Al Othman Holding Company v Al Rajhi Holding WLL [2026] EWCA Civ 949

[2026] EWCA Civ 949Case No CA-2025-003083
IN THE COURT OF APPEAL (CIVIL DIVISION)
[2025] EWHC 3078 (Comm)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSIN all ESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING’S BENCH DIVISION
COMMERCIAL COURT
Mrs Justice Dias DBE
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 23/07/2026
Before
LORD JUSTICE LEWISONLORD JUSTICE MALESLORD JUSTICE PHILLIPS
Between
AL OTHMAN HOLDING COMPANYAppellant/AL RAJHI HOLDING WLLRespondent/Defendant
Tony Singla KC & Vanshaj Jain (instructed by Morrison Foerster (UK) LLP) for AppellantAndrew Westwood KC & Darragh Connell (instructed by Gateley Legal) for RespondentHearing Hearing date: 15 July 2026
Approved JudgmentThis judgment was handed down remotely at 10.30am on Thursday 23 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................
[1]The issue on this appeal is whether the respondent defendant’s email sent on 1st November 2018 amounted to an acknowledgment of the appellant claimant’s claim against it for the purpose of section 29(5) of the Limitation Act 1980. If it did, time started to run again for limitation purposes and the present proceedings are brought in time. If not, the claim is barred by limitation.[2]The claim is for payment of US $5 million said to be due under a Loan Agreement dated 24th November 2014 by which it was agreed that the defendant would make an interest-free loan to the claimant, to be repaid solely out of distributions received by the claimant as a shareholder in a company called Al Salam Energy Ltd in which the defendant was also a shareholder; and that until the loan was repaid the claimant would grant the defendant a security interest in the shares and would vote them in accordance with the defendant’s instructions. In the event the loan funds were never provided to the claimant. Some years later, when a distribution to shareholders in Al Salam was proposed, the claimant sent an email to the defendant dated 29th October 2018, stating that:
‘As you know, we already sold our shares to Rajhi Holdings but we did not get our funds yet. Will the below dividends be considered as interest?’
[3]The defendant’s response, in an email sent on 1st November 2018, was as follows:
‘Based on my understanding from Khalid Al Rajhi, this amount is to be considered towards the amount due as mentioned below in your email.’
[4]It is this message which is said to be an acknowledgment of the claim.[5]After a trial in the Commercial Court, Mrs Justice Dias held that the defendant’s email was not an acknowledgment, principally because it referred to a sale of the shares and not a loan. She therefore dismissed the claim. For the reasons explained below, I have reached the opposite conclusion. Although the email referred to a sale, there had never been any such sale and it is clear that what was being referred to was the transaction embodied in the Loan Agreement. I would therefore allow the appeal.

Background

[6]The claimant is a Saudi Arabian company in the family-owned and run Al Othman group of companies. Mr Abdullah Al Othman is its Vice-Chairman. He was, at least until the commencement of this litigation, a close personal friend of Mr Khalid Al Rajhi, who is the principal of the defendant. The defendant is a Bahraini company in the Al Rajhi group of companies, which is also based in Saudi Arabia and is family-owned and run. The two men were childhood friends who had been to school and university together, and the two families had a close and long-standing relationship, having done business together on a number of occasions over the years.[7]In about 2008, Mr Al Rajhi invited Mr Al Othman to join the defendant in investing in a company called Nutech Energy Alliance Ltd (‘Nutech’). The claimant invested about US $5.7 million for a stake of about 10%. The defendant also invested in Nutech, as did a number of other companies connected to friends and business associates of both Mr Al Rajhi and Mr Al Othman. The investment was held through a holding company, Al Salam Energy Ltd (‘Al Salam’), and the relationship between the investors was governed by the terms of a Shareholders’ Agreement dated 20th May 2008.[8]Unfortunately the investment was not a success. By 2013 Mr Al Othman, who thought that Nutech was not well-managed, wanted an exit for the claimant. He raised the matter with Mr Al Rajhi in late 2013 but was persuaded to wait as Al Salam was then in the process of negotiating a potential sale of Nutech to a Chinese company. However, the sale fell through. Mr Al Othman repeated his wish to sell the claimant’s shares in Al Salam at a meeting with Mr Al Rajhi in July 2014. Mr Al Rajhi was reluctant for the claimant to exit unilaterally since the principle underlying the investment was that the investors would all act together. However, Mr Al Othman insisted. In view of their close friendship, the long-standing relationship between the two families, and the fact that another company in which they had both invested was performing strongly, Mr Al Rajhi agreed that he would try to accommodate the claimant’s wish, but on the basis that any deal should be kept confidential from the other shareholders.[9]Both principals then delegated the matter to their respective subordinates to work out a solution: Mr Georges Abraham for the claimant and Mr Yaser Alsharifi for the defendant. Discussions between Mr Abraham and Mr Alsharifi continued throughout the following months. Initially the proposal was that the defendant would make an offer to purchase the claimant’s shares. However, one obstacle in the way of that proposal was that there were provisions of the Shareholders Agreement which would make it difficult for the defendant to purchase the claimant’s shares without informing the other shareholders. That led to Mr Alsharifi suggesting that, rather than buying the claimant’s shares, the defendant would make an interest-free loan of whatever was the value of its shares, with the loan to be repaid from any distributions or when the company was eventually sold. This would successfully achieve the claimant’s objective of an economic exit from its investment, while still complying with the Shareholders Agreement and avoiding the need to alert the other shareholders. It remained to determine the value of the claimant’s shares, which was then agreed at US $5 million.[10]A non-binding agreement in principle on this structure was reached between the parties. As

