Supreme Court rules no statutory limitation period for unfair prejudice petitions
In a significant judgment handed down on 25 February 2026, the UK Supreme Court confirmed that shareholders bringing unfair prejudice petitions under section 994 of the Companies Act 2006 (“CA 2006”) are not subject to any statutory limitation period under the Limitation Act 1980 (“LA 1980”). The decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6 overturns the Court of Appeal's 2024 judgment and restores over 40 years of received wisdom that such petitions can be brought without a fixed time bar, although delay may still affect a petitioner’s ability to obtain relief.
Background
Zedra Trust Company (Jersey) Ltd (“Zedra”), a minority shareholder in THG plc (the “Company”), presented an unfair prejudice petition under section 994 of the CA 2006 in January 2019 (the “Petition”). The Petition concerned various complaints about conduct by the Company’s former and current directors.
The issue of limitation was raised when Zedra applied to amend the Petition to include a further allegation that Zedra had been unfairly excluded from a bonus share issue in July 2016, causing it losses estimated at approximately £1.8 to £2 million (the “July 2016 Complaint”). The Company and its directors opposed an amendment to the Petition concerning the July 2016 Complaint, arguing that any claim arising from those events was statute-barred because more than six years had elapsed.
At first instance, the High Court allowed the amendment, holding that no limitation period applied to petitions under section 994 of CA 2006. The Company appealed to the Court of Appeal, which disagreed with the first instance decision and held that unfair prejudice petitions seeking monetary compensation fall within section 9 of the LA 1980 (the time limit for actions to recover sums due under statute), and are therefore subject to a six‑year time limit (emphasis added). More broadly, the Court of Appeal held that, as the unfair prejudice petition was an “an action upon a specialty” within section 8 of the LA 1980, it was subject to a 12-year limitation period. Zedra appealed this decision to the Supreme Court, arguing that section 994 petitions do not fall within sections 8 or 9 of the LA 1980 and that it was Parliament’s intention in enacting sections 994-996 of the CA 2006 that those sections were not to be subject to statutory limitation periods.
The issues before the Supreme Court
The court considered three principal questions:
- Whether an unfair prejudice petition is an “action upon a specialty” under section 8 of the LA 1980, attracting a 12-year limitation period.
- Whether a petition seeking only monetary relief is an “action to recover any sum recoverable by virtue of any enactment” under section 9 of the LA 1980, attracting a six-year limitation period.
- Whether the monetary relief sought in this case was considered “equitable relief” under section 36 of the LA 1980 and therefore disengaged the limitation periods set out in sections 8 and 9 of the LA 1980.
The Supreme Court’s decision
The Court considered the answers to the above issues arose out of the statutory interpretation of sections 8 and 9 of the LA 1980. The correct approach to statutory interpretation is for a court to determine, objectively, what meaning a reasonable legislature intended, considering the words in their statutory and legal context.
1. Section 8 LA 1980: The meaning of “action upon a specialty”
Applying this approach and having conducted a detailed historical analysis of the case law in the UK and other common law jurisdictions, the Court held that an unfair prejudice petition is not an action upon a specialty (and as such it does not fall within the 12-year time limit imposed by section 8). Writing for the majority, Lord Hodge and Lord Richards concluded that the essence of an action upon a specialty is that it is an action to enforce an obligation created by a deed or statute (emphasis added). Sections 994–996 of the CA 2006 do not create or enforce any substantive obligations; rather, they provide a mechanism for the court to grant discretionary relief where a state of affairs exists that unfairly prejudices shareholders.
2. Section 9 LA 1980: The meaning of “any sum recoverable by virtue of any enactment”
The question here was whether section 9 applied to a petition if the relief sought was only, or included, a monetary claim. The majority also held that section 9 does not apply to unfair prejudice petitions, even if a petition included a request for monetary relief. The Court emphasised that it had the widest possible discretion when deciding the nature of the relief available in respect of the matters complained of in a claim under section 994 of the CA 2006. While a petition will usually specify the orders that the petitioner wishes the Court to make, there is no entitlement to any particular form of relief – it is for the Court to decide what it considers to be the appropriate order to make, by reference to the state of affairs existing when it gives judgment. A claim under section 994 of the CA 2006 is therefore not a claim to enforce a liquidated or unliquidated obligation arising under a statute.
