Introduction
In THG Plc & Others v Zedra Trust Company (Jersey) Ltd [2024] EWCA Civ 158 (‘Zedra’), the Court of Appeal considered whether limitation periods apply to unfair prejudice petitions under s.994 of the Companies Act 2006 and, if so, which limitation periods apply.
What are unfair prejudice petitions?
Unfair prejudice (or s.994) petitions provide shareholders with a mechanism for seeking relief where (1) the affairs of their company are being, or have been, conducted in a manner unfairly prejudicial to their interests or (2) an actual or proposed act or omission on the part of their company is or would be so prejudicial.
What did the Court decide?
Following a thorough review of the common law position in relation to ‘stale claims’ and the equitable doctrines of laches and acquiescence and the practice of applying common law limitation periods by analogy, the Court of Appeal determined to depart from decades of observed wisdom and decided that limitation periods do apply to unfair prejudice petitions.
The applicable limitation period will depend, largely, upon the relief sought. In most cases, the limitation period will be 12 years under section 8 of the Limitation Act 1980; however, where the claim is for compensation or monetary relief, the limitation period will be six years under section 9 of the Limitation Act 1980.
Future implications
The future implications of Zedra will require time, and a test case, to be revealed.
Whether Court’s will continue to exercise discretion to dismiss claims brought within limitation periods on the ground of delay or acquiescence, is arguably the key unanswered question.
Legal Assistance
If you, as a shareholder in a company, feel that the affairs of their company are being, or have been, conducted in a manner unfairly prejudicial to your interests or that an actual or proposed act or omission on the part of their company is or would be so prejudicial to you, then we can help.
Assisting shareholders to navigate these complex matters requires a thorough understanding of corporate and commercial law. Whether addressing your exclusion from decision-making, the improper diversion of company resources, or actions that dilute the value of your shareholding, our goal is to ensure your rights are protected, advanced and, if required, enforced.
We recognise that every case is unique. We strive to offer pragmatic, strategic and creative litigation solutions, to maximise outcomes for our clients.
How to get in contact
If you require assistance with a shareholder dispute or any other commercial dispute and are interested in finding out how we can help, please e-mail our dispute resolution team or call +44 (0)203 987 0222.
