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Contempt of court: Committal order for failure to provide a full and honest statement of assets

Author: Nicola Sharp  10 June 2024
2 min read

The Commercial Court has handed down an 18-month committal order against Abdul Jalil Mallah for contempt of court. The contempt relates to breaches of a worldwide freezing order and lies he told in a witness statement. 

Background to the dispute

Mr Mallah is described as a ‘Syrian shipping tycoon’. He is sanctioned as a Specially Designated Global Terrorist for his alleged involvement in deals that the US Treasury claims were worth millions of dollars.

Oaktree Capital Management (OCM) had provided finance to one of Mr Mallah’s companies to purchase two ships. When Mr Mallah was sanctioned, OCM took legal action to repossess the ships. The High Court found in OCM’s favour and awarded them costs of £1million.

Failure to comply with court orders

Mr Mallah initially failed to serve an affidavit to set out his assets worldwide which exceeded €5,000 in value. Later, he made an affidavit, but it failed to give a complete account of his assets, and contained statements which were false. 

Providing false evidence

One of Mr Mallah’s arguments was that he was not validly served with the order to pay £1 million in costs because he was not in Greece at the time of service. As proof of this, he put forward a purported certificate from the Greek authorities and a copy of a page of his passport.

These documents turned out to be forgeries. Having read the evidence and heard the arguments Cockerill J was “sure that this is not a valid or authentic document.”

Mr Mallah also provided false evidence of the ownership of disclosed properties in Greece and Sweden. His evidence was that he divested his beneficial interests in these properties, which the Claimants successfully challenged as “demonstrably false”. 

The Claimants contended that Mr Mallah’s modest statement of assets was “inherently implausible.” Mr Mallah had been funding litigation in the UK and abroad. And the judge considered that for someone in Mr Mallah’s position, it was not credible that he had no other chattels worth more than €5,000 (no watches, gold, jewels, art etc). 

Is ‘conscious disobedience’ required?

Mrs Justice Cockerill said that she was not sure that Mr Mallah had deliberately chosen not to comply with the terms of the order. Rather, the breaches are ones committed by refusing to think hard, by refusing to actively try to comply. 

In the end, there was ample evidence of serious breaches, and that a number of the breaches were deliberate and contumacious. The lies Mr Mallah told to the court were intended to interfere with the course of justice. 

The sentencing and sanctions

All in all, the Court considered that a committal sentence of 18 months imprisonment was justified. 

Mrs Justice Cockerill also imposed a confiscation order in respect of any and all assets within the jurisdiction which are or may be identified as being owned by Mr Mallah.

Mr Mallah has the right to appeal to the Court of Appeal (Civil Division) without permission. 

Comment

Knowingly making false affidavits is a form of criminal contempt, but the Commercial Court has the power to punish this sort of conduct when it arises during its proceedings. The standard is the criminal standard; beyond reasonable doubt (Masri v Consolidated Contractors International Co SAL [2011] EWHC 1024 (Comm))

In this case, the court had sufficient evidence to conclude that Mr Mallah was in contempt of court in relation to three of the four counts against him. Mrs Justice Cockerill meticulously considered the procedural and contextual requirements to ensure the fairness of the order, and concluded that the gravity of the falsity in this case warranted the committal order. 

Read the full judgment here: OCM Maritime Nile LLC & Anor v Courage Shipping Co & Ors [2024] EWHC 1226 (Comm)

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Nicola Sharp

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Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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