The Supreme Court has confirmed that no statutory limitation period applies to unfair prejudice petitions under section 994 of the Companies Act 2006. Delay in presenting a petition will however remain a significant factor in the exercise of the Court’s discretion as to whether to grant relief.

Published: 10 April 2026
Authors: Hannah Field

In THG Plc v Zedra Trust Company (Jersey) Limited, the Court (by a 4-1 majority) held that unfair prejudice petitions are not subject to the limitation periods contained in the Limitation Act 1980. The decision overturns the Court of Appeal’s 2024 ruling and reflects what had long been the received wisdom among practitioners (albeit without any earlier binding appellate authority to that effect).

The judgment is significant for shareholders, directors and companies alike. It confirms that historic conduct may still be challenged through an unfair prejudice petition, even where the events in question took place many years earlier.

The decision also has potential implications for the limitation analysis in other types of claim similarly brought pursuant to a statute, but where the statute itself does not create or impose an obligation which the claimant is seeking to enforce.

The background

The appeal arose from an unfair prejudice petition presented in 2019 by a minority shareholder. The petitioner later sought to amend its case to include allegations arising out of a 2016 bonus share issue from which it said it had been wrongly excluded.

The respondent company argued that the new complaint was time-barred under the Limitation Act 1980, either:

• as an “action upon a speciality” subject to a 12-year limitation period under section 8; or
• as an “action to recover a sum recoverable by virtue of an enactment” subject to a six-year limitation period under section 9.

At first instance the High Court rejected both arguments, relying on the 2022 Court of Appeal decision in Cherry Hill Skip Hire (where the point was common ground and so not fully argued). The Court of Appeal subsequently reversed the High Court decision, finding that petitions fall in principle within both sections 8 and 9 of the 1980 Act, so are subject to a limitation period of 12 years unless a monetary order is sought in which case the six-year period applies.

The Supreme Court has now overturned the Court of Appeal’s decision, finding that neither section 8 nor 9 of the 1980 Act apply.

Why the Limitation Act does not apply

Section 8 - “Action upon a speciality”

The majority held that an action upon a speciality is essentially an action to enforce an obligation created by a deed or statute.

Sections 994 to 996 of the Companies Act 2006 do not impose obligations on directors or shareholders. Instead, they give the court the power to grant relief where a company’s affairs have been conducted in a way that is unfairly prejudicial to the interests of its shareholders.

The statute creates a remedy rather than an enforceable obligation; therefore, an unfair prejudice petition is not an action upon a speciality. The same reasoning may arguably apply to claims brought pursuant to certain other statutes.

Section 9 - Recovery of a statutory sum

The Court also rejected the argument that a six-year limitation period should apply where the petitioner seeks monetary relief.

Under section 996, the court has very broad discretion to grant “such order as it thinks fit” to remedy unfair prejudice. This could include ordering the purchase of shares, regulating the company’s affairs or requiring the payment of compensation.

Even where monetary relief is sought, any obligation to pay arises only because of the court’s discretionary order, not directly by virtue of the statute itself. For that reason, an unfair prejudice petition is not an action to recover a sum “recoverable by virtue of an enactment”.

The majority also considered it unprincipled and impracticable for limitation to depend on the form of relief ultimately granted.

Delay still matters

The absence of a statutory limitation period does not mean claims can be brought without consequence after long periods of inactivity.

The Supreme Court emphasised that delay remains highly relevant. Courts can take into account factors such as:

• whether the petitioner knew of the conduct complained of but delayed in acting;
• whether the delay has caused evidential, commercial or third-party prejudice; and
• whether granting relief would be inequitable in the circumstances.

In other words, while there is no statutory time bar, delay remains a powerful discretionary factor.

Why the decision matters

The ruling reinforces the unique nature of unfair prejudice petitions, which are designed to provide flexible relief in shareholder disputes rather than enforce a defined statutory right.

For companies and majority shareholders, the practical message is clear: historic acts can still be scrutinised, particularly where they form part of a wider pattern of conduct, although any delay will still be relevant to the Court’s decision of whether (and if so how) to grant relief.

At the same time, the Supreme Court noted that the Law Commission previously recommended introducing a limitation period, suggesting a three-year period running from when the claimant knew (or ought to have known) of the relevant conduct. Whether Parliament revisits that recommendation remains to be seen.

Broader practical implications

Unfair prejudice petitions remain one of the most powerful tools available to minority shareholders. Section 994 of the Companies Act 2006 is not intended to draw hard and fast lines, and the range of conduct which can amount to unfair prejudice, if the circumstances warrant it, is extremely broad.

Disputes are often fact intensive and years of allegations and parallel accusations of wrongdoing or fraud can lead to costly and protracted trials. The most common remedy is an order requiring the majority to purchase the petitioner’s shares at a court-determined price, which can carry significant financial consequences.

For directors, the risks are particularly acute. Directors can face personal liability as, with very limited exceptions, directors are not permitted to use company funds or assets to defend an unfair prejudice petition. In fact, doing so could in itself constitute unfair prejudice.

Failing to act swiftly on being served with a petition risks default judgment being entered, while the financial and reputational impact of an active claim can harm a company’s governance and relationships with stakeholders. To safeguard your business and reputation, ensure unfair prejudice claims are a risk you remain cognisant of in day-to-day decision making and governance.

If you are concerned about potential claims or are facing allegations of unfair prejudice, seeking expert legal advice is essential. At Shoosmiths, we work proactively with businesses to help them navigate shareholder disputes, clarify their obligations, and mitigate risks. For tailored guidance on unfair prejudice claims or to discuss your specific circumstances, please contact our Disputes team at Shoosmiths.