The Gerald Metals Group was awarded an unprecedented $2.5 million fine against its former joint venture partner China National Gold Group Hong Kong Limited (CNG) for its significant and persistent non-compliance with court orders in the BVI.

The underlying dispute (resolved in arbitration) involved a dispute between a Gerald Metals entity, Global Mining Development LP (Global) and CNG, the two shareholders of a BVI joint venture vehicle, Soremi Investments Ltd (SIL). Global exercised a right of first refusal under the terms of their shareholder’s agreement (the SHA) to purchase CNG's shares in SIL. In breach of the SHA, CNG refused to effect the transfer. Consequently, Global commenced arbitral proceedings in Hong Kong to enforce the SHA. By a first partial award (FPA), the tribunal found that Global was entitled to exercise the right of first refusal.

The tribunal ordered CNG to transfer its 65% shareholding in SIL to Global. Global was therefore the beneficial owner of 100% of the shares in SIL. CNG did not comply with the FPA. Global & Gerald therefore sought and obtained an order for specific performance from the tribunal (SPA) which along with the FPA were recognised in the BVI as orders of the BVI courts. CNG applied unsuccessfully to set aside the recognition orders and Gerald’s BVI counsel Harneys, vigorously pursued an enforcement strategy on their behalf.

CNG unlawfully stripped around USD200 million out of SIL’s French bank accounts an transferred this significant sum of cash to accounts in China in breach of undertakings it had given Global. Global and Gerald applied to the BVI Commercial Court for, and were granted, both a freezing injunction against CNG's assets and a mandatory order requiring that the monies wrongly transferred to be repatriated to SIL's French bank account.

As a result of CNG’s contumelious conduct, Gerald and Global sought to enforce CNG’s delinquent behaviour through contempt proceedings. At the same time, Gerald and Global enforced the FPA and SPA through a rectification order because CNG refused to transfer the shares into the name of Global as required under the recognition orders and SPA.

A four-day omnibus hearing before Justice Mithani (Ag.) took place between 26 to 29 May 2025. Mithani J found in Global and Gerald’s favour on every application and made damning findings of dishonesty by CNG and its subsidiary Soremi SA, as well as findings of collusive and deliberately obstructive conduct by CNG’s employee Mr Cheng.

Mithani J’s displeasure at CNG’s defiance of BVI court orders and its devious conduct is reflected in the record fine he ordered against CNG in the sum of $2.5 million at a rate of $100,000 for every week of CNG’s non-compliance. This is the highest fine for contempt levied against a party in BVI and English legal history.
It is a reminder to litigants in the BVI that compliance is not just expected—it is mandatory.

Jonathan Addo (Partner), Natasha Guthrie (Counsel), Mark Wells (Senior Associate) and James Wilton (Associate) of Harneys represented the Claimants led by Peter De Verneuil Smith KC and Judy Fu of 3VB. Also assisted by Penny Madden KC and Sam Firmin of Gibson Dunn & Crutcher who represent Global in the HKIAC arbitration proceedings.