appeal in R. ota Medical Justice v Secretary of State [2011] EWCA Civ 269, the companies conceded that the Court of Appeal had no jurisdiction to hear such an appeal.

The judgment is here.