We have investigated the thermodynamic and local magnetic properties of the Mott insulating system Ag$_{3}$LiRu$_{2}$O$_{6}$ containing Ru$^{4+}$ (4$d$$^{4}$) for novel magnetism. The material crystallizes in a monoclinic $C2/m$ structure with RuO$_{6}$ octahedra forming an edge-shared two-dimensional honeycomb lattice with limited stacking order along the $c$-direction. The large negative Curie-Weiss temperature ($theta_{CW}$ = -57 K) suggests antiferromagnetic interactions among Ru$^{4+}$ ions though magnetic susceptibility and heat capacity show no indication of magnetic long-range order down to 1.8 K and 0.4 K, respectively. $^{7}$Li nuclear magnetic resonance (NMR) shift follows the bulk susceptibility between 120-300 K and levels off below 120 K. Together with a power-law behavior in the temperature dependent spin-lattice relaxation rate between 0.2 and 2 K, it suggest dynamic spin correlations with gapless excitations. Electronic structure calculations suggest an $S = 1$ description of the Ru-moments and the possible importance of further neighbour interactions as also bi-quadratic and ring-exchange terms in determining the magnetic properties. Analysis of our $mu$SR data indicates spin freezing below 5 K but the spins remain on the borderline between static and dynamic magnetism even at 20 mK.
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