On 25 February 2026 the Supreme Court gave its judgment in THG Plc v Zedra Trust Company (Jersey) Ltd[1]. This decision is important because it restores and affirms the long-held position that the Limitation Act 1980 (Limitation Act) does not apply to petitions under sections 994 and 996 of the Companies Act 2006 (Companies Act). Sections 994 and 994 allow a shareholder to seek redress if the affairs of a company have been conducted in a way which is unfairly prejudicial to their interests . The decision has been awaited by lawyers and shareholders for over a year.

In this article we discuss the context of this decision, the practical implications for minority and majority shareholders (and those who advise them) and suggest some areas in which further developments in the law are likely in future.

The position prior to the Supreme Court judgment

Shareholders who allege that they have suffered unfairly prejudicial conduct are able to petition the court for relief under section 994 of the Companies Act. That provision is the successor to section 459 of the Companies Act 1985.

Since 1985, parties have litigated, and the courts have determined petitions, on the basis that no statutory limitation period applies to such actions. That is not to say, of course, that timing has been irrelevant to whether a petition succeeds. Delay in pursuing a petition has always been a factor the courts can (and do) take into account in determining whether to grant relief (and, if so, in fashioning the relief).

On 23 February 2024 the Court of Appeal gave its judgment in the THG v Zedra litigation. This decision reversed the received wisdom that no statutory limitation applied to section 994 petitions. The court concluded that actions under section 994 are subject to a 12-year limitation period under section 8 of the Limitation Act, an action upon a specialty, unless (unusually) they are claims only for money, in which case they are subject to a six-year limitation period.

Relief of growing importance

Our experience is that allegations of unfair prejudice are on the rise and have been for several years. There are a number of likely reasons for this.

Startup and founder-led businesses have become more prevalent in recent years, and there is no doubt that liquidity events in these businesses are often triggers for allegations of unfair prejudice.

This is either because the conduct of the liquidity event (or leading up to the liquidity event) is said to be prejudicial, or because a liquidity event is the point at which it becomes clear that a company has some value so that a successful petition in respect of earlier prejudicial conduct is economically viable.

The last point, of course, often raises issues in relation to the timing of a petition, and the imposition of a statutory limitation period would be particularly relevant to these cases.

COVID-19 placed many businesses under real financial stress. At times of stress, it is common for majority shareholders to seek to protect their own positions however they can. Of course, the financial tide going out sometimes also reveals earlier problems.

Small shareholders are more than ever aware of, and able to research, their rights. The increasing use of AI to investigate possible legal remedies before approaching lawyers will be well-known to disputes practitioners. It is no bad thing.

However, because unfair prejudice petitions offer such flexible relief, this type of research may give small shareholders an unrealistic sense of the remedies they can obtain.

The availability of legal funding arrangements, including third-party funding. Minority shareholders either without liquid funds to pursue full-blown litigation, or who wish to de-risk themselves in relation to costs, are increasingly seeking funding to pursue petitions.

Funding unfair prejudice petitions can present challenges, because of the inherently discretionary nature of the relief, but the right case can be an attractive prospect for funders.

The potential reversal of the longstanding position by the Court of Appeal was therefore of significant importance to shareholders and their advisors. Zedra appealed to the Supreme Court soon after the Court of Appeal decision, and there has therefore been a period of some two years in which the settled position in relation to limitation periods has been unclear.

Key points from the Supreme Court decision

The Supreme Court reversed the Court of Appeal judgment, finding that:

• A section 994 petition is not “an action upon a specialty”[2], as it does not “create any substantive obligations”, but “enable[s] members to obtain such relief as the court sees fit”[3] where unfair prejudice exists. Petitions do not therefore fall within section 8 of the Limitation Act and are not subject to a 12-year limitation period.
• Nor is a petition for solely monetary relief subject to the six-year limitation period in section 9 of the Limitation Act 1980. The difficulty with such a limitation period applying is that the relief which can be granted by the court on a section 994 petition, even where only monetary relief is sought, is very wide-ranging and not necessarily restricted to what the Petitioner seeks. Such a petition is not therefore an action to recover a “sum recoverable by virtue of any enactment”[4].

