Following the Supreme Court ruling that there is no statutory limitation period for unfair prejudice claims, lawyers warn businesses should take advice before taking steps that may upset shareholders.
In THG Plc v Zedra Trust Company Ltd [2026] UKSC 6, the Supreme Court confirmed that there is no statutory limitation period for claims brought under section 994 of the Companies Act 2006.
Section 994 allows minority shareholders to petition the court where the company’s affairs have been conducted in a manner that is “unfairly prejudicial” to their interests. Historically, it had been widely understood by practitioners that no limitation period applied to such petitions.
However, in 2024 the Court of Appeal departed from that long-held understanding, concluding that a six-year limitation period applied to section 994 claims. That decision caused significant debate in company law circles and created uncertainty for both companies and minority shareholders.
The Supreme Court has now overturned the Court of Appeal’s decision, restoring the previous understanding that section 994 petitions are not subject to a fixed limitation period.
Owen Williams, a solicitor advocate at national law firm Clarke Willmott LLP, said: “I am not surprised that the Supreme Court has overturned the Court of Appeal’s decision. For decades it had generally been understood that no limitation period applied to section 994 petitions, and the Court of Appeal’s decision in 2024 came as a surprise to many practitioners. The Supreme Court’s judgment restores the position that most lawyers had long assumed to be correct.
“The practical implication is that there is no hard deadline for a disgruntled minority shareholder to complain about their treatment at the hands of the majority.
“Businesses and majority shareholders should therefore take advice before taking steps that are likely to upset minority investors, so that the risk of an unfair prejudice petition, whether now or in the future, can be properly managed.”
The judgment is expected to provide clarity for commercial litigation practitioners and corporate advisers dealing with shareholder disputes, confirming that courts retain broad powers under section 994 to craft remedies where unfair prejudice is established.
Speak to a specialist
Contact our commercial and private client litigation team through or our online form or call us on 0345 209 1000
Posted:
