One of the principal reasons why commercial arbitrators so often sit in London is that the English courts are well known for enforcing their decisions to the hilt. In one case that proved the point, a businessman who utterly ignored an arbitration award and a string of court orders was sentenced to 18 months’ imprisonment for his defiance.
Company A, a producer of agricultural goods, had obtained a $61,239 arbitration award against a shipping company (company B) that was under the businessman’s control. No attempt was made to satisfy the award and, after company A launched enforcement proceedings, orders were made by the High Court freezing company B’s assets and requiring disclosure of financial information.
There had been no compliance with any of those orders and neither company B nor the businessman had responded to a number of emails that had warned them of the seriousness of the matter. The Court noted that it was as if the orders and emails had fallen into a void and that the businessman appeared to believe that, so long as he stayed outside the borders of the UK, he would evade punishment.
There had been no excuse proffered by company B or the businessman and the Court found that the latter’s conduct amounted to a wilful interference with the administration of justice. In the circumstances, a prison sentence close to the two-year maximum that could be imposed for contempt was justified.