On 25 February 2026, The Supreme Court handed down its judgment in The Hut Group PLC v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6. Allowing the appeal, they have confirmed that no statutory limitation period applies to unfair prejudice petitions under section 994 of the Companies Act 2006 (“the Companies Act”)

Unfair Prejudice Petitions: Purpose

Section 994 of the Companies Act provides a means by which a minority shareholder can seek the court’s intervention into company affairs where they believe the company’s affairs are being conducted in a manner that is both prejudicial and unfair to its interests as a shareholder.

The legal requirements for a successful petition are that:

1.    The conduct complained about must be conduct of the company’s affairs;

2.    That conduct must prejudice the petitioner’s interest as a shareholder; and

3.    That conduct must be unfair.

The leading authority on the meaning of “fairness” remains Lord Hoffman in O’Neil v Phillips [1999] 1 WLR 1092 where it was said to be considered in its commercial context and with regard to the company’s articles of association and collateral agreements.

Unfair Prejudice Petitions: Remedies

The relief available upon a successful section 994 petition is set out in section 996 of the Companies Act. Section 996(1) allows the court to make “such order as it thinks fit”, and Section 996(2) provides a wide, non-exhaustive list of potential orders the court may make including regulating future conduct or requiring the company to act or refrain from specific conduct. As highlighted by Lewison LJ when the Zedra Trust case was in the Court of Appeal[i], an award of compensation is one form of relief that the court can grant if it finds a petition to be well-founded.

Limitation Periods: Rationale

 The imposition of limitation periods reflects the fundamental policy that the litigation of stale claims has the potential to cause significant injustice. Delay can:

1.    Damage the quality of evidence;

2.    Divert judicial resources that should have been used in the past;

3.    Increase uncertainty.

The Limitation Act 1980 (“the Limitation Act”) applies to nearly all types of claim, however section 36 excludes its application to the equitable jurisdiction and remedies “except in so far as any such time limit may be applied by the court by analogy”.

“Received Wisdom”

For decades, practitioners and indeed courts have operated on the basis that no statutory limitation period applied to section 994 petitions. This was stated explicitly in Bailey v Cherry Hill Skip Hire Ltd [2022] EWCA Civ 531 at [36] “there is no statutory period of limitation applicable to unfair prejudice petitions”. Under this approach, delay was addressed through judicial discretion as to remedy under section 996, not through the Limitation Act.

Underlying Facts

Zedra Trust Company (Jersey) Ltd (“Zedra”) was a minority shareholder in The Hut Group PLC (“THG”). Between February 2016 and May 2018, THG allotted shares, of the same class as those held by Zedra, to 4 new shareholders. Zedra did not receive any of the new shares. Zedra initiated a claim in 2019 against serving and previously serving directors. In June 2022, it applied to amend its claim under section 994 to include the allegation it had suffered prejudice by reason of the issuance of new shares. THG resisted the additional claim on the basis that it was time-barred under section 9 of the Limitation Act.

First instance - [2023] EWHC 65 (Ch)

At first instance, the High Court allowed Zedra’s application; Fancourt J cited the case of Cherry Hill at [104]

"There is no statutory period of limitation applicable to unfair prejudice petitions. It was common ground before us that where there has been delay in the issue of a petition under s.994, the correct approach is that which was adopted by Fancourt J in Re Edwardian Group Ltd, Estera Trust (Jersey) Ltd and another v Singh and others [2018] EWHC 1715 (Ch), [2019] 1 BCLC 171 at [571].

" … the right approach is to consider how the delay in question should affect the exercise of the court's discretion under section 996 to make such order as it thinks fit. There is no statutory time limit for issuing a petition, nor does the equitable doctrine of laches strictly apply where the relief sought is not equitable relief. However, unjustified delay resulting in prejudice or an irretrievable change of position (the essential ingredients of a defence of laches) are likely to be significant factors in the exercise of the court's discretion to grant or refuse a particular remedy. So too is any evidence that the Petitioners have previously acquiesced in the state of affairs of which they now complain, which is the basis of a number of the authorities to which I was referred. If, in view of the delay and the reasons for the delay, it is unfair or inappropriate in all the circumstances for the Petitioners to obtain the relief that they seek, the Court will exercise its discretion to refuse it." [Emphasis added].