the judge put it:

‘86. It has never been in dispute that an agreement was reached orally between Mr Al Othman and Mr Al Rajhi in 2014 for the Defendant to make a loan of US$5 million to the Claimant as a way of allowing it to monetise its stake without actually selling it, such loan to be repayable out of future distributions in respect of Nutech. It is likewise not in dispute that this was an agreement in principle only and was not intended to be binding until all the details had been agreed and a written document signed.’

The Loan Agreement

[11]The written document which gave effect to this agreement was the Loan Agreement dated 24th November 2014. This provided for the defendant (‘the Lender’) to make an interest-free loan of US $5 million to the claimant (‘the Borrower’), repayable out of any distributions, such as dividends or eventual sale proceeds; and, in the meanwhile, for the claimant to grant the defendant a security interest in the shares and to vote them in accordance with the defendant’s instructions. It was signed by Mr Alsharifi on behalf of the defendant and by Mr Al Othman’s brother, Abdulmohsen Al Othman, on behalf of the claimant. It provided for English law and included the following terms:
‘Whereas, the Lender has agreed to make an interest free loan (“Loan”) to the Borrower in the amount of US$5,000,000 (“Principal Amount”), subject to the terms and conditions set forth in this Agreement; and Whereas, the Borrower is the holder of 2,596 ordinary shares of Al Salam Energy Ltd, a British Virgin Islands company limited by shares (“Shares”); and Whereas, the Lender and Borrower have agreed that the Loan shall be repayable solely out of distributions that the Borrower may receive or be entitled to receive with respect to the Shares and that Borrower shall have no further liability to repay the Principal under the Agreement beyond the amount of such distributions, except as provided below: Now, therefore, the parties hereby agree as follows: 1. Loan. The Lender shall make available to the Borrow [sic], and the Borrower agrees to borrow, the Loan, on the date hereof (or such later date as may be agreed between the parties). 2. Interest. The Loan shall not bear interest. 3. Repayment of Principal. The Borrower shall repay the Principal of the Loan solely out of the distributions received by the Borrower (or to which Borrower shall be entitled to receive) with respect to the Shares, except as provided in Section 7 (relating to default). Upon receipt of any such distribution, where in the form of a dividend, return of capital, liquidation proceeds or otherwise, the Borrower shall immediately retransfer the amount of such distribution to the Lender in partial or full repayment of the then outstanding balance of the Loan. 4. No Transfer of Shares; Voting of Shares. The Borrower shall not transfer or encumber the Shares prior to full repayment of the Loan. The Borrower shall vote the Shares in accordance with instructions given by the Lender. 5. Security Interest in the Shares. The Borrower hereby grants to the Lender a security interest in the Shares to secure its obligations under this Agreement. …’
Now, therefore, the parties hereby agree as follows:[12]It is no part of the claimant’s case that the Loan Agreement was anything other than what it purported to be. But it is the claimant’s case that the agreement was in practice economically equivalent to the sale of the shares which had originally been contemplated. I agree with that characterisation of the agreement. Its effect was that in return for an immediate payment of US $5 million, the claimant gave up its right to vote the shares and to receive dividends, gave the defendant a security interest in the shares, and incurred no personal liability to repay the loan or to pay interest. In practice, it had no further interest in the shares and had achieved the exit which it desired. It is true that if the shares had earned dividends exceeding US $5 million, or if Nutech or Al Salam had been sold for a price which would have entitled the claimant to more than the outstanding amount of the loan, the claimant would have benefited. But that possibility was regarded as remote and, in the event, did not arise.

