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As far as I'm aware, disputes about the misuse of heraldry in England and Wales are dealt with in the first instance by the High Court of Chivalry, which hasn't convened since the mid-twentieth century.

What sentences can the court impose upon the losing party? Is it limited to an order to stop using a heraldic device or face a conviction for contempt of court, or does the court have more powers available to it in law?

While the High Court of Chivalry's jurisdiction is confined to England & Wales, I'd also be interested in the penalties for the misuse of arms in countries with heraldic authorities.

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According to the Heraldry Society:

The first step is to Petition the Earl Marshal requesting that he issue process.

[Detailed, and lengthy, process and procedures omitted]

The hearing takes place before the Earl Marshal or his Surrogate. Both parties submit a “Definitive Sentence”, similar to a draft order, upon which the Court gives its judgment, adopting one of the two versions put forward with any adaptations that the Court deems necessary. The Court has the power to award damages, to fine and to award costs. Itemised bills of costs must be submitted and signed by each Counsel, and the assessment of costs is by the Register, subject to appeal to the Earl Marshal or his Surrogate. Costs can also be agreed. in the High Court.