In terms of considering delay when no limitation period applies, Fancourt J then cited Peter Gibson J’s judgment in Re DR Chemicals (1989) 5 BCC 39 in which he stated that the test was whether the delay "renders it inequitable for [the Petitioner] to be allowed to obtain relief.” 

THG then appealed this decision to the Court of Appeal.

Court of Appeal – [2024] EWCA Civ 158

The appeal addressed one core issue: whether any statutory limitation period applies to a petition under section 994 and, if so, what that period is.  Historically, courts have relied on the breadth of the remedial discretion under section 996 to manage stale claims, rather than applying statutory limitation periods. Departing from this long‑standing approach, the Court of Appeal held that:

1.    A petition initiating proceedings is a "proceeding in a court of law" for the purposes of the Limitation Act, therefore it is possible for a section 994 petition to fall within the scope of the Act.

2.    It was not bound by the ratio of Cherry Hill and contrary to “over 40 years’ received wisdom”, Cherry Hill was wrong, Cherry Hill had not gone beyond the assumption that the “received wisdom” had no legal foundation and that limitation periods do apply to unfair prejudice petitions. The length of the limitation period was dependent on the relief sought:

a.    For an “action upon a specialty” the limitation period is 12 years under section 8 of the Limitation Act (this is typically the default position). The Court of Appeal deemed that, because the right to bring an unfair prejudice petition arises from, and does not exist beyond, the Companies Act, section 994 petitions are actions upon a specialty.

b.    For an “action for recovery of any sum by virtue of any enactment” the limitation period is 6 years under section 9 of the Limitation Act. As stated at [129] of the Court of Appeal judgment, where “(a) the right to go to court is purely statutory and  (b) the only relief sought is the payment of money (whether liquidated or unliquidated), I would hold that the action falls within section 9 of the Limitation Act 1980, with the consequence that it cannot be brought more than six years after the matters complained of.

The Court of Appeal held that statutory limitation periods do apply to section 994 petitions, with the applicable period determined by the remedy sought in the petition. This decision shifted, albeit not entirely, the responsibility for striking out stale claims from the wide discretion of the court under section 996 of the Companies Act to the statutory regime under sections 8 and 9 of the Limitation Act. Some commentators, including Lord Burrows in his dissent, argue that applying the Limitation Act to section 994 petitions introduces greater certainty by imposing a fixed period within which claims must be brought. However, given the distinctive nature of the section 994 petitions, the Court of Appeal’s approach raised several significant public‑policy concerns.

Problem 1: Confusion Around Ongoing Conduct

Identifying when unfairly prejudicial conduct “occurred” for the purposes of limitation becomes considerably more complex once fixed limitation periods are imposed. Unfair prejudice petitions commonly arise from repeated, continuous, or cumulative conduct, where no single act alone is sufficient to constitute unfairness or trigger the running of time.

Prior to the Court of Appeal’s decision, and now after the Supreme Court’s decision, this was not an issue. The court’s wide discretion under section 996, combined with the long‑standing assumption that limitation periods did not apply, meant that petitioners did not need to pinpoint a precise moment when the unfairness crystallised. If the Court of Appeal judgment had been upheld, there would have been an obligation on the petitioner to identify a specific point in time when the petitioner had sufficient grounds to issue a petition. Identifying this time would likely have been the subject of further dispute and would have risked obscuring the true cumulative or evolving nature of many forms of unfair conduct.

Further, a consequence of Lewison LJ’s reasoning at [36]-[37] was that out-of-time conduct could be incorporated into an unfair prejudice petition if it formed part of a “cumulative course of conduct” or the later events when viewed alongside the former were enough to constitute unfair prejudice. This would also have caused confusion as to what conduct could be incorporated from what time periods, and whether the conduct was an isolated incident or ongoing.

Problem 2: Abuse by Tactical Petitioners

Although the Court of Appeal attempted to distinguish between actions “on a specialty” and actions for “recovery of any sum by virtue of any enactment”, as a result of the Court of Appeal decision, the reality was that any petitioner with a competent legal team would craft their claim such that the 12-year limitation period applied, for instance by incorporating the repayment of a loan (which alone may be subject to section 9, 6-year limitation period) into an adjustment to a buyout order, which was expressly stated not to be monetary relief but rather something akin to specific performance and therefore subject to section 8, 12-year limitation period.

