Supreme Court confirms no time bar for unfair prejudice claims

The Supreme Court has confirmed that petitions for unfair prejudice under section 994 of the Companies Act 2006 (CA 2006) are not subject to any statutory limitation period.

In a 4-1 majority decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, the Supreme Court overturned the Court of Appeal and restored what practitioners had assumed to be the established position: that the passage of time does not affect the rights of minority shareholders to seek relief for unfairly prejudicial conduct of a company’s affairs. 

 

Background

The case concerns an unfair prejudice petition brought by Zedra Trust Company (Jersey) Ltd (Zedra), a minority shareholder in the appellant company (Company). During the proceedings, Zedra sought to amend its petition to include a further allegation that it had been unfairly excluded from a bonus share issue dating back to 2016 and to claim compensation for the resulting loss.

The Company resisted the amendment, arguing that any monetary claim was time-barred by section 9 of the Limitation Act 1980 (the Limitation Act), which imposes a six‑year limitation period on claims for “sums recoverable by virtue of any enactment”.

The High Court rejected that argument, holding that no limitation period applies to unfair prejudice petitions. The Company appealed to the Court of Appeal. The Court of Appeal allowed the appeal, holding that unfair prejudice petitions were subject to both (i) section 9 of the Limitation Act; and (ii) section 8, which imposes a 12-year limitation period on “actions upon a specialty”.

 

The Supreme Court’s decision

The Supreme Court (Lord Burrows dissenting) reversed the Court of Appeal’s decision, confirming that neither section 8 nor section 9 of the Limitation Act applies and therefore no statutory limitation period governs unfair prejudice petitions. In other words: there is no time limit for bringing unfair prejudice claims.

The following key points arise from the judgment:

Unfair prejudice petitions are not “actions upon a specialty”

a) The Court of Appeal was wrong to have concluded that section 8 of the Limitation Act extended to all statutory causes of action. The essence of an “action upon a speciality” was that it enforced obligations created by deed or statute.

b) The statutory regime at sections 994 to 996 of the CA 2006 does not create or enforce any obligations. Instead, it gives the court remedial powers to rectify an unfairly prejudicial state of affairs.

c) An unfair prejudice petition therefore cannot be classed as an “action upon a specialty” under section 8 of the Limitation Act 1980.

Unfair prejudice petitions are not claims for “sums recoverable by virtue of any enactment”

d) The Court of Appeal was also wrong in concluding that, where an unfair prejudice petition seeks monetary relief, section 9 of the Limitation Act applied.

e) In addressing an unfair prejudice petition, the Court has a very wide discretion to decide the appropriate orders to make. While a petitioner might seek a monetary remedy, the Court could conclude that relief should take other forms or not order any relief at all. In the circumstances, it would be illogical for the applicable limitation period to depend on the relief claimed.

f) It was also difficult to see that any sensible regime would allow the Court to first determine the appropriate relief to grant at the end of trial before deciding whether a petition was time-barred.

g) For those reasons, unfair prejudice petitions (even where a request for monetary relief is included) fall outside of the scope of section 9 of the Limitation Act.

The Court may take into account unjustified delay

h) The Supreme Court acknowledged that it was in the public interest that stale claims are not allowed to proceed. Although no statutory limitation period applies to unfair prejudice petitions, the Court when exercising its discretion to grant relief may take into account any unjustified delay by the petitioner which has an adverse effect on a respondent or any other persons.

 

Key takeaways

The Supreme Court’s decision reinforces the breadth and effectiveness of unfair prejudice petitions as a remedy for minority investors. Historic conduct by a company’s directors or shareholders, however remote, can be exposed and challenged. 

For management teams and in-house counsel, the decision confirms the need for robust corporate governance and litigation risk management, including:

a) Following proper procedures and maintaining clear contemporaneous records of board actions or decisions; 

b) Ensuring that the treatment of minority investors is defensible, particularly when raising share capital or implementing transactions that affect their member’s rights and/or economic interests;

c) Maintaining transparent communications with shareholders about company affairs; and

d) Proactively remediating any historic governance failures or addressing any shareholder grievances in order to avoid potential litigation.

For investors, the decisions underscores the importance of conducting due diligence on shareholder arrangements and past corporate actions, as well as securing appropriate buyer protections against any unresolved or latent shareholder disputes.