13/04/2026
This article is written by Stephanie Sandford-Smith and Alex Horan.
The Supreme Court has recently confirmed that a shareholder’s unfair prejudice petition under ss994 – 996 Companies Act 2006 (“CA”) is not subject to the limitation periods within the Limitation Act 1980, even in circumstances in which a petition seeks monetary relief.
This decision re-establishes that there is no time bar to bringing an unfair prejudice petition and overturns the Court of Appeal’s 2024 judgment, restoring the previous 40 year status quo.
Background
THG plc (“THG”) is a global consumer brands group. In 2019, Zedra Trust Company (Jersey) Ltd (“Zedra”), presented a petition under section 994 of the CA.
A section 994 petition allows company members to apply to the Court for relief if the company’s affairs are conducted in an “unfairly prejudicial” manner.
Zedra’s claim was based on the fact that, when Zedra acquired shares in THG in 2011, it held 13.2% of its issued share capital and 13.37% of the members’ voting rights. By early 2019, Zedra’s holdings had reduced to 8.34% of the issued share capital and 9.63% of the voting rights.
THG applied to strike out the claims. Some of the claims were struck out, but Zedra’s allegations that the directors of THG had removed valuable co-sale rights attached to its shares and failed to provide information to it as a shareholder survived.
Zedra then applied to amend the petition to refer to an allegation of unfair prejudice with regard to its exclusion from the issuance of bonus shares worth approximately £1.8 to £2 million in 2016.
THG objected to the amendment, stating that there was an arguable limitation defence under section 9 of the Limitation Act.
Section 9 states that “an action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued”.
At first instance, the High Court held that the claim was not time-barred as no limitation period applied relying on Cherry Hill Skip Hire Ltd [2022] EWCA Civ 531.
THG appealed to the Court of Appeal, which overturned the High Court decision. The Court of Appeal held that petitions under section 994 Companies Act 2006 were subject to a 12 year limitation period under s 8 Limitation Act 1980 and that claims for monetary relief under section 994 were an “an action upon a specialty” and were therefore subject to the 6 year limitation period under s 9 Limitation Act 1990.
The Judgment
The Supreme Court overturned the Court of Appeal decision holding that no statutory limitation period applies to unfair prejudice petitions. In coming to this decision, the Supreme Court’s found:
- An unfair prejudice petition is not an action upon a specialty and therefore does not fall within the 12-year time limit imposed by section 8 Limitation Act 1980.
- That petitions seeking monetary compensation are not an “action to recover any sum recoverable by virtue of any enactment” under section 9 of the Limitation Act 1980.
- That differing types of relief sought should not be subject to different limitation periods under the Limitation Act.
- It was a clear legislate choice to omit a limitation period and in circumstances where Parliament intends to impose a limitation period on statutory remedies, it does so expressly.
The Court did note that this does not mean that a petitioner should delay, but that any delay should be considered by the Court in the exercise of its general discretion as to whether to make an order. The Supreme Court said that there is an analogy to be drawn with the equitable doctrine of laches, whereby a delay makes it unjust to grant relief.
Key takeaways
For minority shareholders, there is no longer a risk of a claim being dismissed solely because the alleged unfairly prejudicial conduct occurred more than six years ago.
Nevertheless, the lack of a marked limitation period does not entitle a petitioner to relief irrespective of delay. A Court can use its discretion to refuse an order where there has been a delay. Crucially, delays in bringing claims make it harder to show that a party has suffered unfair prejudice and to show what loss has been suffered as a result.
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