Moreover, petitioners could deliberately delay issuing proceedings for strategic reasons, such as waiting to see whether the company’s value increases, thereby inflating the value of a buyout order. This would run directly counter to the policy objectives underlying limitation periods and the broader public interest in avoiding stale claims.

Problem 3: Importance of Delay

Lewison LJ stated, albeit obiter, that it may be possible “on particular facts” to strike out petitions for delay despite them being brought in-time for limitation purposes. He stated that he preferred to leave the question “unresolved” for now. Snowden LJ said that this issue gave him “significant pause for thought”. The absence of clear guidance on this topic would likely have resulted in divergent first‑instance decisions regarding the weight to be given to delay in each case. This uncertainty undermined any suggestion that importing statutory limitation periods introduces clarity as residual judicial discretion could be exercised inconsistently.

Problem 4: Lack of Logic?

If sections 8 or 9 of the Limitation Act applied to section 994 petitions depending on the relief sought this would generate several logical difficulties:

1.    If a petitioner initially sought non‑monetary relief but ultimately obtained monetary relief, would that retrospectively shorten the applicable limitation period? If so, petitioners would have faced the untenable position of pursuing relief without certainty as to the limitation regime governing their claim at the time of filing.

2.    Where a petition sought a suite of remedies, such as equitable compensation, a buyout order, and injunctive relief, would the court have taken a carving knife to the petition and applied different limitation periods to each component? Such a fragmented approach would have undermined predictability.

3.    Limitation periods in the Limitation Act ordinarily turn on the type of claim (for example, tort, contract, recovery of land) not the type of remedy sought. The focus in this context on relief rather than the underlying nature of the claim appeared conceptually inconsistent with the structure of the Act.

Supreme Court - [2026] UKSC 6

The Supreme Court, allowing the appeal by a four to one majority, have confirmed that no limitation period applies to unfair prejudice petitions. The majority concluded that a claim under section 994 is not an “action upon a specialty” for the purposes of section 8 of the Limitation Act, nor, even where monetary relief is sought, an “action to recover any sum recoverable by virtue of any enactment” within section 9 of the Limitation Act. Lord Burrows dissented, maintaining that the Court of Appeal’s approach was correct to hold that sections 8 and 9 of the Limitation Act did apply.

Section 8 – “action upon a specialty”

The first issue was whether a section 994 petition constitutes an “action upon a specialty”. The Court examined the historical meaning of that expression, noting that at common law such actions were confined to enforcing obligations created by deed or statute, typically through actions of debt or covenant. Debt actions concerned recovery of a liquidated sum due under seal, while covenant actions sought damages for breach of a promise under seal. The legislative history, including the Court of Appeal’s decision in Collin v Duke of Westminster [1985] QB 581 (“Collin”), revealed two competing approaches:

1.    a “narrow” view, limiting section 8 to obligations arising from statute or deed; and

2.    a “wide” view, treating any cause of action dependent on statute as a specialty.

The majority held 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”, and that sections 994–996 do not create obligations but instead confer a discretionary jurisdiction to grant relief in response to a state of affairs. On that basis, a section 994 petition does not fall within section 8.

Lord Burrows disagreed. In his view, the correct test, consistent with Collin, is whether the cause of action would not exist but for the statute. He argued that section 994 implicitly imposes an obligation on the company to conduct its affairs in a manner that is not unfairly prejudicial, and that the majority’s focus on explicit statutory obligations was unduly narrow. He also rejected the suggestion, advanced by Lord Hodge and Lord Richards, that “specialty” should be confined to monetary obligations, pointing out that this would render several established authorities, including Collin, incorrect. Lord Lloyd‑Jones and Lord Briggs accepted that section 8 can extend to non‑monetary statutory obligations but nonetheless agreed that section 994 does not fall within it.

Section 9 - “action to recover any sum recoverable by virtue of any enactment”

The second issue was whether a section 994 petition is an “action to recover any sum recoverable by virtue of any enactment” under section 9 of the Limitation Act. The majority held that it is not. Section 996 gives the court a wide discretion to grant whatever relief it considers appropriate. A monetary order may be granted even if not sought, or refused even if sought, and any obligation to pay arises only from the court’s discretionary order, not from the statute itself. A petition therefore does not seek a sum “recoverable by virtue of” the enactment. The majority considered it both unprincipled and impracticable to apply a six‑year limitation period only where the court ultimately decides to award money. Applying section 9 only to some possible outcomes of the same petition would, in their view, border “on the absurd”.

