Monday, October 31, 2016

Implications of Narrowing the Scope of Sovereign Immunity Imposed by the Justice Against Sponsors of Terrorism Act

The Justice Against Sponsors of Terrorism Act (“JASTA” or “Act”) was passed by Congress on 28
September 2016 and according to Act, was implemented to permit persons and entities injured as a
result of terrorist attacks committed in the United States (“US”) to pursue civil claims against
foreign countries.  President Obama had earlier vetoed the Act which, for the first time in his
administration, Congress has overridden.

Before the implementation of JASTA, it was not permissible for a US national to pursue civil claims
of this nature against a foreign state on the basis of sovereign immunity.  JASTA amends the
federal judicial code (the “United States Code”) in order to narrow the scope of foreign sovereign
immunity from the jurisdiction of US courts.  The resulting effect of JASTA may open the gate for
US nationals to seek compensation from foreign states for injuries sustained as a result of acts of
international terrorism where a foreign state or any of its officials, employees or agents has also
engaged in a tortious act or acts in connection therewith.

As JASTA legislation pertains to civil actions “arising out of an injury to a person, property or 
business on or after September 11, 2001” 1, it is widely recognised that JASTA was implemented as a result of the 9/11 terrorist acts committed in the US.  Although the Saudi Arabian government
strenuously denies ever having supported the terrorists of 9/11, it is expected that Saudi Arabia
will be affected by the Act, given that fifteen of the nineteen 9/11 terrorists were Saudi Arabian

What is the Purpose of JASTA?

As mentioned above, JASTA seeks to allow all persons and entities injured as a result of terrorist
activities the recourse to civil claims against those responsible for inflicting injuries to such
persons or entities.

Specifically, JASTA’s stated purpose is to provide civil litigants with the “broadest possible 
basis … to seek relief against persons, entities and foreign countries … that have provided 
material support or resources, directly or indirectly, to foreign organisations or persons that 
engage in terrorist activities against the [US].”2

In enacting JASTA, Congress found, among other things, that “persons, entities or countries that
knowingly or recklessly contribute material support or resources, directly or indirectly, to
persons or organisations that pose a significant risk of committing acts of terrorism that threaten
the security of nationals of the United States or the national security, foreign policy, or economy
of the United States, necessarily direct their conduct at the United States, and should reasonably anticipate being
brought to court in the United States to answer for such activities” (emphasis added)3.

What is the Scope of JASTA?

Sovereign Immunity

The concept of sovereign immunity prevents a state from having a civil action being brought against
it (by individuals and states), subject to certain exceptions, without its consent.   JASTA,
however, has narrowed the scope of sovereign immunity with respect to acts of international
terrorism by asserting as follows:

“… a foreign state shall not be immune from the jurisdiction of the courts of the [US] in any case  
… for physical injury to person or property or death occurring in the [US] and caused by

(1)        an act of international terrorism in the [US]; and

(2)        a tortious act or acts of the foreign states, or of any official, employee, or agent of 
that foreign state while acting within the scope of his or her office, employment or agency, 
regardless where the tortious act or acts of the foreign state occurred.”4

The resulting impact of the provisions in (1) and (2) above means that if an act of international
terrorism occurs on US soil (by a national of a foreign state) irrespective of whether the person
acting on behalf of the foreign state is outside of the US, the sovereign immunity previously
applicable to that foreign state may no longer apply. Put simply, a civil litigant may pursue a
civil action in the US courts against the foreign state.

JASTA makes clear that reference to “international terrorism” has the same definition as in the
United States Code, meaning violent acts that are dangerous to human life and are a violation of
the criminal laws of the US or any State, and that would constitute a criminal violation if
committed in the US. Further, the terrorist act must be intended to intimidate or coerce civilians,
influence government policy, or affect a government’s conduct by mass destruction, assassination or
kidnapping and occurs primarily outside of the US.5

The Act further clarifies that a foreign state will still retain its sovereign immunity if an
omission or a tortious act “constitutes mere negligence”6.   Therefore, any omission or tortious
act committed by a foreign  state  or  an  official,  employee  or  agent  of  such  foreign  state  must constitute more  than negligence in order for the foreign state to lose its immunity protection under JASTA.

