Supreme Court confirms no statutory limitation for unfair prejudice petitions: THG plc v Zedra Trust Company
Insight
The Supreme Court decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC6 confirms that unfair prejudice petitions under sections 994–996 of the Companies Act (the 'CA') 2006 are not subject to any statutory limitation period.
This judgment has practical significance for both shareholders and company controllers, affirming that unfair prejudice petitions remain a flexible tool that can address even historic conduct. That said, although this decision marks a positive shift for minority shareholders seeking relief under section 994 of the CA 2006, the importance of presenting prejudice petitions in a timely fashion remains.
Background
In 2019, Zedra Trust Company ('Zedra'), a minority shareholder in THG plc (the 'Company'), presented a petition under s 994 of the CA 2006. Zedra alleged that the Company’s affairs had been conducted in way which was unfairly prejudicial to Zedra and made various complaints against the respondents.
Alongside a strike out application, Zedra made an application for permission to amend which gave rise to the limitation issue. Zedra sought an amendment to reflect the allegation that it had been wrongly excluded from a bonus share issue in 2016 and to claim compensation for the associated loss. The respondents accepted that the proposed amendment met the merits test for an amendment but opposed it on the grounds that Zedra were out of time under the Limitation Act 1980 (the 'LA').
Upon determination of application, the High Court relied on the Court of Appeal's decision in Cherry Hill Skip Hire [2022] EWCA Civ 531 in determining that limitation periods are not applicable to s 994 unfair prejudice petitions.
On appeal, the Court of Appeal accepted that it was received wisdom that no limitation applies to s994 petitions but considered that this petition was an exception to this. It held that as 'an action to recover any sum recoverable by virtue of any enactment', the petition was subject to s 9 of the LA 1980 and subject to a six year limitation period. As such, the limitation period had expired.
The Supreme Court's decision
On appeal to the Supreme Court, the principal issues to be determined were:
- Is a claim under s 994 of the CA 2006 'an action upon a specialty' under s 8(1) of the LA 1980 Act, and subject to a 12 year limitation period?
- Or does a shorter limitation period of six years apply because the only relief sought is the payment of money, as an 'action to recover any sum recoverable by virtue of any enactment' falling within section 9(1) of the LA 1980 Act?
- Is the monetary relief claimed in the petition 'equitable relief' within the meaning of section 36(1) of the 1980 Act meaning the limitation periods in sections 8 or 9 are disapplied?
At the heart of the dispute was the Supreme Court's interpretation of sections 8 and 9 of the LA 1980. The Supreme Court noted that the meaning of an 'action upon a specialty' was not self-evident and undertook a detailed consideration of the law including the position in other common law jurisdictions. It concluded that an 'action upon a specialty' is an action to enforce an obligation created by a deed or statute. Sections 994-996 of the CA 2006 do not create substantive obligations as they exist to provide relief in respect of a state of affairs. For this reason, a claim under s994 does not constitute 'an action upon a specialty' so s 8 of the LA 1980 does not apply.
In reaching this conclusion, the Court rejected the 'wider Collin view', in reference to the ruling made in Collin v Duke of Westminster [1985] QB 581. Under this interpretation of Collin, s 8 of the LA 1980 would apply to any claim that can only be brought under a statutory provision.
The next issue was whether the shorter limitation period under s 9 applied on the basis that the relief was confined to a monetary claim under an enactment. The Supreme Court held that the provision did not apply. In its view, s 994 petitions do not give petitioners an automatic right to a particular remedy and any compensation ordered arises from the court’s discretionary judgment. The remedy would not arise because the statute itself makes a specific sum 'recoverable'.
In a related submission, the respondents proposed a way in which s 9 could apply. It set out a 'look and see' approach where courts would determine the true remedy sought so as to determine which limitation period applied. The Supreme Court rejected this approach due to the unworkable nature of time‑barred claims being dependent on the court’s eventual choice of remedy. It is interesting to note that in his dissenting judgment, Lord Burrows commented that the 'look and see' approach has been applied, 'without apparent difficulty' for over 65 years.
On the final issue, the Supreme Court dismissed Zedra's submission that it was claiming for equitable relief. The claim was for unfairly prejudicial conduct in the management of the Company and any relief was available only as a statutory remedy under s996 of CA 2006.
What does this mean for unfair prejudice petitions?
The Supreme Court has confirmed the established position that there is no time limit for bringing an unfair prejudice claim. However, even without a statutory limitation period, an unfair prejudice petition under sections 994-996 of the CA 2006 may fail. The Court may exercise its discretionary power if the petitioner's delay has unfairly affected the respondent or others.
It remains the case that there are clear benefits in presenting petitions quickly. Taking swift action is clearly beneficial for defendants in the interests of not having to deal with stale claims years later. It is also important for claimants who may otherwise risk losing valuable evidence. Ultimately, in practice shareholders seeking this type of redress should not delay once they become aware of unfairly prejudicial conduct. Relying on historic events may still weaken or defeat a claim.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, April 2026
