Section 994 of the CA allows a shareholder in a company to petition to the court for a remedy on grounds that the company’s affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or some of its members, or that an actual or proposed act or omission of the company is or would be unfairly prejudicial. If unfairly prejudicial conduct is established, the court may grant a variety of relief that it thinks fit pursuant to section 996 of the CA, including the payment of compensation.

Meanwhile, the Limitation Act of 1980 (the 1980 Act) governs time limits for bringing proceedings in a court of law. Section 8 of the 1980 Act provides that unless an action for which a shorter period of limitation is prescribed elsewhere in the Act, “[a]n action upon a speciality shall not be brought after the expiration of twelve years from the date on which the cause of action accrued.”

Under Section 9 of the 1980 Act, “An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

Finally, Section 36 of the 1980 Act disapplies the limitation periods in sections 8 and 9 for “any claim for specific performance of a contract or for an injunction or for other equitable relief”, except where the court applies such time limit by analogy in limited circumstances.

Zedra acquired a 13.2% stake in THG plc in 2011 when it was a private company under the name of The Hut Group Ltd. In 2019, Zadra filed a petition to the court under section 994 of the CA, alleging that the conduct of THG’s affairs was unfairly prejudicial to it in a number of respects.

In 2022, Zadra sought to amend its petition to include an allegation that it was unfairly prejudiced by being excluded from a bonus issue of shares made more than six years earlier to some shareholders, seeking equitable compensation for its alleged loss.

THG opposed the amendment, arguing that it was “an action to recover any sum recoverable by virtue of any enactment” and therefore time-barred by section 9 of the 1980 Act.

The High Court held that the 1980 Act does not impose any limitation period to petitions under section 994 of the CA and as such, the amendment was not time-barred and should be allowed.

On appeal, the Court of Appeal ruled that all petitions under section 994 of the CA are subject to a 12-year limitation period under section 8 of the 1980 Act and that claims for monetary relief under section 994 are subject to a six-year limitation period under section 9. As the only remedy Zedra sought was compensation, its claim fell within section 9 and was therefore time-barred.

Zedra appealed to the Supreme Court, arguing that neither section 8 nor 9 of the 1980 Act applied to an unfair prejudice petition.

In a 4-1 majority decision, the Supreme Court allowed Zedra’s appeal, holding that a claim under section 994 is neither an “action upon a speciality” under section 8 of the Limitation Act, nor an “action to recover any sum recoverable by virtue of any enactment” under section 9 of the Act.

The central issue in this case on appeal is whether any limitation period applies to unfair prejudice petitions under section 994 of the CA.

The Supreme Court decided that:

• Under section 8 of the 1980 Act, “an action upon a speciality” is, in essence, an action to enforce an obligation which is created by a deed or a statute. Section 994 of the CA, however, does not create any obligations but merely provides for remedies and rights of petition if there is or has been unfair prejudice in the conduct of a company’s affairs. Hence, a claim under section 994 is not an action upon a specialty and section 8 does not apply.
• The majority consider that a claim under section 994 of the CA seeking only monetary relief is not an “action to recover any sum recoverable by virtue of any enactment” under section 9 of the 1980 Act. This is because the court has wide discretion under section 996 to grant any type of relief it seems fit and is not confined to the order sought by the petitioner. Therefore, the 6-year limitation under section 9 does not apply.
• Zedra was not seeking “equitable relief” within the meaning of section 36(1) of the 1980 Act, and the limitation periods in sections 8 and 9 are not disapplied if otherwise applicable.

Zedra’s appeal was therefore not time-barred and allowed to proceed.

British Virgin Islands

Section 184I of the BVI Business Companies Act (Revised) 2020 allows members of a company to petition for relief where the affairs of the company have been (or are being or are likely to be) conducted in a manner that is “oppressive, unfairly discriminatory, or unfairly prejudicial to him or her.”

The BVI Limitation Ordinance 1961 prescribes time limits within which a claimant must commence proceedings, and contains provisions with wording (ie, “an action upon a specialty” and “actions for a sum recoverable by virtue of any enactment”) in sections 4(3) and 4(1)(d) that are comparable to sections 8 and 9 of the 1980 Act.

It is, however, already settled law in the BVI that no limitation period applies to unfair prejudice claims. In Sumitomo Mitsuitrust (UK) Ltd v Spectrum Galaxy Ltd, Justice Jack held that there is no limitation period for claiming unfair prejudice. In J F Ming Inc v Ming Siu Hung, Blenman JA observed that it was “settled law” that no statutory limitation period applies to unfair prejudice claims, but delay by the petitioner would be relevant in assessing the fairness of the treatment of the minority and to the appropriate remedy.

The UK Supreme Court decision, therefore, will not affect unfair prejudice claims under section 184I of the BVI Companies Act. That said, delays and reasons for the delay in bringing an unfair prejudice petition are important considerations to the court when deciding such claims and the types of relief that will be afforded. The court would be particularly attuned to the prejudice to the defendant as a result of the delay, whether the claimant benefited from the delay, and whether the delay in some way affected the fairness of the litigation process.

Cayman Islands

There is no comparable free-standing unfair prejudice jurisdiction in the Cayman Islands. Instead, claims of unfairly prejudicial conduct of a company’s affairs must be brought in the context of a winding-up petition on just and equitable grounds under section 92(e) of the Companies Act. The Cayman courts have repeatedly held that the sole gateway to obtaining the alternative relief set out in section 95(3) of the Companies Act (such as an order regulating the conduct of the company’s affairs) is through section 92.

It has similarly been established that no limitation period applies to winding up petitions, and they are not subject to the limitation periods prescribed by the Cayman Islands Limitation Law (1996 Revision). It is, however, worth noting that the court will scrutinise whether there has been an unreasonable delay in bringing such a petition, and a claimant who sits on its hands risks having its petition struck out due to laches or staleness.

Bermuda

Bermuda has a minority oppression jurisdiction set out in section 111 of the Companies Act 1981, which is broadly analogous to section 994 of the CA. This provision allows registered shareholders to petition the Supreme Court for relief where a company’s affairs have been conducted in a manner that is oppressive or unfairly prejudicial to their interests as members.

No fixed time bar applies under Bermuda’s Limitation Act 1984. This aligns with the nature of the remedy: it is discretionary, equitable in character and often involves ongoing or cumulative conduct. The court’s focus on whether relief is just and equitable in the circumstances, rather than applying a rigid cutoff.

As is the case in the BVI and the Cayman Islands, delay can still be a significant factor. Excessive or unexplained delay by the petition may lead the Court to refuse relief, particularly if it prejudices the company, other shareholders or third parties.