No limitation period for unfair prejudice petitions: Supreme Court settles the law

Limitation is often a central, and sometimes decisive, issue in corporate disputes. Following the Supreme Court’s decision in THG plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, statutory limitation periods do not apply to unfair prejudice petitions. By a 4-1 majority, the Supreme Court held that no statutory limitation period under the Limitation Act 1980 applies to petitions brought under Section 994 Companies Act 2006 (CA 2006, Section 994 Petition). Section 994 Petitions are neither an “action upon a specialty” (governed by section 8 Limitation Act 1980 (Section 8)) nor an “action to recover any sum recoverable by virtue of any enactment” (governed by section 9 Limitation Act 1980 (‘Section 9’)).

That does not give shareholders a free hand to litigate ancient grievances. The Supreme Court confirmed that the proper control on delay lies in the court's statutory discretion under sections 994-996 CA 2006: unjustified delay may lead to the court refusing or tailoring the relief it grants, but it will not automatically bar the petition at the outset. The key focus for petitioners and respondents should be on broader questions of conduct over time rather than technical time limits.

One Justice, Lord Burrows, dissented. He would have held that a Section 994 Petition is subject to the Limitation Act 1980, carrying a 12-year limitation period in general and a six-year period where monetary relief is sought. As a dissenting minority, his view does not represent the law, but it underlines the underlying legal and policy debate.

Key takeaways:

• No Limitation Act time bar for unfair prejudice petitions: A Section 994 Petition is neither an "action upon a specialty" (Section 8) nor an "action to recover any sum recoverable by virtue of any enactment" (Section 9). There is therefore no applicable statutory limitation period.
• Delay is dealt with through the court's statutory discretion, not limitation periods: Courts can refuse or tailor relief on account of unjustified delay, but that is an exercise of the court's discretion under sections 994-996 CA 2006, not an automatic time bar.
• Historic conduct is now confirmed to be in play: The decision restores over 40 years of ‘received wisdom’ that no statutory limitation period applies to unfair prejudice petitions. Companies and majority shareholders may face challenges to conduct long after the expiry of the six-year and twelve-year periods that would apply to contract or tort claims.
• Minority shareholders gain flexibility but must still act sensibly: Petitioners may base claims on conduct outside the usual limitation windows. However, if they sit on their rights with knowledge of unfair prejudice, that may lead to no, or reduced, relief.

Background

Zedra Trust Company (Jersey) Ltd, a minority shareholder in THG plc, then called The Hut Group Ltd, presented a Section 994 Petition in January 2019, alleging that a number of THG’s directors had conducted the company's affairs in a manner unfairly prejudicial to Zedra's interests. 

The limitation issue centred on Zedra’s proposed amendment to its Section 994 Petition concerning a bonus issue of shares in July 2016. THG had capitalised sums from distributable reserves and allotted fully paid bonus shares to four shareholders, in proportions fixed by the directors and approved by a designated shareholder majority under the articles. Zedra received nothing.

Zedra alleged that by excluding it from the bonus issue, the directors had breached their duties to act lawfully, in good faith, for proper purposes and fairly as between shareholders. Zedra said that, had the directors performed those duties, it would have received its pro rata allocation of the bonus shares, would have converted them immediately before THG's IPO in September 2020 and would have sold them at £5 per share. Its alleged loss was in the range of approximately £1.8 to £2 million. Zedra sought an order for equitable compensation under Section 996 CA 2006 (the July 2016 Complaint).

Because more than six years had passed since the bonus issue, THG argued that the July 2016 Complaint was time-barred by Section 9 and that, under section 35 of the Limitation Act 1980 and CPR 17.4, the amendment introduced a new claim outside the six-year period that did not arise from substantially the same facts.

Earlier Courts’ Decisions

In the High Court[2023] EWHC 65 (Ch), Fancourt J rejected THG’s limitation argument, holding that, as recognised in earlier caselaw, no statutory limitation period applies to Section 994 Petitions. Unfairly prejudicial conduct is not a cause of action in the conventional sense but a complaint, the remedy for which is at the court's discretion. If delay made it inequitable to grant relief, that could be dealt with at trial. 

The Court of Appeal [2024] EWCA Civ 158 (Lewison LJ, with whom Arnold LJ agreed and Snowden LJ concurring separately) upheld THG's appeal. This decision came despite acknowledging over 40 years of ‘received wisdom’ that no limitation period applied to Section 994 Petitions. 

The court held that (i) a Section 994 Petition is an ‘action upon a specialty,’ because the right to Petition exists solely by virtue of statute, so Section 8 of the Limitation Act 1980 (Section 8) applies with its 12-year limitation period and that (ii) where the only relief sought is monetary, the claim falls within Section 9 with a six-year limitation period. Applying a ‘look and see’ test, the Court of Appeal concluded that Zedra's July 2016 Complaint, framed purely as a claim for compensation, was time-barred. 

In a short concurring judgment, Snowden LJ raised a concern that recognising a statutory limitation period might, counterintuitively, make it harder to strike out stale Petitions where the Petition was presented within time, potentially undermining the long-standing policy of discouraging petitioners from dragging up old grievances. 

Zedra appealed to the Supreme Court.

The Supreme Court’s decision

The principal judgment was given jointly by Lord Hodge and Lord Richards, with Lord Lloyd-Jones and Lord Briggs agreeing. Lord Burrows dissented. 

