No Statutory Time Limit for Unfair Prejudice Petitions

In THG Plc (Respondent) v Zedra Trust Company (Jersey) Ltd (Appellant) [2026] UKSC 6, the Supreme Court has settled one of the most practically significant questions in shareholder disputes: is there a statutory limitation period for unfair prejudice petitions under s.994 – s.996 of the Companies Act 2006 (“CA 2006”), such that they must be brought within six or 12 years of the alleged unfair prejudice? By a majority of four to one, the Supreme Court decided that there is no such limitation.

In this update, we address the decision before considering the practical implications that follow.

Summary

Zedra Trust Company (Jersey) Ltd is a minority shareholder in THG plc (formerly The Hut Group Ltd), having acquired shares in 2011. In 2019, Zedra presented an unfair prejudice petition under s.994 CA 2006 against the company and its current and former directors. 

After issuing the petition, Zedra sought to amend the petition including so as to make an additional complaint about an allotment of bonus shares in 2016, alleging that it had been unlawfully excluded from this. Zedra’s loss in this respect was estimated to be approximately £1.9 million, representing the proceeds it argued it would have received had it participated in the allotment and sold the resulting shares on THG’s IPO in 2020. 

The critical issue here was that the amendment made a new claim more than six years after the alleged unfair prejudice of which it complained, and that new claim did not arise out of substantially the same facts as what had already been alleged in the petition. Under the Limitation Act 1980 (“LA 1980”) and pursuant to the Civil Procedure Rules, new claims introduced by amendment must generally be brought within the relevant limitation period and cannot relate back to the original claim if they do not arise out of substantially the same facts. The respondents therefore opposed the amendment on the grounds that there was an arguable limitation defence.

The amendment was allowed at first instance, with the High Court finding that the LA 1980 has no limitation period for unfair prejudice petitions. However, the Court of Appeal disagreed, finding that a six-year limitation period applied where the petition sought a monetary remedy, as in this case. The Supreme Court has now reversed that decision, reinstating the position at first instance, which is that no limitation period applies to unfair prejudice petitions such that historical matters can, in principle, form the basis of a petition.

The Supreme Court’s decision

The majority of the Supreme Court concluded that neither s.8 (providing a 12-year limitation period for actions “upon a specialty”) nor s.9 (providing a six-year limitation period for actions to recover a sum “recoverable by virtue of any enactment”) of LA 1980 apply to unfair prejudice petitions.

Implications for companies, their directors and shareholders

If you are a shareholder considering an unfair prejudice petition under s.994 CA 2006, the Supreme Court’s confirmation that there is no statutory time restriction to presenting a petition is a significant and welcome development. As such, complaints about historical unfairly prejudicial conduct will not be automatically barred by statute.

However, and importantly, this is not a licence to delay. The judgment makes clear that it is generally in the public interest that stale claims are not allowed to proceed and that there should be finality in litigation. Connected to that, the court retains a broad discretion as to the appropriate relief for unfair prejudice petitions, and unjustified delay which has an adverse effect on a respondent to a petition remains a factor against granting relief. As this case itself illustrates, raising complaints belatedly (including through late amendments) carries risk. This is for practical reasons, too, as it can often be more difficult to obtain documentary and witness evidence with the passage of time. 

On the other hand, directors or majority shareholders in respect of whom petitions are issued or threatened can no longer rely on the passage of time as a hard defence. As noted above, historical conduct remains capable of forming the basis of a petition. The decision heightens the importance of maintaining good records of company decisions and documenting the rationale for each at the time they are made. Where allegations are made years after the event, contemporaneous minutes and records can be critical to defending a petition.

That said, as above, the court retains a broad discretion, and delay that causes prejudice to the respondent will remain an argument against relief. The doctrine of acquiescence is also available — i.e., that the petitioner has represented that it has waived the respondent’s infringement of its rights (usually implied by conduct), such that it should be prevented from bringing an action in respect of them. Respondents facing historical allegations should consider whether the petitioner’s conduct amounts to delay or acquiescence, and they should document carefully the prejudice caused by delay in the petitioner’s claim.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee similar outcomes.