Two Saudi businessmen, who were once childhood friends, have been urged by a judge in the UK to resolve their differences in a $5 million dispute.
Abdullah Al Othman fell out with Khalid Al Rajhi after they jointly invested in a company in 2008, which turned out to be unsuccessful.
Mr Al Othman ended up suing Mr Al Rajhi in 2023 at the High Court in London, in a case conducted through their businesses, but a judge has now ruled against him.
In her judgment, Mrs Justice Julia Dias said Mr Al Othman had been a “close personal friend” of Mr Al Rajhi until the court case began.
Mr Al Othman is the vice chairman of the family-owned and run Al Othman Holding Company, which is based in Saudi Arabia, although he has lived in Sydney since 2000.
Mr Al Rajhi is the executive chairman of the Al Rajhi Group, which is also family run and based in Saudi Arabia. He is also the chief executive of Al Rajhi Holding WLL, a subsidiary of one of Al Rajhi Group's two holding companies, which was the defendant.
“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,” said Mrs Justice Dias.
Concluding her ruling, she expressed her sadness that the two men had ended up in a dispute and urged them to settle their differences.
“It is always sad to see old friends fall out to the extent that they feel they have to embark on expensive and uncertain litigation.
“I therefore profoundly hope that Mr Al Othman and Mr Al Rajhi may be able to put their differences behind them and resume at least some semblance of their former relationship which I am sure will be of much greater benefit to their respective families than continued recriminations and bitterness.”
The origins of the dispute began when Mr Al Othman invested $5.7 million for a 10 per cent stake in Nutech Energy Alliance. By 2013 he wanted to sell his shares, though Mr Al Rajhi was initially reluctant for this happen.
The pair eventually agreed an arrangement whereby Mr Al Rajhi would lend Mr Al Othman $5 million, which would be repaid from any future share dividends or the sale of the company.
An agreement for the interest-free loan was drafted Mr Al Rajhi’s lawyers and was signed by a senior executive of his company, Yaser Alsharifi, and Mr Al Othman’s brother, Abdulmohsen Al Othman.
But the agreement was never signed off by Mr Al Rajhi’s company and in the following years Mr Othman “raised the matter repeatedly … in person whenever he saw him”.
“He did not press hard as Mr Al Rajhi was a trusted friend, so he did it in a polite and friendly way and at high level,” said the judgment.
But as matters dragged “he had got frustrated with having continually to press an old friend for payment” and by 2023 he finally “lost patience” and started legal action.
Mr Al Rajhi’s company didn’t dispute that there was an agreement in principle.
But it successfully argued Mr Alsharifi had no authority to sign the agreement without the approval of either the Al Rajhi Family Council and Group Board, or both, and as such the document wasn’t binding.
Mrs Justice Dias also agreed with their argument that the case was time barred and any legal action needed to have been brought before November 2020.