Subsequent events

[13]There was no agreement on any later date for the provision of the US $5 million. The due date for its provision therefore remained as 24th November 2014, the date of the Loan Agreement. However, the funds were never provided to the claimant, either on 24th November 2014 or at any later date.[14]On some occasions over the next few years Mr Al Othman asked Mr Al Rajhi what was happening about payment, to which Mr Al Rajhi replied that he would check and revert to Mr Al Othman. In 2016 Mr Abraham raised the matter with Mr Al Rajhi, but Mr Al Rajhi’s response was that the matter should be dealt with at a principal to principal level.

The 2018 emails

[15]In October 2018 it was proposed that Nutech would declare a dividend which would be distributed to the investors in Al Salam. Mr Khalid Mattar, who was both the Board Secretary of Al Salam and the Deputy CEO of the defendant, sent an email to the investors (including Mr Ronald Rizk, the Chief Investment Officer of the claimant) asking for confirmation of the bank account to which the distribution should be paid. Mr Rizk’s reply, in an email dated 29th October 2018, was that:
‘As you know, we already sold our shares to Rajhi Holdings but we did not get our funds yet. Will the below dividends be considered as interest?’
[16]Mr Mattar’s response, in an email sent on 1st November 2018, was as follows:
‘Based on my understanding from Khalid Al Rajhi, this amount is to be considered towards the amount due as mentioned below in your email.’
[17]There were no further relevant communications between the parties until November 2021, when the management of Al Salam proposed to liquidate the company at a 90% loss on invested capital. That led to a telephone call between Mr Abraham and Mr Mattar in which Mr Abraham said that there was an agreement that the defendant would purchase the claimant’s position so that money would be owing to it on an exit from Nutech. By that stage, the original Loan Agreement could not be found, but there is no dispute that it had been signed and included the terms set out above. However, in a conversation between Mr Al Othman and Mr Al Rajhi in early 2023, Mr Al Rajhi maintained that there had only ever been a verbal and non-binding agreement between them.[18]We were told that Al Salam has indeed been liquidated at a substantial loss to the investors.

The proceedings

[19]On 6th September 2023, nearly nine years after the date of the Loan Agreement, the claimant issued the present proceedings seeking payment of the US $5 million which the defendant had promised to provide under the Loan Agreement.[20]The defendant advanced three principal defences. First, although it accepted that there was a non-binding agreement in principle between Mr Al Rajhi and Mr Al Othman for a US $5 million loan to be made by the defendant to the claimant, it maintained that Mr Alsharifi had no authority to sign the Loan Agreement on its behalf and that in any event it could not enter into any binding commitment without the approval of the Al Rajhi Family Council and/or Group Board, which had not been given. This defence was rejected by the judge, who held that Mr Alsharifi had actual authority to sign the Loan Agreement, which was therefore a binding contract. That conclusion is not challenged on this appeal.[21]Second, the defendant said that there was no obligation arising from the Loan Agreement to transfer the US $5 million to the claimant because clause 1 of the agreement provided for the date of transfer to be agreed between the parties, so that the agreement was no more than an agreement to agree. That defence was struck out by Mr Justice Foxton before trial. In his extempore judgment given on 13th May 2024 he said that the effect of the language of clause 1, considered together with other terms of the agreement, was that there was an obligation on the defendant to make the loan available on 24th November 2014, but the parties could agree to postpone that date if they chose to do so. As they had not done so, 24th November 2014 remained the applicable date for provision of the loan funds. The defendant did not appeal against the striking out of this defence.[22]Third, on the basis that there was an accrued obligation on the defendant to transfer US $5 million to the claimant on 24th November 2014, the defendant said that the claim was barred by limitation. In response, the claimant relied on the defendant’s email dated 1st November 2018 as an acknowledgment within section 29(5) of the Limitation Act 1980 which restarted the running of time for limitation purposes. The judge held that the email was not an acknowledgment within the statute and the claimant appeals. This is the only issue with which we are concerned on this appeal.

