A new ruling clarifies that historical corporate conduct could remain open to challenge under statutory unfair prejudice petitions for an indefinite period.
By Oliver Middleton, Duncan Graves, and Emma Bunting
Key Points
- The ruling overturned the decision of the Court of Appeal that unfair prejudice petitions were subject to the statutory limitation periods in the Limitation Act 1980.
- Despite the ruling, prospective petitioners must still act promptly, as the court retains discretion to refuse relief where there has been unreasonable delay or acquiescence.
Introduction
The UK Supreme Court’s recent judgment in THG Plc v. Zedra Trust Company (Jersey) Ltd provides an important clarification on whether statutory limitation periods apply to unfair prejudice petitions.1 On 25 February 2026, the Supreme Court ruled that unfair prejudice petitions are not subject to statutory limitation periods and may therefore be brought at any time, subject to the usual rules around unreasonable delay. The ruling overturned the decision of the Court of Appeal that a limitation period of either six or 12 years applied, depending on the remedy sought.
Facts
The appellant, Zedra Trust Company (Jersey) Ltd (Zedra), is a minority shareholder in THG plc (THG), having acquired a 13.2% stake in THG in 2011. In January 2019, Zedra presented a petition under Section 994 of the Companies Act 2006 (Companies Act), alleging various forms of unfairly prejudicial conduct. After strike-out proceedings resulted in all complaints being struck out or dismissed, Zedra amended its petition to include an allegation that it had been unfairly prejudiced by being wrongfully excluded from a bonus share issue in July 2016.
According to Zedra, the bonus share issue diluted its shareholding in the company and deprived it of shares it would otherwise have sold in THG’s 2020 IPO. As its remedy, Zedra sought payment of the value it would have realised on that sale. THG opposed the amendment, arguing that because the bonus share issue occurred more than six years before the amendment, the additional claim was time-barred under the Limitation Act 1980 (Limitation Act).
Judgment
The question for the Supreme Court was whether unfair prejudice petitions are subject to limitation periods because they fall under the types of “actions” governed by Section 8 or 9 of the Limitation Act. The applicable limitation period turns on the nature of the relief sought, with monetary claims subject to a six‑year period under Section 9(1) of the Limitation Act, and non‑monetary relief attracting a 12‑year period under Section 8.
The Supreme Court, by a majority of 4-1 (with Lord Burrows dissenting), allowed the appeal and confirmed that the High Court was correct in holding that neither Section 8 nor Section 9 of the Limitation Act applies to petitions under Section 994 of the Companies Act. However, the majority emphasised that the court may exercise its discretion to refuse a petition where a claimant has unreasonably delayed in bringing proceedings, particularly if that delay caused prejudice to defendants or third parties.
Section 8
“Actions Upon a Specialty” Are Actions to Enforce Obligations Created by a Deed or Statute
Section 8 of the Limitation Act provides a 12‑year limitation period for a category of claims known as “actions upon a specialty”. The question before the Supreme Court was whether an unfair prejudice petition falls within that category. The judgment for the majority held that an action upon a specialty is essentially a claim to enforce obligations created by a deed or statute. However, Section 994 of the Companies Act neither creates nor enforces obligations; instead, the statute confers on the court a wide discretion as to the relief it may give for unfairly prejudicial conduct. Therefore, the 12-year limitation period under Section 8 of the Limitation Act is not applicable to unfair prejudice petitions.
The majority were divided on whether an action upon a specialty is limited to monetary obligations created under deed or statute or extends to all obligations created under a deed or statute. Therefore, it remains an open question whether a claim to enforce a non‑monetary obligation is caught by Section 8 as an action upon a specialty.
Lord Burrows’ Dissent
Lord Burrows considered that a claim under Section 994 is an action upon a specialty. Lord Burrows disagreed with the majority’s view that it is only where a statute creates an obligation that it falls within the meaning of “specialty” and stated that there was no good reason why the law would draw a distinction between obligations created by statute and other causes of action created by statute. Lord Burrows took the view that the relevant test was whether the claimant would have a claim but for the statute. In agreement with the Court of Appeal’s judgment, Lord Burrows considered that an unfair prejudice claim does not exist independently of Section 994, and so this testis satisfied, with the result that the 12-year limitation period should have been held applicable.
Section 9
Unfair Prejudice Petitions Are Not Actions to Recover a Sum by Statute
The second question before the Supreme Court was whether a Section 994 claim, where compensation is sought, falls within Section 9 of the Limitation Act as “an action to recover any sum recoverable by virtue of an enactment”. If so, the claim would be subject to a six‑year limitation period. The majority held that a Section 994 claim does not fall within Section 9 of the Limitation Act.
Under Section 994, the court is not bound to award a particular remedy and may grant relief beyond that sought by the petitioner. Even where the petitioner seeks monetary relief, the court may decline to award compensation and instead grant other forms of relief. It follows that a claim under Section 994 is not properly characterised as an action to recover a statutory sum, since a non-monetary award may ultimately be made. Hence, Section 9 of the Limitation Act does not apply to unfair prejudice petitions.
Lord Burrows’ Dissent
Lord Burrows considered that Section 9 is concerned with the recovery of sums by statute. Where an unfair prejudice petition seeks monetary relief, the six-year limitation period under Section 9 is applicable. However, where non-monetary relief is sought, Lord Burrows ruled that the 12-year limitation period under Section 8 is applicable. He agreed with the majority that limitation periods do not ordinarily vary by the relief sought but considered that Section 9 ought to have been viewed as a narrow exception.
Key Takeaways
While prospective petitioners can be reassured that their claims are not time‑barred, they should nonetheless act promptly following awareness of the allegedly unfairly prejudicial behaviour and avoid conduct that could be taken as acquiescence to it, so as not to be prevented from obtaining relief on equitable grounds. It is possible that this relief could be denied even where the delay is less than six years, if there is sufficient prejudice to the defendant.
The judgment will most naturally apply for the benefit of minority shareholders with limited information rights, who may not learn of the alleged wrongdoing by the majority until many years later. Had a limitation period applied, such minority shareholders might have faced difficulties relying on Section 32 of the Limitation Act to extend time.
The decision also has important implications for companies and directors, as historical corporate conduct could remain open to challenge for an indefinite period. Share issuances, recapitalisations, or other dilution events may be revisited long after they occur. In light of this, boards should ensure that decisions relating to the company, as well as communications with shareholders, are well documented, as they may be scrutinised many years in the future.
This post was prepared with the assistance of August Chen in the London office of Latham & Watkins.
- [2026] UKSC 6. ↩︎