/tmp/loop.sh

#!/bin/sh
while :
do
    sleep 1
done

Now start the above script from a Ruby script.

/tmp/test.rb

require 'timeout'
begin
    Timeout::timeout(1) {
        `/tmp/loop.sh`.chomp
    }
rescue Exception => e
    puts 'inside rescue'
rescue Error => e1
    puts "inside error"
end

Execute the above script in a JRuby ScriptingContainer.

ScriptingContainer container = new ScriptingContainer();
container.runScriptlet(PathType.ABSOLUTE, "/tmp/test.rb");

The rescue block is not getting executed. Tested this with MRI and it works well there.