The judgment

[23]The judge began by noting that as well as having to be in writing signed by the person making the acknowledgment, the acknowledgment must be of ‘the claim’, that is to say of the claim to the debt being asserted in the proceedings. This was to be judged objectively by reference to what would have been reasonably understood by the recipient in the context in which the alleged acknowledgment was made. However, the judge then added, citing in support the decision of Mr Justice Hobhouse in Kleinwort Benson Ltd v South Tyneside MBC[1994] 4 All ER 972, that:
‘143. ... For this purpose, however, it is also necessary to look at the position as the parties understood it at the time, irrespective of whether the law might place a different analysis on the payment.’
[24]I am not sure what the judge meant by this, as (unlike Kleinwort Benson) this is not a case where there was any payment needing to be analysed. But in any event, as I shall explain, whether there has been an acknowledgment must be determined objectively.[25]In this case, the claim made by the claimant was for a debt arising under the written Loan Agreement dated 24th November 2014. So any acknowledgment would objectively have to have been in respect of the claim under that agreement. The judge gave four reasons why, in her view, the defendant’s email of 1st November 2018 did not satisfy this test.[26]First, she found as a fact that neither Mr Mattar nor Mr Al Rajhi was aware of the signed Loan Agreement (para 150). Second, Mr Rizk’s email referred to a sale and not a loan (para 151). Third, there was no evidence that Mr Rizk was even aware of the Loan Agreement (para 152). Fourth, Mr Rizk did not clarify at any later point that he was in fact referring to a loan transaction rather than a sale (para 153).[27]In those circumstances the judge concluded that there was no objective basis to construe Mr Mattar’s email as an acknowledgment of a valid claim under the Loan Agreement; and it was not enough that both parties had in mind an agreement whereby the claimant could achieve an economic exit from its investment in Al Salam. In her view Kleinwort Benson put the matter beyond all doubt:
‘155. ... In the same way that payment to discharge a liability under a swap contract is not an acknowledgement of a claim in restitution, acknowledgement of a claim in respect of the sale can hardly amount to acknowledgement of a claim under a contract of loan.’
[28]Accordingly the claim was time-barred.

Section 29(5)

[29]Section 29(5) of the Limitation Act 1980 is in these terms: ‘Subject to subsection (6) below, where any right of action has accrued to recover—(a) any debt or other liquidated pecuniary claim; or(b) any claim to the personal estate of a deceased person or to any share or interest in any such estate; and the person liable or accountable for the claim acknowledges the claim or makes any payment in respect of it the right shall be treated as having accrued on and not before the date of the acknowledgment or payment.’ (a) any debt or other liquidated pecuniary claim; or (b) any claim to the personal estate of a deceased person or to any share or interest in any such estate;[30]Subsection (6) is not relevant in these proceedings.[31]Section 30(1) provides that:
‘To be effective for the purposes of section 29 of this Act, an acknowledgment must be in writing and signed by the person making it.’

The claimant’s cause of action

[32]Although there was no issue about this in the court below, or indeed in the skeleton arguments prepared for this appeal, we enquired at the hearing as to the nature of the claimant’s cause of action – in particular, whether its claim (in the language of section 29(5)) was to recover a ‘debt or other liquidated pecuniary claim’. A claim by a borrower that the lender has failed to provide the promised loan funds does not seem to be a claim to recover a debt. If the funds had been provided, it would have been the claimant which incurred a liability as debtor, albeit that repayment was to be out of distributions made to shareholders, and it was the defendant who would have been the creditor. The claim seems to be more in the nature of a claim for specific performance of a promise to provide the funds. Moreover, while it is possible to envisage a claim for damages for breach of such a promise, if the claimant had suffered loss and damage (e.g. by having to borrow elsewhere on more expensive terms), section 29(5) would not apply to extend the time limit for a claim for damages.[33]Very fairly, however, Mr Andrew Westwood KC for the defendant acknowledged that it had never been the defendant’s case that the claimant’s claim was not one to which section 29(5) applied. He acknowledged also that there was no Respondent’s Notice seeking to take such a point on appeal. In those circumstances he did not feel able to advance any such submission.[34]I will proceed on the basis that the claimant’s claim is one to which section 29(5) applies, that is to say that the defendant was under an accrued obligation to make a payment of US $5 million to the claimant on 24th November 2014. That may be correct, on the basis that in seeking to claim the loan funds which the defendant ought to have provided, and in the circumstances of this rather unusual non-recourse Loan Agreement, the claimant’s right of action is to recover an ‘other liquidated pecuniary claim’. However, without the benefit of fully researched submissions on the point from either side, I would reserve my opinion on the point if it arises in any other case.

