Shareholder case law update: No statutory limitation period for bringing unfair prejudice petitions
24th March, 2026
In its recent decision THG plc v Zedra Trust Co (Jersey) Ltd [2026] UKSC 6, the Supreme Court held by a majority of 4-1 that unfair prejudice petitions are not subject to limitation periods under the Limitation Act 1980. A petitioner can therefore claim in relation to issues which occurred beyond the normal 6 or 12 years ago.
Background
Zedra was a minority shareholder in THG. A petition was issued by Zedra on the basis that THG’s decisions regarding the operation of the company were unfairly prejudicing Zedra’s interests. In 2022, Zedra applied to amend its claim to include allegations that a bonus share distribution made more than 6 years earlier, to some shareholders but not others including Zedra, was unfairly prejudicial. Zedra sought compensation to redress its loss. A dispute arose over whether Zedra’s claim was time barred under the Limitation Act.
What is an unfair prejudice action?
An unfair prejudice petition is a remedy available under section 994 of the Companies Act 2006, where a minority shareholder considers that the company’s affairs are being conducted in a manner which is unfairly prejudicial to their interests. This can include issues around the payment of dividends to certain shareholders and not others, inequitable conduct, or improper decisions to dilute the value of certain share classes. In Zedra, the issue related to a bonus share issued to some shareholders only.
The action complained of must be both prejudicial to the minority shareholder’s interests and unfair.
The court has broad discretion to make a range of orders to remedy the unfair prejudice as it sees fit. This includes making orders as to the future conduct of the company business or changes to constitutional documents, although often the result is that provisions are made for the minority shareholder to be bought out of the company.
How does it link in to the Limitation Act 1980?
The Limitation Act 1980 imposes a statutory bar on bringing court proceedings after a certain period of time. The relevant provisions in this case were:
- Section 8, which imposes a 12-year limitation period on bringing claims under a “speciality”, which is generally considered as being claims in relation to contracts made by deed or under seal
- Section 9, which imposes a 6-year limitation period on bringing claims for sums that are recoverable under statute.
THG argued that Zedra’s claim was time barred under both of those sections.
Decision
The Supreme Court decided that Zedra’s amendment to include losses arising from over 6 and 12 years ago was not time barred. The Supreme Court clarified that an unfair prejudice petition is not an action under a speciality, nor is it an action solely to recover sums recoverable under statute.
It is a claim in which the court can make any order as it thinks fit, to give relief from the unfair prejudice complained of. Therefore, no statutory limitation period applies where the court has such wide discretion.
What impact does it have in practice?
This decision underlines the court’s flexible discretion in remedying claims for unfair prejudice. Judges can order bespoke remedies, and the imposition of fixed limitation periods based upon certain types of relief would undermine that wide discretion.
Petitioners can therefore rely on historic conduct, even from many years earlier, when bringing unfair prejudice petitions. There is scope to bring claims which involve events such as bonus share issues, dilution and exclusion from management, even if those events took place over 12 years ago. This is a considerable benefit to many minority shareholders who often do not discover the prejudicial conduct until sometime later, not least because they don’t always have full access to company information.
For companies and majority shareholders who can no longer rely on limitation defences, they will need to be able to justify historic decisions often several years later, and therefore good governance and record-keeping becomes even more important.
Issues of delay will still be considered, but on an equitable basis and in line with the court’s discretion when granting relief. Undue delay should still be avoided, and the court is likely to limit remedies if a petitioner waits an unreasonably long time before bringing a claim.
At Ward Hadaway, we have a team of experts specialising in company disputes. Please get in touch with the authors to discuss any issues involving shareholder disputes.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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