Court of Appeal revives Al Othman Holding’s US$ 5 million claim, confirming objective test for acknowledgment of a debt

24/07/26

The Court of Appeal has handed down judgment in Al Othman Holding Company v Al Rajhi Holding WLL [2026] EWCA Civ 949, allowing an appeal against the Commercial Court's dismissal of a claim under a loan agreement on the ground that the claim was time-barred.

The claimant and defendant are companies within prominent Saudi Arabian family business groups. In 2014, the parties agreed that the defendant would pay the claimant US$5 million under a loan agreement, repayable only out of future distributions from a jointly-held investment vehicle, as a means of letting the claimant achieve an economic exit from that investment without the formalities of a sale. The loan funds were never advanced. When a distribution from that investment vehicle was proposed in 2018, the claimant emailed the defendant stating that it had “already sold” its shares but not yet received its funds; the defendant replied indicating that the claimant could retain the proposed distribution, and that it was to be treated “towards the amount due”.

One of the issues the claim turned on was whether the 2018 email amounted to an acknowledgment of the debt for the purposes of section 29(5) of the Limitation Act 1980, which would restart the limitation clock. At first instance, Mrs Justice Dias DBE held that it did not on two principal grounds: (a) the 2018 email referred to a sale of the shares rather than a loan; and (b) the evidence did not show that the individuals who sent and received the 2018 email on behalf of the parties had knowledge of the executed loan agreement. Therefore, although Al Othman was successful on all other issues in the claim, the Court dismissed the claim as time-barred: [2025] EWHC 3078 (Comm).

The Court of Appeal (Lewison LJ, Males LJ, Phillips LJ) held that whether a document amounts to an acknowledgment under section 29(5) is judged objectively, by reference to what a reasonable recipient would understand from its language in context. Crucially, the Court held that this reasonable recipient is to be attributed with the corporate knowledge of the receiving party. In the circumstances, the subjective knowledge of the individuals who sent and received the document was irrelevant. The Court also held that extrinsic evidence is admissible to identify the debt with the acknowledgment. Applying those principles, the Court held that the defendant's 2018 email plainly acknowledged a liability, and the only liability it could have referred to was that arising under the loan agreement. The appeal was allowed, and judgment entered for the claimant (with interest) in the sum of c.US$ 7.5 million.

The judgment can be read here.