Gwembe Valley Development Company Ltd v Koshy [2004] EWCA Civ 1048

Where director dishonestly fails to disclose his interest in a transaction, equitable compensation is available as a remedy.

Liability of directors for loss caused by non-disclosure of an interest in proposed transaction is strict

• As soon as director conceals his interest, is breach of duty

However where company would still have entered transaction even if director had disclosed interest, can be no claim for equitable compensation.

• I.e. as company has suffered no loss

The self-dealing rule itself cannot be excluded.

Thus Defendant was only exempted from liability if he actually disclosed his interest to the directors.

Is probable that company would have entered transaction nonetheless had they known of Defendant’s interest.

Therefore equitable compensation is not appropriate remedy.

Better remedy is account of profits received by Defendant.