The case law

[35]Section 30(1) requires that an acknowledgment must be in writing. Accordingly, as with any other document said to have legal effect, the meaning of a document which is said to be an acknowledgment must be determined objectively by reference to the language of the document, considered in its context. I consider, therefore, that

the judge was right to say that:

‘143. Whether there has been an acknowledgment is judged objectively by reference to what would have been reasonably understood by the recipient in the context in which the alleged acknowledgment was made.’
[36]For this purpose it is necessary to consider the language of the document as a whole. In Surrendra Overseas Ltd v Government of Sri Lanka[1977] 1 WLR 565 the claimant shipowner sought to recover sums due on a final account under a voyage charterparty. The charterer admitted that the sums claimed by the owner should form part of the final account, but denied liability on the basis of cross claims which it claimed to be entitled to set off. Mr Justice Kerr held that the owner was not entitled to pick out the parts of the charterer’s statement of account which, taken in isolation, acknowledged the items which were to be credited to the owner:
‘What I draw from these authorities, and from the ordinary meaning of “acknowledges the claim”, is that the debtor must acknowledge his indebtedness and legal liability to pay the claim in question. There is now no need to go further to seek for any implied promise to pay it. That artificiality has been swept away. But, taking the debtor’s statement as a whole, as it must be, he can only be held to have acknowledged the claim if he has in effect admitted his legal liability to pay that which the plaintiff seeks to recover. If he has denied liability whether on the ground of what in pleader’s language is called “avoidance”, or on the ground of an alleged set off or cross-claim, then his statement does not amount to an acknowledgment of the creditor’s claim. Alternatively, if he contends that some existing set off or cross-claim reduces the claim in part, then the statement, taken as a whole, can only amount to an acknowledgment of indebtedness for the balance. In effect, “acknowledges the claim” means that the statement in question must be an admission of that indebtedness which the plaintiff seeks to recover notwithstanding the expiry of the period of limitation. In my judgment this analysis is supported by three considerations. First, I think that the statement relied upon as an acknowledgment must be taken as a whole; the creditor is not entitled to pick out parts and ignore others. Secondly, I think that an acknowledgment of indebtedness is the ordinary meaning of “acknowledges a claim” and that the pre-1939 authorities do not preclude any other conclusion. Thirdly, I think that this construction of the statute is in accordance with good sense and justice. ...’
[37]In her judgment in the present case, the judge placed some emphasis on Mr Justice Kerr’s reference, in the first sentence of this extract, to the need for the acknowledgment to be of a legal liability ‘to pay the claim in question’. While I do not doubt this, Surrendra was not a case in which any question arose as to what the claim was. Everybody knew that the owner was claiming the sums set out in its statement of account, less the payments which the charterer had made. The case has nothing to say about the interpretation of a message which appears on its face to acknowledge a liability under a contract of sale in circumstances where both parties know that there has been no such contract – or indeed about any situation where there is uncertainty or ambiguity about the nature of the claim.[38]The cases show that extrinsic evidence is admissible to show what it is that is being acknowledged. In Jones v Bellgrove Properties Ltd[1949] 2 KB 700 a company’s balance sheet included an entry ‘to sundry creditors £7,638’. Plainly, some liability was being acknowledged, but it was not clear to whom or for what. This court held that evidence was admissible to show that the claimant was one of the sundry creditors and that his debt was one of those included in the balance sheet. Lord Goddard CJ said:
‘I can see no reason why a balance sheet should not contain a good acknowledgment within the meaning of the Act. The acknowledgment was only of a sum due to a number of unnamed persons; but the plaintiff established by evidence that he was one of the sundry creditors and that his debt of £1807 was included in the total sum acknowledged to be due to those creditors. In my judgment, therefore, the claim was not barred.’
[39]In Dungate v Dungate[1965] 1 WLR 1477 the claimant lent various sums to his brother, who did not repay. The brother wrote a letter to the claimant saying, among other things, ‘keep a check on totals and amounts I owe you and we will have an account now and then. ... Sorry I cannot do you a cheque now’. Thus it was clear that some liability was acknowledged, but the amount of the liability was not. Citing Jones v Bellgrove Properties, Mr

