As with most legal questions, the answer to the above is, "it depends".
It depends on the nature of the Court Order that has been made.
This was an issue in a recent decision on 9 May 2024 in the case of HILTON INTERNATIONAL MANAGE (MALDIVES) PVT LTD v SUN TRAVELS & TOURS PVT LTD (2024) SGHC 119
Background:
In 2015, an arbitral tribunal issued awards in favor of Hilton against Sun Travels. Hilton obtained leave to enforce the awards in Singapore and entered judgment (the "Judgment").
In 2021, the court ordered Sun Travels to pay the amounts due under the Judgment within 3 months (the "Time-Fixing Order"). Sun Travels did not comply.
Hilton filed for committal against Sun Travels and its Chairman & MD for contempt of court in failing to comply with the Time-Fixing Order. If found liable, the company can be ordered to pay a fine and the Chairman can be committed to prison for being in Contempt of Court.
Sun Travels' Liability:
The court found that Sun Travels' non-compliance with the Time-Fixing Order was intentional and not due to impecuniosity (inability to pay). Sun Travels had sufficient assets to pay but chose not to, prioritizing its business over the court order. Its conduct showed no intention to satisfy the debt. The court held Sun Travels committed contempt of court.
Chairman's Liability:
As Chairman involved in Sun Travels' decision not to comply, his conduct fell under Section 6(2)(b) of the Administration of Justice Act - he consented to or was party to the contempt. The court rejected his defence that he acted on management advice, finding him guilty of the same contempt as Sun Travels.
Sentencing:
The court imposed the maximum $100,000 fine on Sun Travels. For the Chairman, it imposed 1 year's imprisonment, suspended for 3 months to allow payment. If paid within 3 months, the jail term would be substituted by a $100,000 fine. After extensions, Sun Travels fully paid by March 2024, so the Chairman's jail term was substituted by a $100,000 fine which he paid.
Conclusion:
The case highlights the serious consequences for directors and companies who fail to comply with court orders. Both Sun Travels and the Chairman were found in contempt for intentionally failing to comply with the court order to pay the arbitral award amounts, leading to significant fines and potential imprisonment. It serves as a reminder of the importance of honouring legal obligations and the repercussions for failing to do so.
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