Issue 1: Is a Section 994 Petition an ‘action upon a specialty?’

The majority reviewed the legislative history of sections 8 and 9 of the Limitation Act 1980 and their statutory predecessors, together with caselaw going back to the 19th century and from Commonwealth jurisdictions. They concluded that an ‘action upon a specialty,’ when applied to a statute, had historically always meant an action to enforce an obligation created by a deed or statute, not simply any claim that could only be brought under a statutory provision. 

This was significant because of the decision in Collin v Duke of Westminster [1985] QB 581, from which two propositions had been drawn. The wider proposition, that Section 8 applies to any claim which can only be brought under a statute, was unanimously rejected by the majority. A narrower proposition also arose from Collin: that Section 8 extends beyond monetary obligations to cover non-monetary obligations created by statute (such as the right to enfranchise a lease, which was the issue in Collin itself). 

On this narrower point, the majority disagreed among themselves. Lord Hodge and Lord Richards considered that ‘specialty’ actions relating to statutes were historically confined to monetary obligations and that Collin was wrongly decided on this point too. Lord Lloyd-Jones and Lord Briggs disagreed, considering that the Limitation Act 1939 did extend the concept to include non-monetary statutory obligations. 

This difference did not affect the outcome, because sections 994-996 CA 2006 do not themselves create any substantive obligations, whether monetary or non-monetary. They provide a mechanism for the court to grant relief where there is unfair prejudice, but the underlying obligations (for example, directors' duties or rights under the articles) arise from elsewhere. Sometimes there is no enforceable obligation at all, but a prejudicial state of affairs. On either view of Collin, therefore, a Section 994 Petition is not an action to enforce an obligation created by statute and is not an action upon a specialty.

Conclusion on Issue 1: A Section 994 Petition is not an ‘action upon a specialty.’ The 12-year limitation period in Section 8 does not apply. 

Issue 2: Does Section 9 apply where monetary relief is sought?

Section 9(1) imposes a six-year limitation period for an action for "any sum recoverable by virtue of any enactment.” The majority accepted that Section 9 is capable of covering claims going beyond ascertained statutory debts, including unascertained sums and monetary claims subject to judicial discretion, as earlier cases had held. But there is a clear distinction between those claims and unfair prejudice petitions, which are not claims to enforce a statutory obligation at all. Instead, a Section 994 Petition asks the court to decide what remedy, if any, is appropriate under section 996 CA 2006, which confers very wide discretion. 

The court rejected the ‘look and see’ approach used in some earlier cases and adopted by the Court of Appeal, under which the court would examine whether the petitioner was really seeking money and, if so, apply Section 9. That approach makes limitation depend on the remedy claimed rather than the nature of the claim, has no foundation in the wording of Section 9 and produces arbitrary and unworkable results in the unfair prejudice context where the court is free to choose a different remedy, including a non-monetary one. 

Conclusion on Issue 2: A Section 994 Petition is not an action "to recover a sum recoverable by virtue of an enactment." The six-year limitation period in Section 9 does not apply, even where monetary relief is sought. 

Issue 3: Section 36 and equitable relief

Zedra's fallback argument was that its claim should be treated as a claim for equitable relief under section 36 Limitation Act 1980, disapplying any time bar. Given that the Supreme Court had already determined that neither Section 8 nor Section 9 applies, the majority dealt with this briefly. 

The Supreme Court held that Zedra was claiming relief from unfairly prejudicial conduct under a statutory regime, not equitable relief in the traditional sense, and so section 36 could not assist. As a shareholder, it had no separate equitable cause of action against the directors. In any event, because Sections 8 and 9 did not apply, Zedra did not need to rely on this point.

Dissent

Lord Burrows dissented. He considered that a Section 994 Petition is an action on a statutory cause of action and should therefore be treated as an "action upon a specialty" under Section 8, carrying a 12-year limitation period. Where the petitioner seeks monetary relief, he would have applied Section 9, with its six-year limitation period, using the established "look and see" approach. On that analysis, Zedra's July 2016 Complaint would have been time-barred and the Court of Appeal's decision upheld. Lord Burrows emphasised the importance of clear limitation periods to control stale claims, arguing that a combination of fixed time limits and a further discretion to refuse relief on account of delay strikes a better balance than leaving Section 994 Petitions entirely outside the Limitation Act. 

While his dissenting view is not the law, it highlights the complex underlying arguments at issue.

Conclusion

The absence of a statutory limitation period does not leave respondents without protection. The majority made clear that the court's broad statutory discretion under sections 994-996 CA 2006 is itself the safeguard: where a petitioner has delayed without justification, the court may refuse to grant a particular remedy, or any remedy at all. This is analogous to the equitable doctrines of laches and acquiescence, but it derives from the court’s statutory discretion. 

The majority was also careful to note that it was not the court's role to fill what some might see as a gap in the law. Whether a specific limitation period should apply to Section 994 Petitions is a question of policy for Parliament. In 2001 the Law Commission recommended a three-year period running from the date the petitioner knew, or ought to have known, of the unfairly prejudicial conduct, but that recommendation has not yet been implemented. The Supreme Court observed that there may be a case for addressing the difficulties to which Sections 8 and 9 have given rise “by using clearer language to define their scope,” a signal that legislative reform in this area remains a possibility.

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