THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6
The Supreme Court has confirmed that there is no statutory time limit for bringing an unfair prejudice petition under section 994 of the Companies Act 2006. In THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, handed down on 25 February 2026, the Court held by a majority of four to one that the Limitation Act 1980 does not apply to these claims. The decision reverses the Court of Appeal's 2024 ruling and restores the position that had been understood for over 40 years.
If you are a minority shareholder in a private or public company and believe the business has been run in a way that has damaged your interests, this judgment has real implications for how and when you can seek legal redress.
Summary
- What Is an Unfair Prejudice Petition?
- The Background to THG v Zedra Trust Company (Jersey) Ltd
- What Did the Courts Below Decide?
- What Did the Supreme Court Hold, and Why?
- What Is the Dissent and Why Does It Matter?
- Does Delay Still Matter Without a Time Limit?
- What Does This Mean for Insolvency Act Claims?
- Could the Law Change Again?
- What Should Minority Shareholders Do Now?
What Is an Unfair Prejudice Petition?
A Section 994 Petition, or Unfair Prejudice Petition, is one of the most important remedies available to a shareholder who believes the company's affairs are being run in a way that unfairly damages their interests. Minority shareholders most commonly use it in private companies, those holding less than 50% of the shares, who find themselves unable to influence decisions made by majority shareholders or directors.
Common examples of unfair prejudice include: exclusion from management participation that was agreed at the outset; shares diluted without proper justification; the diversion of company business to another entity owned by the majority; and the deliberate withholding of dividends while the majority extracts value through other means. The remedy is flexible. A court can order a buyout of your shares at fair value, require compensation to be paid, or grant other relief it considers appropriate.
Section 994 does not itself impose obligations on directors or shareholders. It creates a right to petition the court for relief, where unfairly prejudicial conduct has occurred or is continuing. That distinction between a statute that creates an obligation and one that provides a remedy proved to be the central question in this case.
The Background to THG v Zedra Trust Company (Jersey) Ltd
Zedra Trust Company (Jersey) Ltd was a minority shareholder in THG Plc. In 2019, it presented a petition under section 994 alleging that THG's affairs had been conducted in a way that was unfairly prejudicial to its interests.
In 2022, Zedra applied to amend its petition to include a complaint about a bonus share issue in July 2016, during which 16,802 shares were allotted to four other shareholders but not to Zedra. Zedra argued that this exclusion involved breaches of directors' duties and sought equitable compensation, estimated at between £1.8 million and £1.9 million, to reflect the loss suffered.
THG opposed the amendment on the basis that it was time-barred. Because Zedra was seeking only monetary compensation, THG argued that the claim fell within section 9 of the Limitation Act 1980, which imposes a six-year time limit on "an action to recover any sum recoverable by virtue of any enactment." By December 2022, when the application was heard, more than six years had passed since the July 2016 events. Whether Zedra's amendment could proceed depended entirely on whether a limitation period applied.
What Did the Courts Below Decide?
At first instance, the High Court (Justice Fancourt) permitted the amendment, holding that no limitation period applied to section 994 petitions. That decision followed the Court of Appeal's earlier ruling in Bailey v Cherry Hill Skip Hire Ltd [2022] EWCA Civ 531, which had approved what practitioners had long regarded as settled law.
The Court of Appeal reversed that decision in February 2024. Going further than either party had argued, it concluded that all section 994 petitions were subject to a 12-year limitation period under section 8 of the Limitation Act 1980 as "actions upon a specialty." Where a petition sought only monetary relief, it held that the shorter six-year period under section 9 applied instead. Because Zedra was seeking compensation alone, the Court of Appeal found the amendment time-barred.
This ruling caused considerable surprise among practitioners. It overturned more than 40 years of received wisdom, reflected in the leading textbooks and confirmed in a string of High Court decisions. Zedra appealed to the Supreme Court.
What Did the Supreme Court Hold, and Why?
The Supreme Court, by a majority of four to one, allowed Zedra's appeal and restored the previously understood position: no statutory limitation period applies to unfair prejudice petitions under section 994. The majority judgment was given by Lord Hodge and Lord Richards, with whom Lord Briggs and Lord Lloyd-Jones agreed.
Was a Section 994 Petition an "Action Upon a Speciality"?