The majority also rejected the “look and see” approach adopted by some earlier cases, which would have applied different limitation periods depending on whether monetary or non-monetary relief was granted. Such an approach, they concluded, would produce unworkable results, potentially requiring a court to wait until the end of a trial before determining whether a claim was time-barred (potentially expending unnecessary time and resources) and was not what they considered Parliament intended.
3. Section 36: Equitable relief
As the majority held that neither section 8 nor section 9 created a limitation period for unfair prejudice petition, the other submissions advanced by Zedra were only considered briefly:
- It was held that Zedra was not claiming equitable relief but rather statutory relief available under section 996 of the CA 2006;
- While Zedra argued that a settled understanding as to the meaning of a statute is an aid to interpreting ambiguous statutory provisions, the Court noted that the scope and role of a “settled understanding” had not been authoritatively resolved, and declined to deal with this argument further as it did not apply in this case; and
- While there are policy arguments for imposing limitation periods, it is not a good policy argument to impose a limitation period on an unfair prejudice claim merely because it might otherwise provide a means for pursuing a claim in circumstances where other types of claims may be time-barred.
The dissent
Lord Burrows dissented, arguing that an unfair prejudice petition did fall within section 8 as an action upon a specialty because the cause of action would not exist apart from the statute; and that arguably the relevant statute did impose an obligation on the defendants, namely not to conduct the affairs of the company so as to unfairly prejudice the petitioner. Where monetary relief is sought, Lord Burrows would have applied section 9 and the six-year time limit. He considered that policy strongly favoured the imposition of limitation periods, given they protect defendants from stale claims; protect against the deterioration of helpful evidence; and incentivise swift action, which may also reduce costs.
Comment
The fact that this judgment contains a dissenting judgment demonstrates the significance and complexity of the issues at stake.
The majority decision provides welcome certainty for minority shareholders, confirming that historical unfair prejudice can be pursued without facing a hard limitation cut-off. This may also assist those shareholders who lack the relevant knowledge to make a claim for unfair prejudice at an earlier point in time, and where such matters only come to light later. However, unexplained delay may still result in the court refusing relief. The Supreme Court made clear that any delay in bringing petitions will be governed by the equitable doctrine of laches. This is consistent with the Law Commission’s observation in its report Limitation of Actions[1] that delay may bar relief in unfair prejudice cases. That report also recommended a three-year limitation period running from when the petitioner knew or should have known of the event giving grounds for the petition. Lord Burrows, in his judgment, expressly urged the recommendations to be implemented. However, as the Supreme Court rightly noted, whether there should be such a limitation period is a question of policy for Parliament; it is not for the courts to determine.
From the perspective of directors and majority shareholders, the judgment confirms that they cannot rely on the expiry of six or 12 years to achieve automatic immunity from unfair prejudice claims. This may impact both the extent and duration of corporate record-keeping, given the relevance of contemporaneous evidence both in justifying any decisions or conduct subsequently complained of; and in supporting any allegations of delay by the minority shareholder in bringing its claim.
More broadly, the judgment offers helpful judicial commentary on the meaning and scope of sections 8 and 9 of the Limitation Act 1980. The Supreme Court acknowledged the difficulty in interpreting these provisions, noting that their “true meaning lies deep in our legal history”, and suggested that Parliament might consider using clearer language if it were to reform the rules of limitation in future. For practitioners advising on shareholder disputes, this decision is essential reading.
For further information, please email the authors or your usual CMS contact.
[1] Limitation of Actions (2001) (Law Com No 270), paragraphs 4.214 – 4.216.
