Whom can you name in a penal notice?

08/12/23

Where an injunction is made against a company, the Order will typically carry a penal notice which warns that if the company disobeys the order, certain individuals may be liable in civil contempt.  Which individuals can be named in a penal notice of that type?

That is the issue which arose in Renaissance Securities v Chlodwig Enterprises Ltd [2023] EWHC 3160 (Comm).

A without notice anti-suit injunction had named Mr and Mrs Guryev in the penal notice addressed to the corporate Defendants, on the basis that they were said to be the ultimate beneficial owners (UBOs) of the corporate Defendants. Mr and Mrs Guryev applied to vary the injunction so as to remove their names from that penal notice.

Mr Justice Butcher granted that application. The Judge held that where a penal notice states that (i) if the corporate Defendant disobeys the injunction, then (ii) certain persons may be held in contempt, that can refer only to directors or officers of the Defendant. It would not be appropriate to refer to a UBO (or others such as senior managers). While a UBO (as with any other person) could in principle be liable in contempt if they knowingly assist breach of an injunction, that is a separate head of contempt and should be addressed separately if it is to be addressed in a penal notice.

The Judge left open the question whether an injunction can have any effect on the position of third parties abroad other than directors or officers of a corporate Defendant who are not themselves subject to the Court’s jurisdiction.

The Judgment will be of interest to practitioners in clarifying the scope and nature of contempt liability to which non-parties outside the jurisdiction can be subject.