Law Debenture Corp v Ural Caspian Oil [1994] 3 WLR 122

• X procured L to act in breach of a restrictive covenant that L had agreed with Plaintiff (not to sell shares without Plaintiff’s permission).

• X then sold shares to Defendant, whom Plaintiff sued (along with all other parties).

• However the court said that since Plaintiff had sought no injunction against X’s purchase of the shares from L nor Defendant’s purchase from X and therefore following that, the conduct was not unlawful. This was despite the tortious liability of X. 

Lord Hoffman

the defendant violates no legal right of the plaintiff if he makes himself judgment-proof by dissipating his assets before he is enjoined from doing so and he does not act unlawfully in failing to give disclosure before he is ordered to do so.