Aiding and Abetting

In addition to lifting the doctrine of sovereign immunity, JASTA also provides secondary liability,
asserting that “… any person who aids and abets by knowingly providing substantial assistance, or 
who conspires with the person who committed such an act of international terrorism.”7   This
secondary liability is only applicable however to international terrorism that is planned or
authorised by an organisation that has been designated as a foreign terrorist organisation as
provided by the Immigration and Nationality Act.   A foreign terrorist organisation is categorised
as a foreign organisation that “… engages in terrorist activity or terrorism (… or retains the  capability and intent to engage in terrorist activity or terrorism); and … the organisation 
threatens the security of US nationals or the national security of the US.”8 Contrary to the above section regarding sovereign immunity, “person” for purposes of this Section  of JASTA is broadly defined and includes natural persons.

When did JASTA come into effect?

The amendments made to the United States Code by JASTA are applicable to any civil action pending on, or commenced on or after, the date of enactment of JASTA; and arising out of an injury to a person, property, or business on or after 11 September, 2001.

Stay of Actions Pending State Negotiations

Notwithstanding its narrowing effects on sovereign immunity, JASTA does permit the US Attorney
General to intervene in any action in which a foreign state is subject to the jurisdiction of a US
court for the purpose of seeking a stay of the civil action. The court may stay a proceeding
against a foreign state if US Secretary of State “certifies that the United States is engaged in 
good faith discussions with the foreign state defendant concerning the resolution of the claims 
against the foreign state, or any other parties as to whom a stay of claims is sought.”9  A
stay brought under JASTA may be granted for no longer than 180 days; however the Attorney General may petition the court for an extension of the stay for additional 180-day periods, provided that a recertification is given by the US Secretary of State as to the state of negotiations with the
foreign state.

Potential Implications of JASTA

Proponents of JASTA argue that it is justified on the basis that governments should be able to be
held accountable where their people commit acts of international terrorism and the government
committed a tortious act or acts in connection with such acts.

Critics of JASTA, including President Obama’s administration and the Central Intelligence Agency
(“CIA”), argue that JASTA will have severe implications for the national security of the United
States, so much so, that CIA Director John O. Brennan has recently stated that “any legislation 
that affects sovereign immunity should take into account the associated risks to our national 
security.”10    This viewpoint is based on the fact that sovereign immunity is a reciprocal
arrangement, with the concern being that it could make the US exposed to similar litigation in
foreign courts that could affect US officials working overseas if other states impose retaliatory
legislation. In addition, critics also argue that JASTA could significantly weaken the relationship
the US has with other states, such as Saudi Arabia which, as mentioned above, is one foreign state
that could largely be impacted by JASTA.

Despite being passed by Congress with 97 – 1 in favour in the Senate and 348 – 77 in favour in the
House, following the severe criticism of the Act, there has been speculation that legislators may
seek to revisit and modify JASTA after the US Presidential elections in November 2016.  However, it is not yet clear to what extent legislators shall seek to modify the Act, or indeed whether the
narrowing in scope of sovereign immunity shall be amended.

1 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §7.
2 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §2(b).
3 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §2(a)(6).
4 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §3 to be codified
at 28 U.S.C. §1605B.
5 18 U.S.C. §2331.
6 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §3.
7 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §4 to be codified
at 18 U.S.C. §2333.
8 8 U.S.C. §1189.
9 S.2040 - Justice Against Sponsors of Terrorism Act, 114th Congress (2015-2016), §5(c)(1).
10 Statement from Director Brennan on JASTA, available at:


Wednesday, October 19, 2016

Dispute Avoidance Processes in Oman - Friend or Foe

The costs associated with construction litigation are often disproportionate to the quantum in dispute due to their complex and technical nature, and the proliferation of associated documentation. Arbitration costs (often promoted as a less expensive and more expedient process as compared to the court process) often rival the costs associated with a court-adjudicated process.   Rarely does either party exit a litigious process unscathed.  A more collaborative philosophy of contracting and dispute resolution  may  be  helpful  in  this  region  to  effectively  resolve  construction  disputes  early  on, particularly if the relationship of the parties is ongoing and one that requires preservation.    Dispute review boards (“DRBs”) and dispute adjudication boards (“DABs”) are two dispute adjudication processes that have been effective in other jurisdictions at reducing the time and costs associated with resolving construction disputes.

What are DRBs and DABs?

