Supreme Court Confirms: No Limitation Period for Unfair Prejudice Petitions

The Supreme Court has handed down their decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, bringing clarity to the issue of whether unfair prejudice petitions under section 994 of the Companies Act 2006 (CA 2006) are subject to a limitation period under the Limitation Act 1980 (LA 1980)? The answer is no (4:1 majority).

An unfair prejudice petition (UPP) is a claim a shareholder can bring under sections 994–996 of the Companies Act 2006 when the company’s affairs are being run in a way that is unfairly harmful to their interests. It is a remedy granting mechanism only, meaning the court can step in to fix the unfairness, but these sections 994-996 do not themselves create the underlying duties or obligations.

This judgment overturns the decision of the Court of Appeal and provides greater clarity for shareholders, particularly minority investors, who may become aware of wrongdoing only years after the events complained of. (See paragraphs 167–171 of judgment). It also reinforces the need for directors and companies to maintain good record keeping of historic conduct. 

Although the Supreme Court clarified that there is no limitation period, unjustified delay by the petitioner in initiating such action, which has an adverse effect on a respondent or other persons, could be a factor militating against the grant of a remedy i.e. you still need to act promptly. 

For now, we have clarity, but whether to introduce a limitation period (as previously recommended by the Law Commission) is for Parliament to decide, not the courts. (See paragraph 169).

Background to the Dispute

Zedra, a minority shareholder in THG, issued an unfair prejudice petition in 2019. In 2022, it sought to amend the petition to include a new allegation relating to exclusion from a 2016 bonus share issue. 

THG argued that any such claim was time barred under the Limitation Act 1980, referring to: 

• Section 8: a 12 year period for “actions upon a specialty”.
• Section 9: a 6 year period for “sums recoverable by virtue of an enactment”. 

The High Court rejected the limitation defence. 

The Court of Appeal disagreed, holding that unfair prejudice claims were subject to s.8, unless a monetary remedy was sought, in which case s.9 imposed a shorter six-year period. Zedra appealed (see paragraphs 20-22 of judgement). The Supreme Court sided with the High Court, restoring the long-held view that no statutory limitation period applies at all. 

Why the Supreme Court said limitation does not apply

The Supreme Court’s analysis focused on:

(1) The meaning of the archaic words an “action upon a specialty”; 

(2) developments in statutes of limitation enacted since the 17^th century; 

(3) the approach taken by other jurisdictions; and,

(4) the statutory language used in CA 2006 sections 994 and 996.

The key points in the judgment were: 

A section 994 petition is not an “action upon a specialty” (s.8 LA 1980)
There has never been a statutory definition of a specialty, but historically, “an action upon a specialty, when applied to a statute, was an action for the payment of a debt (see paragraphs 110–111 of judgment). 

The Supreme Court held that a section 994 petition does not create an enforceable obligation but merely a right to petition the court for relief in respect of a state of affairs (see paragaphs115–117 of judgment). 

Monetary relief under section 994 is discretionary—not a statutory entitlement
The Supreme Court also considered whether section 9 of the LA 90 (any sum recoverable by virtue of any enactment) applies to a petition under section 994 if the relief sought is confined to or includes a monetary claim. 

It found section 9 does not apply in these circumstances, as section 996 gives the court broad discretion to make such orders as it thinks fit, even if monetary relief is claimed by the petitioner. 

The Supreme Court described it as bordering on the absurd to apply a limitation period solely where the Court ultimately chose to award money. As the relief is discretionary and multifaceted, s.9 cannot apply. (see paragraphs 135–156 of judgement).

So where does delay fit in?

Although unfair prejudice petitions are not time barred, delay still matters. (see paragraphs 167–171 of judgment). The judgment emphasises that courts retain wide discretion to refuse relief, for example where, an unjustified delay has an adverse impact on the respondent or third party.   

In practice, this means: 

• Older complaints may proceed to trial.
• Unjustified delay which has an adverse impact may militate against relief being granted.

Stepping back…. what does this mean for minority shareholders and directors

For minority shareholders, the decision removes a technical route for respondents to exclude older complaints and recognises that minority investors often lack early access to crucial information. Shareholders can now pursue unfair prejudice allegations whenever they come to light, provided they can justify any delay. 

For directors, the judgment requires a shift in risk assessment. Historic conduct, for example, on share issues and governance failures, may resurface years later. Good record keeping and transparent governance are now more important than ever. 

What happens next…

But the Court was not unanimous. Lord Burrows’ dissent highlights an ongoing tension: he warned that the majority’s approach may risk creating an open‑ended liability (interpreted from paragraphs 180-183 and 241), arguing instead that section 994 should fall within the Limitation Act 1980, normally with a 12 year period, and a 6 year period where compensation is sought. (Please see paragraphs 205–224).

That dissent raises an important policy question that the majority deliberately left open: Should Parliament now step in to create a bespoke limitation period for unfair prejudice claims, bringing predictability for companies and directors, or does the current, highly flexible, discretionary framework serve shareholders better? (Please see paragraphs 169 – 171).

Until that is resolved, the message is clear: historic conduct can still have present day consequences, and questioning their timing alone will rarely be enough to make an unfair prejudice petition go away. 

This article was written by Matthew Kaltsas-Walker, Amy Khodabandehloo, Stacie Bourton, and Jacob Berger.