Unfair Prejudice Petitions in Practice

Section 994 of the Companies Act 2006 gives minority shareholders a remedy for unfairly prejudicial conduct — a broad, fact-sensitive standard that has produced a correspondingly broad body of case law over the past two decades.

This paper reviews the current state of that case law, focusing on the valuation methodologies tribunals have favoured in buy-out orders, and the practical evidentiary burden minority shareholders face in establishing prejudice where the majority's conduct falls short of outright misconduct.

Valuation date remains the most contested procedural question. Whether a buy-out is valued at the date of the petition, the date of the unfairly prejudicial conduct, or the date of trial can materially affect outcome, particularly for businesses whose value has changed significantly during the litigation.

We conclude with practical guidance for both petitioners and respondents on structuring valuation evidence early, given how often these petitions are resolved through negotiated buy-outs rather than final tribunal orders.