The Supreme Court has provided clarity as to whether petitions brought by members for unfair prejudice are subject to statutory limitation periods – resolving a point that had unsettled the corporate legal world since the Court of Appeal judgment two years ago.

Contributors: Abigail Nicholls-May and Fleur Turrington


The Supreme Court has now confirmed that no statutory limitation period applies – overturning the Court of Appeal’s 2024 decision, and restoring more than four decades of established understanding. The ruling carries important commercial implications – particularly for organisations:

  • Shareholders are not barred from bringing a claim under Section 994 of the Companies Act 2006 just because an issue is more than six or 12 years old.
    Without a statutory limitation period, conduct that occurred many years earlier may still be capable of challenge, provided the petitioner can establish that it forms part of unfairly prejudicial conduct. This is especially true in cases where unfair conduct has only recently been discovered, or where disputes have developed over a long period.

  • However, delay still matters. Even without a statutory time limit, the court retains a discretion to refuse relief if a member has waited too long, and that delay unfairly prejudices the respondent.

Unfair prejudice petitions

Petitions under Sections 994 and 996 of the Companies Act 2006 give minority shareholders a flexible way to challenge conduct that is unfairly prejudicial to their interests – and to seek court intervention when internal company remedies are inadequate. They also empower the court to grant wide-ranging, tailored relief – such as ordering a share purchase or regulating future company affairs – to provide practical solutions to shareholder disputes.

Before the Court of Appeal’s decision in Zedra Trust Company (Jersey) Ltd versus THG Plc in February 2024, it was widely understood that the usual six‑ or 12‑year limitation periods under the Limitation Act 1980 did not apply to unfair‑prejudice petitions. However, in 2024, the Court of Appeal went against the stream of 40 years of ‘wisdom’ within the legal sector and held that a complaint dating back to July 2016 was time-barred because of the limitation period of six years under Section 9 of the Limitation Act 1980.

Section 9 of the Limitation Act 1980 provides that any claim to recover a sum of money that is due under a specific statute must be brought within six years from the date the right to recover that sum first arose; once that six‑year period has elapsed, the claim will normally be time‑barred.

Received wisdom

The dispute concerned Zedra Trust Company (Jersey) Ltd (Zedra), a minority shareholder in THG Plc (THG).

In July 2016, THG distributed bonuses to four shareholders as approved by the designated shareholder majority in accordance with the company’s articles. Zedra was left out of this allocation.

In January 2019, Zedra presented a Section 994 petition alleging unfair prejudice in the handling of the affairs of THG (but which omitted any petition in relation to the 2016 bonus allocation).

In 2022 (more than six years after the bonus was distributed), Zedra sought to amend their petition to include allegations relating to the 2016 bonus allocation and equitable compensation for their alleged loss. They argued that their exclusion from the bonus meant that the directors of THG had breached their duties and caused unfair prejudice towards Zedra, resulting in financial loss. THG argued that, because the amended petition sought only monetary compensation, it was time‑barred under the Limitation Act 1980 – specifically Section 9 (six‑year period for sums recoverable by statute).

In the first instance, as the High Court found no limitation period applied, the claim was not time-barred.

The Court of Appeal held that, whilst it was ‘undoubtedly received wisdom that no limitation period applies to Section 994 petitions’, a petition seeking such relief is subject to a 12‑year limitation period if the claim is ‘actions on a specialty’ (in other words, not about money), and is also subject to a shorter six‑year period on the ‘rare’ occasion a shareholder pursued monetary compensation. It held that as the remedy sought by Zedra was monetary, the claim was time-barred due to falling under Section 9.

The Court of Appeal supported the wider policy of discouraging petitioners from bringing old grievances to the courts.

Zedra appealed, arguing that the petitions did not fall within the wording of Section 9 of the Limitation Act 1980 – and that case law had settled the understanding that there was no limitation period for petitions under Section 994.

Supreme Court

In its judgment, the Supreme Court rejected the Court of Appeal’s reasoning; it held that a Section 994 petition does not enforce any statutory obligation capable of amounting to ‘an action upon a specialty’ – rather, it merely empowers the court to grant whatever relief it considers fair. On that basis, the Supreme Court rejected the Court of Appeal’s view that such petitions fall within a 12‑year limitation period.

The Supreme Court also rejected the idea that unfair prejudice petitions become subject to the six‑year period under Section 9 simply because money is requested by the petitioner. This is because any payment order made in a Section 994 case arises only from the court’s discretion – not from any statutory right to recover a sum of money. Trying to apply different limitation periods depending on whether compensation is sought would be arbitrary, unworkable, and contrary to how Section 994 operates. The Supreme Court then rejected all remaining arguments put forward that there should be a statutory time limit for unfair prejudice petitions.

Impact

The result is that Section 994 petitions are not governed by a fixed statutory time limit at all. Instead, the court continues to control unreasonable delay in bringing a complaint through equitable principles – meaning that very old or stale complaints can still be refused where it would be unfair to allow them to proceed.

The ruling confirms that minority shareholders have protection, as companies cannot rely on technical time limits to shut out Section 994 claims. While historic conduct may still be raised in a petition, it is still important for petitioners to act promptly. Courts dislike stale grievances, and may limit or refuse remedies if a petition is delayed without good reason.

The decision highlights the importance of good governance and long-term record keeping – especially in any commercial structure where partners, suppliers, or investors hold minority share positions. This includes records of board minutes, explanations for capital decisions, financial justifications, and shareholder communications. Decisions around share issues, director appointments, or distribution of value – sometimes made over a decade earlier – remain exposed to challenge if a relationship deteriorates.

The judgment is available in full here.

It perhaps needs to be clarified that Zerda sought to make the amendment in 2022 to exemplify that the issue dated back six years at the time it was raised  (as it could currently be misinterpreted as implying that this took place in 2019,  which is three years on from the 2016 matter referred to).