No statutory limitation period therefore applies to section 994 petitions.

Practical implications

The absence of a limitation period does not mean that time is not a factor in unfair prejudice petitions. Indeed, the timing of when a petition is pursued has always been a key battleground in litigating these claims, with respondents arguing that a petitioner’s delay means that relief should be denied or significantly reduced even if unfair prejudice is found to exist.

A delay in pursuing a remedy is one factor the courts can take into account in determining what relief should be awarded, but it is not a clear determinative issue in the way a limitation period would be, and so a petition is unlikely to be struck out or summarily determined pre-trial on the basis of delay.

Delay is analogous to the equitable principle of laches[5], requiring not just that a petitioner has delayed in seeking relief, but also that they had delayed unreasonably, and that the delay would make it unjust to grant the relief sought.

This decision will be welcomed by minority shareholders, who now have confirmation that even historical acts of unfair prejudice can be remedied without concern about a bright line limitation date[6].

It might be assumed that confirmation that no statutory limitation period applies would be of benefit only to prospective petitioners. However, it is not of one-way benefit. Respondents may also benefit from the flexibility to argue that delay is a factor the court should take into account in determining what relief should be awarded, sooner than a statutory limitation period would have elapsed. This is particularly stark when considering a 12-year limitation period. Very few petitions would in practice be defeated by a limitation period of this length, but a more discretionary application of delay might impose a bar far earlier. Respondents would have lost this advantage had the Court of Appeal judgment been upheld.

On balance, then, this return to the established position as to limitation is likely to be welcomed both by minority and majority shareholders, as it allows all the circumstances of the alleged prejudice, and the context of the petition, to be taken into consideration by the court in fashioning the appropriate relief.

Of course, the flexibility of the court’s discretion in determining petitions on this basis can lead to difficulties for parties: the absence of bright lines can mean that more points are pursued to trial, potentially increasing the costs and commitment required to litigate them.

Future developments

There are two key developments arising from the Supreme Court’s decision which may take place in coming years.

First, the Court expressly disapproved of a number of cases relating to limitation periods under various sections of the Insolvency Act 1986. Future cases relating to these provisions will need to address the issues arising from this disapproval.

Second, as the Supreme Court noted, the Law Commission recommended in its 2001 report Limitation of Actions that unfair prejudice claims should be subject to a limitation period of three years from the date the petitioner knew or ought reasonably to have known about the incident giving rise to the prejudice. As the Supreme Court said: “Whether there should be such a limitation period is a question of policy for Parliament; it is not for the courts to determine.”

Conclusion

The Supreme Court decision has restored the common understanding that the Limitation Act does not apply to petitions under section 994 of the Companies Act.

This position means that the courts have full flexibility in ordering appropriate relief to remedy unfairly prejudicial conduct. This flexibility is likely to be welcome both to petitioners and respondents.

Unfair prejudice petitions are an increasingly common tool for minority shareholders who feel that they have been wronged by the majority. This decision allows those minority shareholders to seek to vindicate their rights even in relation to historical wrongs. However, minority shareholders should not delay in asserting their rights once identified. Delay is often a key factor in the court determining what relief is appropriate.

This article was originally posted on Law 360 website.

[1] [2026] UKSC 6 https://supremecourt.uk/uploads/uksc_2024_0047_judgment_5ab10b6bdc.pdf

[2] Section 8 Limitation Act 1980

[3] Supreme Court judgment paragraph 116

[4] Section 9 Limitation Act 1980

[5] A defence asserting that a claimant is not entitled to claim equitable relief on the basis that it has delayed in asserting its rights, rendering the relief sought unfair.

[6] i.e. a strict cut-off point after which a claim will be time-barred by statute.