Section 8 of the Limitation Act 1980 imposes a 12-year limitation period on "an action upon a speciality." After a detailed review of English law dating back centuries, including earlier limitation statutes and the work of the Law Reform Committee whose recommendations formed the basis of the 1980 Act, the majority concluded that an action upon a speciality is an action to enforce an obligation created by a deed or statute. It is not enough that a claim can only be brought by virtue of a statute.
Section 994 of the Companies Act 2006 does not create any obligations. It provides a remedy where unfairly prejudicial conduct has occurred. The obligation alleged to have been breached, for example, a director's fiduciary duty, arises elsewhere, not from section 994 itself. A section 994 petition is therefore not an action upon a speciality, and section 8 does not apply.
Was a Section 994 Petition an "Action to Recover Any Sum Recoverable by Virtue of Any Enactment"?
Section 9 of the Limitation Act 1980 imposes a six-year limitation period on "an action to recover any sum recoverable by virtue of any enactment." The Court of Appeal had held that where a petition sought only monetary relief, this six-year period applied.
The majority rejected that approach. Under section 996 of the Companies Act 2006, the court has the widest possible discretion to grant "such order as it thinks fit for giving relief in respect of the matters complained of." Any monetary order a court makes arises from the exercise of that discretion, not directly by virtue of sections 994 or 996 themselves. The petitioner has no entitlement to a specific form of relief; the court decides what, if anything, to order.
The majority also rejected the "look and see" approach, by which courts had previously examined the substance of the relief sought to determine which limitation provision applied. They considered it made no practical sense to require the court to wait until the conclusion of a trial to determine whether the action was time-barred in the first place.
What was the Dissenting Judgment and Why Does It Matter?
Lord Burrows dissented. He concluded that both sections 8 and 9 of the Limitation Act applied to unfair prejudice petitions and would have dismissed Zedra's appeal.
The dissent matters because it identifies the arguments likely to inform any future legislative reform. Lord Burrows took the view that, where statutory language is ambiguous, a purposive interpretation should prevail, and that the purposes served by limitation periods (discouraging stale claims, providing certainty, protecting respondents from having to defend historic conduct) favoured imposing a time limit. He did not consider there was a principled basis for departing from the "look and see" approach, which he described as well-established and workable.
He also pointed to the Law Commission's own recommendation that unfair prejudice petitions should be subject to a limitation regime. One of five Supreme Court justices took this view, and the Law Commission has reached the same conclusion. That alone is a reminder that the law here may not remain settled indefinitely.
Does Delay Still Matter Without a Time Limit?
Yes, and this is one of the most practically important points to understand.
The absence of a statutory limitation period does not mean a petitioner can wait indefinitely and still expect a remedy. The court retains a broad discretion under sections 994 to 996 of the Companies Act 2006 to refuse or limit relief where a petitioner has delayed without good reason.
Where the delay has caused prejudice to the respondent, because witnesses are no longer available, documents have been lost, or the respondent has acted in reliance on the absence of a claim, the court can take that into account when deciding whether to grant relief and, if so, what relief to order. This operates in a similar way to the equitable doctrine of laches, though the Supreme Court confirmed that section 994 claims are not equitable relief to which laches strictly applies.
Petitioners who sit on their rights and delay bringing a claim for years face a real risk of being refused a remedy, even if they are not formally time-barred. Evidence also weakens over time, making it harder to prove both that the conduct was unfairly prejudicial and what loss resulted from it. The clear message from the Supreme Court is that the absence of a statutory limitation period should not be read as an invitation to bring claims based on events from the distant past without good reason for the delay.
What Does This Mean for Insolvency Act Claims?
One of the less widely reported aspects of the judgment is its potential impact on claims under the Insolvency Act 1986. This matters to directors, insolvency practitioners, and anyone involved in restructuring or company failure.
The majority expressly disapproved three cases that had previously been treated as authority for the application of section 9 of the Limitation Act 1980 to statutory insolvency claims:
- Re Priory Garage (Walthamstow) Ltd [2001] (transactions at an undervalue and voidable preferences under sections 238 to 241 of the Insolvency Act 1986);
- Rahman v Sterling Credit Ltd [2001] (consumer credit);
- Hill v Spread Trustee Co Ltd [2006] (transactions defrauding creditors under section 423 of the Insolvency Act 1986)
The majority held that those cases were wrongly decided in their application of section 9.
