The UK Supreme Court’s judgment in THG plc v. Zedra Trust Company (Jersey) Ltd[1] conclusively resolved the uncertainty regarding whether statutory limitation periods apply to unfair prejudice petitions. The Supreme Court held – by a majority – they do not, reversing the Court of Appeal and restoring what had been the recognised position for decades.
Background
Zedra, a minority shareholder holding approximately 13.2% of THG, brought an unfair prejudice petition in 2019 under section 994 of the Companies Act. The petition alleged various forms of unfairly prejudicial conduct by THG’s management. The central issue in the matter arose in 2022 when Zedra sought to amend its petition to allege that it was unfairly excluded from a 2016 bonus share issue, which Zedra argued caused it compensatory loss. THG opposed the amendment, contending that the claim was time?barred under the Limitation Act 1980, specifically under:
- Section 8: Imposing a 12 year period for “actions on a specialty”
- Section 9: Imposing a six year period for “actions to recover any sum recoverable by virtue of an enactment”
The High Court and Court of Appeal
At first instance, the High Court held that no limitation period applied, allowing the amendment. However, in a move that surprised many practitioners, the Court of Appeal overturned that decision. The Court of Appeal concluded that:
- Most section 994 petitions fall under section 8 as “actions upon a specialty”, and therefore have a 12 year limitation period.
- Monetary based petitions fall under section 9, attracting a shorter six year limitation period.
Because Zedra sought only monetary compensation, the Court of Appeal held the amendment was time?barred, having been brought more than six years after the 2016 events. This ruling created immediate concern within corporate litigation circles, as it imposed time limits where none had previously been understood to exist.
The Supreme Court
The Supreme Court was asked to determine the single (critical) issue: Do any statutory limitation periods in the Limitation Act 1980 apply to a petition under section 994 of the Companies Act 2006?
The Supreme Court allowed Zedra’s appeal by a 4 – 1 majority, holding that neither section 8 nor section 9 of the Limitation Act applies to section 994 petitions. The majority’s reasoning was as follows:
- Unfair prejudice petitions are not “actions on a specialty” (Section 8).The majority emphasised that an “action on a specialty” historically referred to enforcing obligations created by deeds or statutes (and historical sources as far back as the 19th century were consulted on the issue). Unfair prejudice petitions do not enforce a preexisting obligation but instead invoke a discretionary, equitable jurisdiction. Therefore, they fall outside section 8.
- Section 9 does not apply because section 994 provides a wide discretionary remedy. Section 9 covers claims where a statute mandates payment of a sum of money. By contrast, section 994 empowers the court to make any order it considers appropriate, including but not limited to compensation. Because monetary relief is discretionary – that is, not fixed or automatically recoverable – section 9 cannot apply.
- Delay is governed by equitable principles. Affirming the conventional view, the Supreme Court held that delay should be addressed through equitable doctrines, such as laches or discretionary refusal of relief, and not by imposing statutory bars.
Lord Burrows dissented, finding the Court of Appeal’s reasoning persuasive and preferring an interpretation that subjected section 994 petitions to the section 8 limitation period of 12 years.
Key takeaways
The Supreme Court’s decision restores certainty and continuity in the law. By confirming that no statutory limitation period applies to unfair prejudice petitions, the Supreme Court has ensured that this key shareholder protection mechanism remains flexible, equitable and aligned with its historic purpose. It also underscores the need for companies to maintain proper governance records, as historic conduct may be scrutinised years later.
[1] [2026] UKSC 6.
Contributors
Ben Sharrock-Mason