The Limitation Re-Set: What THG v Zedra Might Mean for Insolvency Claims  

Introduction

The Supreme Court’s decision in THG Plc v Zedra Trust Company (Jersey) Ltd[1] confirms that unfair prejudice petitions under s.994 of the Companies Act 2006 (“CA 2006”) are not subject to any statutory limitation periods under the Limitation Act 1980 (“LA 1980”). The judgment overturns the Court of Appeal’s earlier decision and restores the previously understood position. Whilst the judgment provides clarity, the Supreme Court’s approach to and its analysis of certain aspects of the LA 1980 (ss.8 and 9 in particular) raises fresh questions about how limitation might apply to other claims, including those available to insolvency practitioners under the Insolvency Act 1986 (“IA 1986”).

Case facts

Zedra Trust Company (Jersey) Ltd (“Zedra”) was a minority shareholder in THG Plc (the “Company”) having acquired its 13.2% stake in 2013. In 2019, Zedra issued an unfair prejudice petition under s. 994 of the CA 2006, alleging that THG and nine of its current or former directors had run the company in a way that was unfairly prejudicial to Zedra’s interests.

The petition went through a series of developments. THG tried to have the petition struck out. Their attempt failed at first instance but partly succeeded in the Court of Appeal, which allowed the petition to continue only in relation to two specific complaints:

(1) that THG’s directors had removed valuable “co‑sale rights” attached to Zedra’s shares, and (2) that the directors had breached Zedra’s contractual right to information.

Zedra applied to amend its petition to add (inter alia) a new allegation based on a bonus share issue made by THG in 2016 (more than 6 years prior), which led to the Supreme Court appeal. In 2016, THG had allotted 16,802 D ordinary shares to four shareholders by converting company reserves into share capital. Zedra had received none of these shares. With the proposed amendment, Zedra sought to argue that excluding it was unfair and discriminatory, and that the directors had breached their duties by failing to act lawfully, in good faith and fairly between shareholders when deciding how to allocate the shares.

Zedra said that, had it been treated properly, it would have received a proportional share of the 16,802 D shares. It said that it would have converted these shares[2] before THG’s IPO in September 2020 and sold them at £5 per share during the IPO. Zedra said that as a result of the failure to transfer it any of the D shares, it had suffered a loss in the region of £1.8 – £2.0 million.

THG opposed the amendment to add the new claim on the basis that it was time barred, because it was brought more than 6 years after the event.  THG relied on s. 9 of the LA 1980, which provides a limitation period of 6 years for an action to recover any sum recoverable by virtue of an enactment.

The High Court permitted the amendment and held that no statutory limitation period applied to unfair prejudice petitions brought under s. 994 of the CA 2006.

THG appealed. The Court of Appeal reversed the High Court’s ruling and held that unfair prejudice petitions were subject to statutory limitation periods under the LA 1980. The Court held that petitions under s. 994 of the CA 2006 were an “action on a specialty” within the meaning of s. 8 of the LA 1980, meaning that a 12-year limitation applied, unless the petition only sought monetary relief, in which case they would be action to recover sums by virtue of an enactment within the meaning of s. 9 of the LA 1980, such that a 6-year limitation applied. 

On that basis, the Court of Appeal held that the bonus-issue amendment was time barred.

The Supreme Court’s Judgment

Zedra appealed to the Supreme Court, arguing that no statutory limitation period applied to unfair prejudice petitions brought under s.994 of the CA 2006. The Supreme Court allowed Zedra’s appeal.

The Supreme Court held that neither s.8 nor s.9 of the LA 1980 apply to unfair prejudice petitions because such petitions do not seek to enforce a fixed, statutory cause of action. Instead, s. 994 creates a jurisdiction in which the court exercises broad discretionary powers. Three aspects of the Court’s reasoning are particularly important.

• • First, the Court confirmed (drawing on 19th‑century authorities such as Blyth v Fladgate and In re Powers, Ex p. Barnett) that an “action on a specialty” under s. 8 LA 1980 requires a claimant to enforce a specific, fixed obligation contained in a deed or statute. S.994 does not impose such an obligation. Instead, it creates an avenue for shareholders to complain of unfair prejudice, leaving the court to determine both whether prejudice exists and, crucially, what remedy (if any) should be granted. Because the statute does not prescribe a predetermined entitlement or fixed right, a petition under s.994 is not an “action on a specialty”.
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  • Second, the Court held that a petition seeking monetary relief under s. 994 is not an “action to recover a sum recoverable by virtue of any enactment” within the meaning of s. 9 LA 1980. S. 994 allows a member to petition the court on the basis that the company’s affairs have been conducted in a manner unfairly prejudicial to their interests; it is this statutory right to petition that brings s. 994 into play. However, any financial award under s. arises entirely from the court’s discretionary remedial jurisdiction: the statute does not render any sum “recoverable” in advance. The court may make (or decline to make) a compensatory order as part of achieving a fair outcome, but there is no statutory debt or fixed sum capable of being “recovered”.
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  • Third, the Court emphasised that the overall structure of ss.994–996 reflects the equitable character of the authority. It is fact‑sensitive, flexible, and centred on fairness rather than enforcement. The imposition of a statutory limitation period designed for defined legal entitlements would be incompatible with the nature of the remedy.

Accordingly, there is no statutory limitation period for unfair prejudice petitions, and the July 2016 complaint could be added to Zedra’s unfair prejudice petition despite being more than six years old.

Analysis

Where does this decision leave practitioners? The Supreme Court’s reasoning is significant beyond the context of company law. By clarifying that a claim does not automatically fall within the LA 1980 simply because it arises under statute, and by stressing the importance of discretionary remedial powers, the Court’s approach raises questions as to how limitation applies to other statutory regimes, particularly those under the IA 1986, where many remedies also turn on broad judicial discretion. The ruling that unfair prejudice petitions under s. 994 of the CA 2006 carry no statutory limitation period similarly raises questions about the practical implications for insolvency practitioners and others when dealing with claims under the IA 1986, .

Given that many IA 1986 claims (such as misfeasance, wrongful trading, and transaction‑avoidance claims) involve discretionary remedies, we may well see the courts continuing to treat IA 1986 remedies as governed by more equitable principles rather than rigid deadlines. Insolvency practitioners who previously believed older claims were out of time, may equally now find there is no absolute statutory bar, particularly where the statutory provision gives the court discretionary remedial powers.

The categorical time-bar argument no longer holds; that much is clear. However, our view is that the ultimate success of claims which relate to events over 12 years ago may nevertheless be to some extent (or even largely) dependent on the time in which it has taken to initiate proceedings. Claims may be obstructed by delay-based equitable defences (delay, prejudice, acquiescence, and the like). Additional difficulties may arise from an evidentiary perspective. Locating and amassing comprehensive documentary records from over 12 years ago will be a challenge not to be taken lightly. Practitioners will already understand that time degrades the ability of witnesses to recall contemporaneous events; can we really expect the Court to have confidence in the testimony of a factual witness recalling events from beyond 12 years ago? These are all matters to be tested in future cases.

[1] [2026] UKSC 6

[2] Conversion refers to the standard IPO process where non‑ordinary share classes convert into ordinary shares immediately before or on completion of the IPO. Source