* More than 6,500 tonnes of rice in dispute
* Court imposes jail terms of up to 18 months
By David Brough
LONDON, Aug 13 (Reuters) - London’s High Court has issued an arrest order against the owner and a senior officer of a Nicaraguan grains business for failing to pay millions of dollars owed to commodities house Archer Daniels Midland for rice imports, ADM and court papers said.
The case highlights a trend in which falling commodity prices have led to an increase in requests through courts for worldwide asset-freezing orders against companies that have not met the terms of their sales contracts.
Some lawyers in London say applying for such orders from the English High Court has become more common as commodities companies, among others, use this mechanism as a key weapon in a creditor’s armoury against defaulting counterparties.
A dozen worldwide freezing order and contempt cases have been heard by the London High Court over the last couple of years, these lawyers say.
In the ADM case, over 6,500 metric tonnes of U.S.-origin rice was shipped to the importer, Corcosa - Corporacion Comercializadora de Granos Basicos, in 2011 and 2012, under six sale contracts in dispute.
Each of those contracts is governed by English law and subject to arbitration by London-based GAFTA - the Grain and Feed Trade Association.
ADM spokeswoman Jackie Anderson said, “On July 21, ADM and its subsidiary ADM Rice, Inc. obtained sanctions from the UK High Court in London against a Nicaraguan company named Corporación Comercializadora de Granos Básicos (”Corcosa“); its owner and president, Enrique Jose Delgadillo Aguirre; and Mr. Delgadillo’s daughter and the executive director of the company, Vanessa Auxiliadora Delgadillo Sacasa.”
The court imposed prison sentences of up to 18 months on Enrique and Vanessa Delgadillo after it found they had disregarded its orders, Anderson said.
The move followed a 2014 arbitration award in which the GAFTA Tribunal in London determined that Corcosa and the Delgadillos had misappropriated $2.5 million in rice shipped to Nicaragua by ADM, lawyers close to the case said.
Court papers seen by Reuters confirmed the sanctions against Enrique and Vanessa Delgadillo.
A source close to ADM said Corcosa had not engaged with the court so no defence was filed. Reuters could not independently confirm this.
Reuters visited Corcosa’s registered address in Managua but was unable to locate the family. Attempts by Reuters to contact lawyers for Corcosa and Enrique and Vanessa Delgadillo were unsuccessful.
Nicaragua’s Chamber of Commerce said its files on the company had not been updated for two years, and that it did not know whether Corcosa remained in business.
Previously, Corcosa had paid for rice it received from ADM.
ADM is studying options for executing the arrest warrants in Britain, the United States or other countries, and for seizing assets belonging to Corcosa or the Delgadillo family, Anderson said.
Christopher Swart of Holman Fenwick Willan, ADM’s lawyers, called the case “another example of the English courts’ willingness to engage in international disputes where a link to this jurisdiction can be established”. (Additional reporting by Tom Polansek in Chicago, Enrique Andres Pretel in San Jose; and Antonio Blanco in Managua; Editing by Dale Hudson)