The Supreme Court has handed down its long-awaited judgment THG Plc v Zedra Trust Company (Jersey) Ltd: [2026] UKSC 6 (on appeal from [2024] EWCA Civ 158).
Background to the Dispute
Zedra, a minority shareholder in THG, issued an unfair prejudice petition in 2019. In 2022, Zedra sought to amend its petition to include a new allegation relating to its exclusion from a 2016 bonus share issue. THG argued that any such claim was time-barred under the Limitation Act 1980 (“the 1980 Act”). THG relied on:
Section 8: a twelve year period for “actions upon a specialty”; and
Section 9: a six year period for “sums recoverable by virtue of an enactment”.
The High Court rejected THG’s limitation defence. THG then appealed to the Court of Appeal.
In its decision, the Court of Appeal held that the 1980 Act applies to unfair prejudice petitions brought pursuant to s.994 Companies Act 2006. Based on this decision, if a claim were not brought by the issuance of a petition within an applicable limitation period, then it would be time-barred and it would not be possible thereafter to bring it.
The Supreme Court decision
Zedra appealed to the UK Supreme Court. In its appeal, the question of whether a statutory limitation period under the 1980 Act applied to unfair prejudice petitions brought pursuant to sections 994 to 996 of the Companies Act 2006 (“the 2006 Act”) was again considered. In its judgment given on 25 February 2026, the Supreme Court overturned the Court of Appeal’s decision by a majority of four to one. The key issues determined by the Supreme Court were:
Is an unfair prejudice petition an “action upon a speciality” under section 8(1) of the 1980 Act and thus subject to a 12-year limitation period; and
Alternatively, is an unfair prejudice petition an “action to recover any sum recoverable by virtue of any enactment” under section 9(1) of the 1980 Act and thus subject to a six-year limitation period?
Is an unfair prejudice petition an “action upon a speciality”?
In short, no. The Supreme Court found that an action upon a speciality does not include all proceedings that are based upon a statute. It found that sections 994–996 of the 2006 Act do not create any substantive obligations, but rather, they exist to provide relief in respect of a state of affairs. Directors are subject to fiduciary obligations, and breach of those obligations may found a petition for relief under sections 994–996, but those sections do not themselves impose those obligations. Accordingly, an unfair prejudice petition under these sections is not an “action upon a speciality”.
In reaching this decision, the majority rejected what it referred to as the “wider Collin view” – i.e., they rejected the proposition, derived from Collin v Duke of Westminster [1985] QB 581, that section 8 of the 1980 Act applies to any claim brought under a statutory provision. The majority considered that the basis for the reasoning in Collin was that the relevant statute in that case was the source of the rights and obligations which the action was brought to enforce.
Is an unfair prejudice petition an action to recover a sum recoverable by an enactment?
The relevant relief sought by Zedra in its petition under section 994 of the 2006 Act was an order that the respondent directors pay equitable compensation to redress the loss it allegedly suffered by its exclusion from the issue of bonus shares. The Supreme Court considered the scope of section 9 of the 1980 Act, and found that a claim under section 994 is not a claim to enforce a liquidated or unliquidated obligation arising under a statute. Rather, it is a claim for such order as the court thinks fit for giving relief in respect of the matters complained of, where the court has the widest possible discretion as to the orders it may make.
Although a petition will specify the orders that the petitioner wishes the court to make, there is no entitlement to any particular form of relief. As such, if the court orders a person to make a payment, that order arises from the court’s exercise of its discretion, not “by virtue of” sections 994-996 themselves. The majority disapproved the "look and see" approach, which had been used by the courts in previous cases to determine whether a claim fell within section 9. The majority held that the cases where this approach had been applied, including Re Priory Garage (Walthamstow) Ltd [2001] BPIR 144, Rahman v Sterling Credit Ltd [2001] 1 WLR 496, and Hill v Spread Trustee Co Ltd [2006] EWCA Civ 542; [2007] 1 WLR 2404, had been wrongly decided as regards section 9 of the 1980 Act, and that, taking into account the time and resources of the parties and the court, no sensible regime would require the court to wait until the end of a trial to determine whether an action was time-barred.
Having held that no limitation period applies to a petition brought under s.994, the majority emphasised that delay in bringing a petition is something which the court can take account of in exercising its discretion to grant or refuse a remedy.
For further details of the case see the full judgment. If you would like to discuss any of the points raised by this article, please contact us.
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