The decision inTHG Plc v Zedra Trust Company (Jersey) Ltd [2024] EWCA Civ 158 has brought long-awaited clarity to one of the most debated issues in UK company law: whether unfair prejudice petitions are subject to statutory limitation periods.
For shareholders, directors and companies alike, the ruling has significant strategic implications, particularly in disputes involving historic conduct.
Background: What was the issue?
Unfair prejudice petitions under section 994 of the Companies Act 2006 are a key remedy available to shareholders who have been treated unfairly.
Historically, it was widely accepted that no statutory limitation period applied. However, uncertainty arose following a controversial Court of Appeal decision in 2024, which suggested that limitation periods under the Limitation Act 1980 could apply, either:
- 6 years (for monetary claims), or
- 12 years (for “actions upon a specialty”).
This created real concern for both claimants and respondents in shareholder disputes.
The Supreme Court’s decision
In February 2026, the Supreme Court decisively resolved the issue, confirming that there is no statutory limitation period for unfair prejudice petitions under section 994.
The Court held that:
- Section 994 petitions are not “actions upon a specialty”
- Nor are they claims to recover a statutory sum
- Therefore, neither section 8 nor section 9 of the Limitation Act 1980 applies
The Court of Appeal’s decision was overturned, restoring the long-standing understanding of the law.
The Supreme Court emphasised the unique nature of unfair prejudice claims:
- They are equitable and discretionary, not strictly legal claims
- The court has wide flexibility in determining remedies
- Relief is not automatic and it depends on what is “just and equitable”
Because of this, the Court concluded that applying rigid statutory limitation periods would be inconsistent with the nature of the remedy.
Does this mean claims can be brought at any time?
In principle, yes, but with an important caveat.
While there is no statutory time bar, delay still matters:
- Courts may refuse relief where there has been an unjustified delay
- The concept of laches / equitable delay remains relevant
- Evidence may become weaker over time
- Historic conduct may be harder to challenge effectively
In other words, no limitation period does not mean no consequences for delay.
Practical implications for shareholders and companies
1. Historic conduct is now firmly in scope
Shareholders may rely on events that occurred many years ago, particularly in long-running quasi-partnership disputes.
2. Increased litigation risk for companies
Companies and majority shareholders may face claims based on decisions previously assumed to be “time-barred”.
3. Greater importance of records and governance
Poor documentation or informal arrangements (common in founder-led businesses) can now be scrutinised long after the event.
4. Strategic considerations for both sides
- Claimants: timing still affects credibility and relief
- Respondents: delay can be a defence factor, even if not a strict bar
From a disputes perspective, this decision reinforces a key reality that unfair prejudice is not a technical claim but a discretionary remedy grounded in fairness.
That has always made it a powerful tool. The Supreme Court has now confirmed that its flexibility extends to timing as well.
How we can help
At IMD Corporate, we regularly advise shareholders, directors and companies on complex disputes, including unfair prejudice petitions.
We can assist with:
- Assessing whether conduct amounts to unfair prejudice
- Strategic advice on timing, delay and evidential risks
- Pre-action negotiations and settlement strategy
- Issuing or defending section 994 petitions
- Cross-border shareholder disputes
If you are dealing with a shareholder dispute, particularly one involving historical issues, it is crucial to seek early, strategic advice.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
