In this article, Kirsty White discusses the Supreme Court’s decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6, confirming that unfair prejudice petitions under section 994 of the Companies Act 2006 are not subject to statutory limitation periods, and examines the wider implications for claims under the Insolvency Act 1986.
- The Supreme Court, by a majority of 4:1, has restored “the 40 years’ received wisdom” that unfair prejudice petitions under section 994 of the Companies Act 2006 (“CA 2006”) are not subject to statutory limitation periods under the Limitation Act 1980 (“1980 Act”).
Background
- Zedra brought an unfair prejudice petition in 2019 under section 994 of the CA 2006 against THG Plc (The Hut Group). In 2022 Zedra sought permission to amend its petition to include allegations relating to its exclusion from a bonus issue of shares which took place more than six years earlier and sought compensation to redress its loss. THG opposed the amendment, arguing that the claim for compensation was time-barred under section 9 of the 1980 Act.
- The High Court held that the claim was not time-barred as no limitation period applied [2023] EWHC 65 (Ch). In doing so Fancourt J relied on the decision in Cherry Hill Skip Hire Ltd [2022] EWCA Civ 531.
- In March 2024 the Court of Appeal overturned the High Court and determined that an unfair prejudice petition is subject to a 12-year limitation period pursuant to section 8 of the 1980 Act as it was “an action upon a speciality”. Further where the only relief sought was a payment of money, whether a liquidated or unliquidated sum, the Court of Appeal held that the claim would be subject to a six-year limitation period pursuant to section 9 of the 1980 Act. As the only remedy Zedra was seeking was monetary compensation, its claim was time-barred pursuant to section 9 of the 1980 Act ([2024] EWCA Civ 158).
- Zedra appealed to the Supreme Court, arguing that no statutory limitation period applied to an unfair prejudice petition.
The Supreme Court’s judgment
- Three principal issues were raised on appeal:
(1) Is a claim under section 994 of the CA 2006 an “action upon a speciality” falling within section 8(1) of the 1980 Act to which a 12-year limitation period is applicable unless section under 8(2) a short period applies?
(2) If the claim under section 994 of the CA 2006 in which the only relief sought is the payment of money “an action to recover any sum recoverable by virtue of any enactment” falling under section 9(1) of the 1980 Act to which the six-year limitation period is applicable?
(3) Is the monetary relief claimed in the petition “equitable relief” within the meaning of section 36(1) of the 1980 Act and are the limitation periods in section 8 or 9 of the 1980 Act therefore disapplied if otherwise applicable? [25]
- Giving the majority judgment, Lord Hodge and Lord Richards (with whom Lord Lloyd-Jones and Lord Briggs agreed) examined (1) the historical development of “specialty”, (2) the historical development of limitation, (3) the approach of other jurisdictions in respect of limitation in unfair prejudice actions and (4) the statutory language of sections 994 and 996 of the CA 2006.
- Answering the first question the Supreme Court held that a section 994 petition is not an action under speciality and therefore not subject to section 8 of the 1980 Act, as “an action under speciality is an action to enforce an obligation created by a deed or statute” [115], and “sections 994 – 996 of the CA 2006 do not create any substantive obligations” [116]. Further in unfair prejudice petitions “if breaches by directors or members of the articles of association or shareholders’ agreement give rise to unfair prejudice to members, the obligations are created not by statute but by the articles or agreements” or alternatively relief is sought “where a state of affairs exists as regards a company that results in or constitutes unfair prejudice to one or more members” [116].
- As to the second question the Supreme Court held “a claim under section 994… is not a claim to enforce a liquidated or unliquidated obligation arising under statute but is a claim that the court should make such order as it thinks fit giving relief in respect of the matters complained of. The court has the widest possible discretion as to the orders it may make…” [137]. Further confirming at [145] “there is no entitlement to any particular form of relief” and the payment of any sum “by way of compensation or otherwise… is not a sum “recoverable by virtue” of sections 994-996”. Section 9 of the 1980 Act therefore does not apply to unfair prejudice petitions.
- Given the conclusions in respect of the first two questions, the third question was not explored in detail. However, it was noted at [170] that “the court addressing an application under section 994 of the CA 2006 may take account of unjustified delay by the claimant which has an adverse effect on a respondent or other persons when exercising its discretion to grant or refuse a particular remedy or any remedy”. Equitable principles, such as the doctrine of laches, are therefore relevant to the exercise of the court’s discretion and will be considered when determining the appropriate remedy, if any.
- It should be noted that Lord Burrows dissented, upholding the Court of Appeal. He stated in his judgment an unfair prejudice petition was an action under speciality within section 8 of the 1980 Act, and that further if the only relief sought was a monetary one that section 9 of the 1980 Act applied.
Wider considerations
- Whilst useful for confirming the position in respect of unfair prejudice petitions, this judgment has a wider impact on claims under sections 238, 239, 339, 340 and 423 of the Insolvency Act 1986. The effect of this judgment is that where the court has a discretion as to what relief is appropriate section 9 of the 1980 Act is of no effect and therefore such claims are not subject to a six-year limitation period. A number of decisions decided under the aforementioned sections of the Insolvency Act 1986 are criticised throughout the judgment, and it is indicated that many of those cases have been wrongly decided. The application of this judgment to such cases will be an interesting development in Insolvency law.
Conclusion
- The decision restores the previously understood position that unfair prejudice petitions under section 994 of the CA 2006 are not subject to statutory limitation periods, whilst also providing useful guidance on the meaning and scope of sections 8 and 9 of the 1980 Act.
- Consideration of this judgment, and the application of sections 8 and 9 of the 1980 Act should be given in claims under section 238–240 and 423 of the Insolvency Act 1986.
This article reflects the law as of the date it was published. Whilst every effort has been taken to ensure that the law in this article is correct, it is intended to give a general overview of the law for educational and/or informational purposes. It is not intended to be a substitute for specific legal advice and should not be relied upon for this purpose. This article represents the opinion of the author and does not necessarily reflect the view of any other member of St Philips Chambers.
