UK Supreme Court finds director owes fiduciary duties even after liquidation and awards liquidators substantial equitable compensation
8 December 2025
In what circumstances will a director whose powers have ceased continue to owe fiduciary duties to the company? When will a vendor's lien be excluded from a sale? And how should a beneficiary's losses be assessed in a claim for equitable compensation for misappropriation of its property? These are the questions the UK Supreme Court was concerned with in its recent decision in Mitchell and another v Al Jaber [2025] UKSC 43.
In this briefing, we examine the circumstances in which fiduciary duties arise for directors and how equitable compensation is assessed in misappropriation cases. The facts of the case were unusual: the director acted some five years after liquidators had been appointed and, despite his formal powers having ceased, purported to transfer shares belonging to the company. The Supreme Court held him liable for misappropriating those shares and, reversing the conclusion of the Court of Appeal, awarded the company substantial equitable compensation.
