The final word on limitation periods and unfair prejudice petitions: the Supreme Court judgment in Thg Plc v Zedra Trust Company (Jersey) Limited [2026] UKSC

No limitation periods apply to unfair prejudice petitions

1. The issue on appeal in Zedra was, and has always been, a narrow one. Does a limitation period apply to a petition under section 994 of the Companies Act 2006?

Before the Supreme Court judgment

2. As set out in our previous update on the issue (dated 9 September 2024), the Court of Appeal in Zedra overturned 40 years’ of received wisdom and found that unfair prejudice petitions were indeed subject to statutory limitation periods under the Limitation Act 1980 (“the 1980 Act”).
3. Specifically, the Court of Appeal found that an unfair prejudice petition is subject to the limitation period laid down in section 8 of the 1980 Act, which is a twelve-year period from the date on which the cause of action arose [72].
4. Where the only relief sought is an order for the payment of money (whether liquidated or unliquidated), it was confirmed that a claim would be subject to a 6-year limitation period pursuant to section 9 of the 1980 Act [129].
5. Helpfully, the Court of Appeal suggested that petitions which sought a buy-out of the majority’s shareholding (the remedy most commonly sought) were unlikely to be considered claims for the recovery of money. The 12-year period was likely to apply instead.

After the Supreme Court judgment

6. Zedra appealed to the Supreme Court. The hearing of the appeal took place on 17 and 18 February 2025. The Supreme Court has delivered judgment after just over 12 months later.
7. Lord Hodge and Lord Richards gave judgment (with which Lord Lloyd-Jones and Lord Briggs agreed). They found that the correct approach to the the answer to the dispute lay in the interpretation of sections 8 and 9 of the 1980 Act.
8. They held at [115-118] that it is of the essence of an action upon a specialty that it is an action to enforce an obligation created by a deed or statute. However, sections 994–996 exist to provide relief in respect of a state of affairs. They neither contain nor enforce obligations. They were therefore satisfied the Court of Appeal was wrong to hold that section 8 of the 1980 Act applied to petitions under sections 994–996.
9. Turning to section 9 of the Act and the question of whether that applied to unfair prejudice petitions, the court reasoned section 9 of the 1980 Act does not apply to a petition under section 994, even if it does include a request for monetary relief. The Court considered that claims under statutory provisions which confer a wide discretion as to remedy are not claims to which section 9 applies [155].
10. Overall, it was concluded that in disagreement with the Court of Appeal, neither section 8 nor section 9 of the 1980 Act creates a limitation period which is applicable to applications under sections 994 and 996 of the CA 2006 [158].
11. It is worthwhile noting that Lord Burrows gave a dissenting judgment. He opened by observing that limitation periods are a statutory creation unknown to the common law. They serve important purposes. In particular, they protect defendants from stale claims. That includes protecting a defendant against a deterioration of helpful evidence [180].
12. His dissenting view was that the construction of specialty in Lord Hodge and Lord Richard’s judgment as too narrow. In particular, he could not accept that section 994 does not create an action on a specialty because it does not create an obligation.
13. Lord Burrows stressed that it would fly in the face of a large body of law if one were to accept that a limitation period cannot be sensibly applied to a statutory cause of action where the statute confers a discretion on the court as to whether a remedy should be awarded or what the appropriate remedy might be. There are many statutes where the remedy is discretionary and yet a limitation period is expressly laid down in the statute or it has been held that the 1980 Act applies [223].
14. Finally, on stale claim Lord Burrows found that almost invariably, unjustified delay will mean that there is prejudice to the defendant or a third party. If that is so, then a court, exercising its statutory discretion, can refuse to make the order sought even though the relevant limitation period has not expired.

Conclusion

15. We are back to where we were before Zedra! The majority of the Supreme Court has held that a claim under section 994 is neither an ‘action upon a specialty’ under section 8 of the 1980 Act nor, as regards any claim for monetary relief, an ‘action to recover any sum recoverable by virtue of any enactment’ under section 9 of the 1980 Act. Therefore, no limitation period applies to claims under section 994.

This case summary was written by Charlie Newington-Bridges and Jack Pankhurst