A recent Supreme Court of Nigeria ruling, delivered on December 12, 2025, by Honourable Abubakar Sadiq Umar, JSC, has clarified how an acknowledgment of debt can revive a right of action under the country’s statute of limitations. The case, Petroleum Products Marketing Co. Ltd v Masters Maritime Limited, centered on a debt dispute dating back to 1997, involving the supply of petroleum products for the operation and maintenance of the respondent’s ships at various seaports.
The appellant, a petroleum products distributor, sued the respondent, a buyer, for USD 1,013,678.80 in unpaid invoices. The respondent initially acknowledged the debt in a letter, leading the appellant to withdraw its lawsuit. However, when the respondent failed to pay, the appellant filed a new suit in 2005, claiming the principal sum, 25% interest from December 1, 1997, until judgment, and 10% post-judgment interest.
Jurisdiction Challenges and Limitation Period
The respondent challenged the High Court of Lagos State’s jurisdiction, arguing the case was an admiralty matter and involved a federal agency. The court dismissed the suit on the latter ground, holding that the matter was not admiralty-related but concerned money had and received. On appeal, the respondent raised a statute of limitations defense, claiming the six-year limitation period had expired under Section 7 of the Limitation Act of 1966.
The Court of Appeal agreed, ruling the suit statute-barred. The Supreme Court formulated a sole issue: whether the Court of Appeal was right in holding the claim statute-barred.
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Supreme Court’s Ruling on Acknowledgment of Debt
The Supreme Court held that an acknowledgment of debt made within the limitation period will reset the limitation period, relying on Section 38(1) of the Limitation Law of Lagos State and its decision in NIGERIA SOCIAL INSURANCE TRUST FUND MANAGEMENT BOARD v KLIFCO NIGERIA LTD. The acknowledgment must be signed by the debtor, addressed to the creditor, and unequivocally admit liability. The court found the respondent’s letter met these criteria, but did not specify a new deadline.
Legal Principles and Conditions for Acknowledgment
The acknowledgment must be in writing, addressed to the creditor, and signed by the debtor or their authorized representative. It must also unequivocally admit liability, though it need not specify the exact amount owed. The court referenced TEXACO INC. v SHELL P.D.C.N. Ltd. and CIL RISK & ASSET MANAGEMENT LTD. v EKITI STATE GOVERNMENT to show the principles of limitation statutes and the accrual of causes of action.
Application of Limitation Law and Conclusion
The limitation period for recovery of debt arising from breach of contract is codified under Section 8(1) of the Limitation Law of Lagos State, which provides that any action founded on a simple contract must be brought to court within six years from the date the cause of action arose. The Supreme Court held that the Respondent’s letter of 29th November, 2000 reset the limitation period, which began counting afresh from that date.
