First Department Upholds $500,000-per-day Contempt Fine

On November 4, 2021, the First Department issued a decision in Pacific Alliance Asia Opportunity Fund L.P. v. Kwok Ho Wan, 2021 NY Slip Op. 06051, upholding a $500,000-per-day fine, explaining:

The motion court acted within its discretion in holding defendant in civil contempt, as plaintiff established by clear and convincing evidence that defendant violated a lawful, clear mandate of the court, of which he had knowledge, and that such violation resulted in prejudice to plaintiff’s rights.

Contrary to defendant’s argument, the court did not commit a procedural defect under Judiciary Law § 770 because it did not issue a final order of contempt. Further, the evidence shows that the daily fine of $500,000 was intended to strongly encourage defendant to purge himself of the contempt, which, despite being permitted two months to accomplish, he has shown no interest in doing. The motion court is instructed to proceed with an evidentiary hearing to resolve a dispute as to ownership and control of the yacht, and to assess appropriate penalties.

(Internal citations omitted).

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