Supreme Court confirms no statutory limitation period for unfair prejudice petitions

The Supreme Court has now delivered its long‑awaited judgment in THG plc v Zedra Trust Company (Jersey) Ltd (“Zedra”) [2026] UKSC 6. At the risk of sounding slightly forensic about it, this is one of those cases where the Court has effectively pressed the “reset” button on an area many practitioners assumed had been settled years ago, until the Court of Appeal unexpectedly unsettled it, before restoring coherence once again. In a sweeping (although not unanimous) decision, the Court held that unfair prejudice petitions brought under sections 994–996 of the Companies Act 2006 are not subject to any statutory limitation period under sections 8 or 9 of the Limitation Act 1980. 

Section 994 petitions are one of the tools available to claimants following the breakdown of a company relationship and there are plenty of options available as to the remedy which a claimant can seek. Our previous piece How not to manage your business on the breakdown of a relationship - Stevens & Bolton LLP gives an overview of unfair prejudice petitions more widely.

A limitation period is the period during which a claimant has the right to commence proceedings. Different types of claims have different limitation periods, often prescribed by statute but can be set out in contract too. When a limitation period expires for a particular type of claim, a claimant is generally barred from bringing the claim. Limitation periods are designed to ensure finality in litigation, protect defendants from stale claims (where evidence may have deteriorated or been lost), encourage claimants to act promptly, and promote legal certainty for all parties. The primary statute governing limitation of actions in England and Wales is the Limitation Act 1980 (the “Limitation Act”), the interpretation of which is the focus of this judgment.

Although the ruling is of significance, the outcome restores what had been treated as “received wisdom” (to coin the phrase of Lewison LJ in the Court of Appeal): that unfair prejudice petitions lie outside the Limitation Act and that delay is instead managed through the court’s discretionary jurisdiction (an approach rooted in equity and in the flexible nature of the relief available). 

Background

Zedra, a minority shareholder in THG plc, sought to amend its section 994 petition to allege that it was unfairly excluded from a bonus share issue on 11 July 2016. Zedra alleged that if the directors had performed their duties, it would have received its entitlement to shares which it would have converted immediately before the Company’s IPO in 2020. Zedra argued that it would have then sold those shares, with the loss being the sum which it would have received in so doing (the “July 2016 Complaint”). The amendment was sought more than six years after the alleged unfair prejudice. 

In the first instance, Fancourt J permitted the amendment, observing that the Limitation Act does not have a limitation period that applies to petitions under section 994. Further, he was of the view that unfairly prejudicial conduct is not a cause of action, but a complaint, the remedy for which, if proved, is at the discretion of the court.  The Court of Appeal disagreed, holding that because Zedra sought monetary relief, the claim fell within section 9 of the Limitation Act as an “action to recover [a] sum recoverable by virtue of [an] enactment” and was therefore subject to a six‑year limitation period. Given that permission for the amendment had not been given within the time, the Court of Appeal therefore held that the July 2016 Complaint was time-barred. 

Zedra appealed, arguing that although section 994 petitions do not fall within the wording of either sections 8 or 9 of the Limitation Act, the intention behind the Companies Act 2006 legislation was that no statutory limitation period should apply to unfair prejudice petitions, given the flexibility necessarily required to petition the court for a discretionary remedy. 

The issues considered by the Supreme Court

The Court addressed three central questions: 

1. Is a section 994 petition an “action upon a specialty” under section 8 of the Limitation Act (12‑year limitation period unless a shorter period applies)?
   1. Is a claim for monetary relief under section 994 an “action to recover any sum recoverable by virtue of any enactment” under section 9 of the Limitation Act (six‑year limitation period)?
      1. If either of the above is affirmative, is the monetary relief claimed “equitable relief” within the meaning of section 36 of the Limitation Act, and which therefore disapplies those limitation periods (i.e. an equitable relief carve‑out)?

The Supreme Court’s majority ruling

1. Section 8 does not apply: unfair prejudice petitions are not “actions upon a specialty”

The Court recognised that “the meaning of the somewhat archaic words an “action upon a specialty” is not self-evident.”[1] Historically an “action upon a specialty” involved an action of covenant or an action of debt.  

The judgment trots through the legislative history of the limitation statutes and relevant case law. It included analysis of the first occasion on which the courts developed the concept of an action upon a speciality beyond monetary claims, in the decision of the Court of Appeal in Collin v Duke of Westminster [1985] QB 581 (“Collin”). In Collin, the Court of Appeal stated that an action upon a speciality went beyond actions to enforce the payment of a sum of money due under statute, to include an action to enforce a non-monetary statutory right, such as the right to obtain the freehold of leased property. 

The Court also examined how other common law jurisdictions (e.g. Australia, Canada, Hong Kong, and New Zealand) treat the concept of an action upon a specialty. This analysis helped illuminate the historical meaning of “specialty” and supported the majority’s conclusion that section 8 of the Limitation Act should be read narrowly.

The Supreme Court held that the Court of Appeal was wrong to apply the “wider” Collin view (which focuses on the right under a statute to bring proceedings) to unfair prejudice petitions. The Supreme Court held that sections 994–996 of the Companies Act 2006 do not create statutory obligations. They create a broad remedial jurisdiction enabling the court to grant whatever relief it thinks is appropriate in response to a state of unfairly prejudicial conduct: “They neither contain nor enforce obligations.”[2] In other words, a section 994 petition does not enforce any statutory obligation and therefore, does not engage section 8 of the Limitation Act. 

2. Section 9 does not apply: monetary relief under s.996 is not “recoverable by virtue of an enactment”

Whilst the Court held that a claim for compensation for loss suffered by a shareholder might be capable of falling within section 9 of the Limitation Act[3], it held that a claim under section 994 is not a claim to enforce a liquidated or unliquidated obligation under a statute, but a claim that the court uses its discretion to make an order as it thinks fit. Section 9 applies where the statute itself creates a monetary entitlement. 

The Court firmly rejected the “look and see” doctrine used in earlier cases such as Priory Garage and held that section 9 of the Limitation Act does not apply to a petition under section 994 of the Companies Act 2006.  

3. Section 36 not determinative

Because sections 8 and 9 were held not to apply at all, section 36 (which disapplies both for equitable relief) did not alter the outcome. 

The overall outcome of the judgment was that an application under section 994 of the Companies Act 2006 is not subject to the limitation periods in sections 8 or 9 of the Limitation Act.

Implications: what does this mean for directors, shareholders and petitioners? 

It is now definitively settled law that unfair prejudice petitions, even amendments, may proceed regardless of when the alleged prejudice occurred. 

However, the Supreme Court did not go as far as to define exactly what an action upon a specialty is. Obiter comments suggest they disagreed with the wider Collins interpretation, leaving the door ajar for potential Parliamentary legislation to clarify the position. 

Notwithstanding that there is there is no limitation period for unfair prejudice petitions, the court can (and will) refuse relief where delay is unjustified and causes prejudice. Delay may influence the nature of the relief granted (or whether any relief is granted at all). This maintains the pressure on petitioners to act promptly and on respondents to raise delay‑based objections early.

The absence of a limitation period reopens the possibility of challenges relating to historical transactions, equity restructurings, and long‑past governance decisions. Companies may need to revisit document retention policies and ensure board decisions, even historic ones, are properly recorded and defensible many years later.

Petitioners may feel more confident in bringing late amendments based on older facts. Respondent companies and directors will need to rely heavily on discretionary arguments and prejudice-based defences (for example, the delay corrupts the fairness of the case in some way, there has been a document destruction policy which effects the availability of evidence, or perhaps the petitioner has sought to profit from the delay).