UK Supreme Court Clarifies Limitation Rules for Unfair Prejudice Claims

On 25 February 2026, the Supreme Court of the United Kingdom delivered a landmark judgment in THG Plc v Zedra Trust Company (Jersey) Ltd, confirming that unfair prejudice petitions brought under section 994 of the Companies Act 2006 are not subject to any statutory limitation period under the Limitation Act 1980.

The ruling overturns the Court of Appeal’s 2024 decision and restores long-established understanding in UK company law.

For those involved in shareholder disputes, this decision has significant strategic implications.

What Is an Unfair Prejudice Petition?

A section 994 petition allows a shareholder to apply to the court where:

  • The company’s affairs are conducted in a manner unfairly prejudicial to their interests; or
  • An act or omission of the company is unfairly prejudicial.

Common examples include:

  • Exclusion from management in quasi-partnership companies
  • Improper dilution of shares
  • Misuse of company funds
  • Failure to declare dividends
  • Breach of shareholder agreements
  • Directors prioritising majority interests

Unfair prejudice claims are one of the most powerful remedies available to minority shareholders in England and Wales.

The Background to the Case

Zedra, a minority shareholder in THG Plc, brought a section 994 petition in 2019 alleging unfair conduct by directors.

When it later sought to amend its petition to include complaints relating to a July 2016 bonus share issue, the company argued that the claim was time-barred because more than six years had passed.

The legal debate centred on whether unfair prejudice petitions fall within:

  • Section 8 Limitation Act 1980 (12-year limit – “action upon a specialty”), or
  • Section 9 Limitation Act 1980 (6-year limit – sums recoverable under statute).

The Supreme Court decisively rejected both arguments.

The Supreme Court’s Key Findings

  • Not an “Action Upon a Specialty” (Section 8)

The Court held that section 994 petitions are not actions enforcing obligations created by statute or deed. Instead, they provide a discretionary remedy where unfair prejudice exists.

Therefore, the 12-year limitation period does not apply.

  • Not a Claim to Recover a Statutory Debt (Section 9)

Even where monetary relief is sought, a section 994 petition is not an action to recover a sum due under statute.

The court has broad discretion under section 996 Companies Act 2006 to grant relief it considers appropriate, including share buyouts, regulation of company affairs, or compensation.

The nature of the remedy does not convert the petition into a statutory debt claim.

  • Delay Still Matters–The Doctrine of Laches

While there is no statutory time limit, delay may still affect relief.

The Court confirmed that:

  • Unreasonable delay may defeat a claim under equitable principles.
  • The court will consider fairness, evidential prejudice and conduct.

There is therefore no “open-ended licence” to bring stale claims without consequence.

Why This Decision Is Important

For Minority Shareholders

  • Historic unfair conduct may still be actionable.
  • Claims are not automatically defeated by the passage of six or twelve years.
  • Shareholders who only later discover misconduct may still seek relief.

This strengthens minority shareholder protection in the UK.

For Directors and Majority Shareholders

The ruling removes reliance on expiry of statutory limitation as a defence strategy.

Practical implications include:

  • Increased need for robust governance documentation.
  • Greater importance of maintaining long-term corporate records.
  • Heightened exposure in shareholder exit disputes.
  • Strategic reconsideration of how majority control is exercised.

Directors should assume that decisions affecting minority interests may be scrutinised years later.

A Divided Court

The judgment included a strong dissent from Lord Burrows, who favoured applying limitation periods for policy reasons, including protection against stale claims and evidential deterioration.

The split underscores the legal complexity of the issue and increases the likelihood that Parliament may revisit the question in future.

Until then, the position is clear:

There is no statutory limitation period for unfair prejudice petitions under section 994 Companies Act 2006.

Strategic Considerations in Shareholder Disputes

Unfair prejudice litigation is highly fact-sensitive and commercially strategic. Timing, evidence preservation and pre-action positioning are critical.

Early legal advice can:

  • Protect minority interests before relationships deteriorate further
  • Mitigate litigation exposure for directors
  • Facilitate negotiated exits
  • Preserve business value

At KTS Legal, we advise both minority shareholders and directors in complex shareholder and corporate governance disputes across London and England & Wales.

If you are involved in a shareholder dispute, facing exclusion from management, or concerned about historic corporate conduct, our Corporate/Commercial Litigation team can provide strategic and confidential legal assistance and advice. Please do not hesitate to contact us on 020 8367 0505 or send an email to info@ktslegal.com.