The reasoning is the same, namely, where a statute confers a wide discretion as to remedy, the claim is not "an action to recover a sum recoverable by virtue of an enactment." Claims under sections 238 to 241 and section 423 of the Insolvency Act 1986 may therefore no longer be subject to the six-year limitation period that was previously thought to apply.
The position is not yet definitively settled, and courts will likely need to address it in future proceedings. If you are involved in insolvency or advising on a restructuring, this aspect of the judgment is particularly relevant to the time available to bring or defend such claims.
Could the Law Change Again?
The Supreme Court itself suggested that Parliament should consider legislative reform. The majority observed that the uncertainty created by sections 8 and 9 of the Limitation Act 1980 calls for a legislative solution.
Lord Burrows, in his dissent, noted that the Law Commission has already recommended a core limitation regime of three years from the date on which the claimant became aware of the claim, with a longstop period of ten years from the date of the breach. The Law Commission specifically recommended that petitions under sections 994 to 996 of the Companies Act 2006 should be subject to that regime.
If that recommendation is adopted, minority shareholders would have three years from the point at which they became aware of the unfairly prejudicial conduct to present a petition, subject to a ten-year longstop. That would represent a significant tightening of the current position. No timetable for legislation has been announced, but reform in this area is a realistic prospect. The current position, with no statutory limitation period, may not be permanent.
What Should Minority Shareholders Do Now?
The Supreme Court's decision is welcome news for minority shareholders, particularly those who may have been unaware of unfairly prejudicial conduct until well after the events in question. The removal of an automatic time bar restores flexibility and gives shareholders who discover historic misconduct a genuine opportunity to seek redress.
In our opinion, clients considering bringing a section 994 petition should take the following actions:
- Act promptly once you are aware of a problem. The absence of a statutory limitation period does not reduce the risk that delay will harm your prospects of obtaining relief. The longer you wait, the greater the chance that a court will exercise its discretion against you, particularly if the respondent can show prejudice from that delay.
- Preserve evidence. Shareholder disputes often turn on emails, board minutes, financial records, and company accounts. The older the conduct in question, the harder it is to obtain evidence, and the less reliable witness recollections will be.
- Take early legal advice. Understanding whether the conduct you are concerned about amounts to unfair prejudice, how strong your position is, and what relief a court might realistically award requires specialist legal assessment. Early advice can also help you evaluate whether litigation is the most proportionate route, or whether negotiation or mediation might achieve a better outcome.
- Do not assume the current position is permanent. If Law Commission reforms are enacted, a three-year limitation period running from discoverability could apply to future petitions. If you are aware of historic conduct that you have not yet acted upon, now is a sensible time to take stock of your position.
Seek Legal Advice
If you believe the affairs of your company are being conducted in a way that is unfairly prejudicial to your interests, or if you are aware of historic conduct that may give rise to a section 994 petition, this is not a situation to handle without specialist guidance.
Witan Solicitors' unfair prejudice claims solicitors advise minority shareholders on section 994 petitions, shareholder buyouts, and related company law disputes. If a wider shareholder dispute is affecting your business, our team can assess your position and advise on the most proportionate course of action. To discuss your situation, contact us on 0300 303 2071 or fill in our enquiry form.
FAQs
Is there now no time limit at all for unfair prejudice petitions?
There is no statutory time limit. The court retains discretion to refuse or reduce relief where there has been unjustified delay that has caused prejudice to the respondent. In practice, delay carries real risk even without a formal deadline.
What types of conduct can an unfair prejudice petition cover?
Common examples include exclusion from management despite agreed participation, improper share dilution, diversion of business opportunities to another entity, excessive remuneration paid to majority director-shareholders, and the withholding of dividends while the majority extracts value through other means.
Can the court order a buyout of my shares?
Yes. The most common remedy in unfair prejudice cases is an order requiring the majority to purchase the petitioner's shares at a fair value determined by the court or an independent expert. The court also has the power to order compensation, regulate the company's affairs, or grant other relief it considers appropriate.
Does the THG v Zedra decision affect insolvency claims?
The majority judgment disapproved of earlier authority that had applied a six-year limitation period to certain claims under the Insolvency Act 1986, including claims for transactions at an undervalue and defrauding creditors. The limitation position for those claims is now less certain and is likely to be tested in future proceedings.
Could Parliament introduce a time limit for these petitions?
The Supreme Court noted that legislative reform would be desirable. The Law Commission has recommended a three-year period from discoverability with a ten-year longstop. No timetable for legislation has been announced, but reform is a realistic prospect.