Justice Edmund Davies said that:

‘Parol evidence is admissible to identify the acknowledgment with the debt and to ascertain the amount of the debt.’
[40]In this court,

Lord Justice Diplock said that:

‘There is clear authority that an acknowledgment under this Act need not identify the amount of the debt and may acknowledge a general indebtedness, provided that the amount of the debt can be ascertained by extraneous evidence. It has been possible in this case to ascertain by extraneous evidence what the indebtedness was, and the only question here is whether those words, “Keep a check on totals and amounts I owe you and we will have an account now and then. ... Sorry I cannot do you a cheque yet – terribly short at the moment”, amounts to an acknowledgment by George of his indebtedness to the plaintiff. In my view they plainly do amount to such an acknowledgment.’
[41]Although the judgments in this court were concerned with extraneous evidence to identify the amount of the debt, it is clear from Jones v Bellgrove Properties and the judgment of Mr Justice Edmund Davies at first instance that the relevance of such evidence is not so limited.[42]In Kamouh v Associated Electrical Industries International Ltd[1980] 1 QB 199, 209D-E Mr

Justice Parker said that:

‘It is clear that an acknowledgment within the statute does not have to say in terms, “I acknowledge that a certain sum is due”, but it does have to get as far as being an admission that something is due and that something must be ascertainable by extrinsic evidence.’
[43]In Ross v McGrath[2004] EWCA Civ 1054

Lord Justice Clarke held at para 16 that the authorities supported the following propositions:

‘1. The debtor must acknowledge his indebtedness and legal liability to pay the claim in question: see Spencer v Hemmerde[1922] 2 AC 507 at 516 and 532; Good v Parry[1963] 2 QB 418 at 423; Surrendra Ltd v Sri Lanka[1977] 1 WLR 565, 575 per Kerr J. 2. An acknowledgment need not identify the amount of the debt so long as the amount is capable of ascertainment by calculation, or by extrinsic evidence without further agreement of the parties: see Good v Parry 423; Dungate v Dungate[1965] 1 WLR 1477 at 1483. 3. Extrinsic evidence is admissible to identify the acknowledgment with the debt: see Dungate v Dungate at 1483. 6. The debtor must acknowledge his indebtedness and legal liability to pay the claim in question: see Surrendra Overseas Ltd v Government of Sri Lanka at 575.’
[44]After referring to the need to construe the document as a whole and in its context,

Lord Justice Clarke identified the relevant test as follows:

‘21. The question is what would reasonably be understood by the respondent as the recipient of the letter in the light of its language construed in its context.’
[45]Thus the test is objective, in that it depends on what would reasonably be understood by the recipient.[46]Ashcroft v Bradford & Bingley Plc[2010] EWCA Civ 223, [2010] 2 P&CR 13 is another case in which evidence was admissible, in this case to identify the debt to which a series of part payments was referable. The evidence showed that the only possible debt was that which arose on a building society loan. Lord Justice Sedley pointed out that although part payment could intelligibly be regarded as a sub-species of acknowledgment, it was explicitly separated from acknowledgment and given equal status by section 29(5), and could therefore be regarded as ‘a freestanding mechanism for the computation of time’ (para 14). Because there was no other debt to which the part payments could be referable, it was to be inferred that the part payments were in respect of the loan debt.[47]Finally, in Phillips & Co v Bath Housing Co-operative Ltd[2012] EWCA Civ 1591, [2013] 1 WLR 1479, a solicitor’s client had protested about the amount of the solicitor’s fees, but had not denied that some fees were due. This was held to be an acknowledgment for the purposes of section 29(5). What would reasonably be understood by the claimant as the recipient of the defendant’s 1st November 2018 email?[48]Accordingly the question in the present case is, what would reasonably be understood by the claimant, viewing the matter objectively, as the recipient of the defendant’s 1st November 2018 email?[49]Three points are immediately obvious, and would have been obvious to the reasonable recipient of the defendant’s email. First, the defendant was plainly acknowledging some liability. The words ‘towards the amount due’ cannot bear any other meaning. There was some suggestion that the email may have referred to the non-binding agreement in principle between Mr Al Othman and Mr Al Rajhi (see para 10 above). But that would not make sense. If the verbal agreement was understood to be non-binding, it could not have given rise to any ‘amount due’.[50]Second, there was no contract between the parties for the sale of the claimant’s shares. So the liability being acknowledged cannot have been a liability under a contract of sale.[51]Third, the context was the claimant’s entitlement to the pending distribution. What the claimant was saying in its email of 29th October 2018 was that because of a previous transaction between the parties, it did not have any right to receive this distribution, but that it should have received a payment for giving up this right (‘we already sold our shares ... but we did not get our funds yet’). That was the ‘amount due’ to which the defendant’s email referred.[52]Accordingly it was clear, and would reasonably have been understood by the claimant as the recipient of the 1st November email, that ‘the amount due’ which the defendant was acknowledging was the amount due under the transaction by which the claimant had given up its right to receive the distribution. That was the Loan Agreement. There is nothing else which it could have been as the defendant had no other liability. Extraneous evidence was admissible to show that the only possible relevant transaction was the Loan Agreement.[53]That is sufficient for the defendant’s email to be an acknowledgment within section 29(5). The judge’s reasoning[54]The judge’s first reason for reaching a different conclusion was that neither Mr Mattar nor Mr Al Rajhi was aware of the signed Loan Agreement in 2018. But the claimant did not know this and in any event the subjective understanding of these individuals is irrelevant. What matters is how the email would reasonably (and objectively) have been understood by somebody in the position of the claimant, with the corporate knowledge which the claimant had. Such a person would reasonably have understood that a message acknowledging a liability from the Deputy CEO of the defendant, which expressly stated that it was based on an understanding derived from Mr Al Rajhi, the defendant’s principal, was indeed intended to acknowledge that liability. They would also have understood that the liability being acknowledged was that which arose as a result of the transaction by which the claimant gave up its right to receive distributions from the company and that there was no other possible candidate.[55]The judge’s second reason was that the email referred to a sale and not a loan. But as I have explained, the reasonable recipient would have known that there had been no sale, and therefore that ‘the amount due’ must refer to something else. Again, there was only one possibility, i.e. the Loan Agreement, which for all practical purposes was economically equivalent to a sale of the shares and had originated in the claimant’s wish that the defendant should buy its shares.[56]The judge’s third reason is that Mr Rizk, the recipient of the defendant’s email, was not aware of the Loan Agreement. But his subjective and individual understanding is not what mattered.[57]Finally, the judge placed weight on the fact that Mr Rizk never subsequently clarified to Mr Mattar that he was in fact referring to a loan transaction. But what did or did not happen after the defendant’s email of 1st November 2018 cannot affect the question whether it was an acknowledgment of the claimant’s claim. Either it was or it was not. In my judgment it was.[58]In those circumstances I do not accept the judge’s view that ‘it is not good enough ... that both parties had in mind an agreement whereby Al Othman could achieve an economic exit’ (para 155). That is indeed what they had in mind; there was only one such agreement; and evidence was admissible to identify that agreement and the amount due under it.[59]Kleinwort Benson does not suggest any contrary conclusion. It was a case where part payments were made in the belief that these were due under an interest rate swap. It was not a case of an express acknowledgment. Although acknowledgments and part payments are dealt with in the same subsection, Ashcroft v Bradford & Bingley explains the freestanding nature of the regime so far as part payments are concerned. In such cases, what matters is whether the payments are made ‘in respect of’ the right of action being sued on. That depends on the actions and intentions of the debtor, considered objectively, at the time of the payment. In Kleinwort Benson the payments could only have been made ‘in respect of’ what both parties understood to be the liability under the interest swaps. That was the only liability of which the parties were then aware. Neither party was aware, or should reasonably have been aware, that those swaps were void, as was subsequently held; or that there was an entirely separate restitutionary liability. Accordingly the payments could not have been made ‘in respect of’ that separate liability. That was the context in which Mr Justice Hobhouse held that it was necessary to have regard to the actual position as understood by the parties at the time of the part payment and not to an analysis which the law later placed on that part payment, of which the parties were at the material time unaware.

Conclusion

[60]For these reasons I would allow the appeal. It follows that I would enter judgment for the claimant for US $5 million less whatever sums have been received by the claimant by way of distribution or on the disposal of the shares or the liquidation of the company. I understand that the figure has been agreed between the parties, but if not, the case will have to be remitted to the judge for the figure to be determined. LORD JUSTICE PHILLIPS:[61]I agree.

LORD JUSTICE LEWISON:

[62]I also agree.