Lord Burrows again dissented. He considered that a claim for compensation under section 996 is, on its face, a claim to recover a sum recoverable by virtue of statute. He argued that many statutory causes of action involve discretionary remedies yet still attract limitation periods, and that there is no conceptual difficulty in applying limitation to a statutory claim simply because the court has discretion over the remedy. He proposed a “look and see” approach: where the substance of the petition is a claim for monetary relief, section 9 should apply; where non‑monetary relief is sought, section 8 should apply. He accepted that this would result in different limitation periods for different remedies arising from the same cause of action, but considered that this was a consequence of the statutory scheme rather than a reason to avoid applying the Limitation Act.

A Policy Success, But at What Cost?

The decision reflects a tension between technical statutory interpretation and broader policy considerations. The majority’s reasoning avoids the practical difficulties that would have followed had the Court of Appeal’s decision been upheld, though its highly technical reading is open to criticism.

While the majority held that a section 994 petition is not an “action on a specialty”, the majority were split 2-2 on the actual definition of “specialty”. Lord Hodge and Lord Richards held that the term specialty is limited to monetary claims, rejecting the foundation of Collin. Whereas Lord Lloyd-Jones and Lord Briggs concluded that the term, while limited to obligations arising by statute, does not have to entail a money claim. This leaves unresolved whether non‑monetary statutory obligations fall within the definition of a specialty: a question now left for future determination.

Although the Court held that section 994 petitions are not actions on a specialty, the competing definitions of “specialty” create potential ripple effects across other statutory regimes. Statutory obligations previously assumed to be subject to a statutory limitation period may now not be. If the narrow view of specialty (i.e statutory monetary obligations only) gains traction, some statutory claims long thought to be subject to a statutory limitation period may instead depend solely on judicial discretion.

The unfair relationship provisions in sections 140A–C of the Consumer Credit Act 1974 illustrate the point. Sections 140A-C of the Consumer Credit Act 1974 gives the court extensive remedial powers where it determines that the relationship between the creditor and the debtor arising out of the agreement, or the agreement taken with any "related agreement", is unfair to the debtor because of reasons set out in section 140A.  In Smith v Royal Bank of Scotland plc [2023] UKSC 34, it was common ground that a 6-year limitation applied under section 9 of the Limitation Act. Much like section 994 and 996, the Consumer Credit Act does not impose an obligation on the lender. The remedies available are not restricted to the recovery of a sum (see for example section 140B(1)(b) in which the creditor may be required to do (or cease doing) something). Applying the Supreme Court’s reasoning, a claim under sections 140A–C is neither an action upon a specialty nor an action for the recovery of a sum by virtue of an enactment. No limitation period under sections 8 or 9 should therefore apply.

This is especially significant given the recent case of Hopcraft v Close Brothers; Johnson v FirstRand Bank Limited [2025] UKSC 33 UKSC 33 (A further note on that case can be found here). Claims were confined to the unfair relationship route after the Court rejected the existence of a fiduciary relationship between customer and dealer. A limitation defence is part of the repertoire of defences available to a bank’s, however after this decision that may not be so. There are likely to be other statutes that require re‑evaluation, so watch this space.

Conclusion

Practitioners can now take a deep breath as the practical and doctrinal problems arising from the Court of Appeal’s approach have been avoided. No limitation period applies to section 994 petitions. While the Supreme Court’s reasoning is technically coherent, the judgment leaves open important questions about the scope of “specialty” and the limitation treatment of other statutory claims: issues that will likely return to the appellate courts soon.

Note: This is a general summary of a recent judgment and is made available for general discussion purposes only between CANDEY and its clients and prospective clients. This memorandum does not constitute legal advice and must not be relied on as such. It should also not be cited as legal or academic authority.

CANDEY is a boutique litigation law firm that has extensive experience and resources to evaluate and advise on commercial and corporate litigation. In particular, we can guide shareholders through the unfair prejudice litigation process, assessing early on the difficult procedural and evidentiary challenges that type of litigation involves

[i] See The Hut Group PLC v Zedra Trust Company (Jersey) Ltd  [2024] EWCA Civ 158 at [9] – [10] citing David Richard LJ in Re The Hut Group Ltd [2021] EWCA Civ 904, [2021] 2 BCLC 373 at [66]