DABs are designed to provide decisions in relation to matters arising between contracting parties throughout a project, and the parties are generally bound by these decisions if provided for by contract. However,  where  non-binding  recommendations  are  provided,  and  the  DAB  acts  in  an  advisory capacity, the DAB would generally be referred to as a DRB.  DRBs have the dual purpose of assisting the parties to avoid disputes and also resolving disputes, ensuring, as far as possible, that disputes do not escalate to a more adversarial and hostile forum.  DRBs and DABs are implemented at the outset of a project, rather than at the time of the dispute such as with an arbitration process.   The DRB has intimate knowledge of the project at all stages, attends site and meetings every few months and produces reports on an ongoing basis to the parties.  The board in each case is generally comprised of an engineer selected by each party and a third engineer, generally with dispute resolution and contractual interpretation experience selected by agreement of each party’s engineer.


DABs and DRBs have gained popularity in many jurisdictions over the years.  DABs are provided for in each of the FIDIC Red, Yellow, Silver and Gold Books and the International Chamber of Commerce (“ICC”) has released its own dispute board procedure in October 2014.     However, despite the significant success of dispute boards elsewhere in the world, neither DABs nor DRBs are popular in Oman.

Forms of dispute resolution in Oman have, to date, been primarily restricted to mediation and, more often, arbitration.  This, in part, is due to the prevalent use of the Oman Government Standard Form Construction Contracts that are based on a modified form of the standard forms of contract issued by FIDIC.  As standard, in the Oman Government Standard Form Construction Contract, provisions relating to resolution of disputes via arbitration are retained, and the clauses relating to DRBs/DABs are omitted.  It is normally not possible to amend these Standard Form Contracts.

Dispute adjudication processes

Currently, courts in Oman and across the Middle East are reluctant to enforce DAB or DRB decisions, particularly where an arbitration clause  is also in the contract  or  at  all.   Arbitrators are  likewise reluctant, or without jurisdiction, to enforce the decisions of a dispute board without hearing the issues in dispute afresh.  Additionally, during a DRB or DAB process, matters are not discussed on a “without prejudice” basis and information disclosed can be used if the matter proceeds to an arbitration or court- adjudicated process.  The absence of recognition of “without prejudice” negotiations is a major reason methods of alternative dispute resolution such as mediation or dispute boards are not used in the region.  Further, a contractually agreed confidentiality agreement does not afford reliable protection. The Oman courts may allow any evidence to be presented which sheds light on the matters before it. Further, and most importantly, dispute board decisions are not likely to be enforced by the courts in Oman.

Other jurisdictions have introduced a statutory framework to support the implementation of effective alternative dispute resolution methods, rather than simply a contractually agreed framework.  Such frameworks were introduced in the UK in 1996, followed by Australia in 1999, New Zealand in 2002 and Singapore in 2004 and have enabled alternative dispute resolution (particularly DABs and DRBs) to be a legitimate and enforceable means to resolve construction disputes.


It is advisable to seek legal advice before considering whether to contractually implement a dispute board to resolve contractual disputes at any stage of the dispute process.  There are considerable merits in that high-quality opinions from a DRB or DAB may provide the deep understanding and rational compass  for  construction  projects  necessary  to  keep  litigation  at  bay.  However,  the  lack  of enforceability of dispute board decisions continues to greatly detract from their usefulness in Oman.  If a statutory framework is developed in Oman such that dispute board decisions can be enforced, DRBs and DABs may become an attractive alternative to arbitration.


Wednesday, October 12, 2016

Oman's New Engineering Consultancy Law

The  May  edition  of  the  Client  Alert  contained  a  comprehensive  discussion  on  the  procedural formalities that must be met in order to establish an Engineering Consultancy firm under the new Engineering Consultancy Law, entitled “Issuing the Law Regulating the Work of Engineering Consultancy Offices” (“Engineering Consultancy Law”) (Royal Decree 27/2016).  The primary focus of this  article  is  to  identify  key  features  that  have  been  introduced  by  the  legislature  in  the  new Engineering Consultancy Law.

Engineering consultants play a vital role in administering large-scale infrastructure projects.  Broadly speaking, the engineering consultant is responsible for providing both technical and administrative support needed to ensure that a construction project runs smoothly.

The scope of an engineering consultant’s responsibilities may be classified into two distinct categories, namely as a project’s administrative manager and as a project’s technical expert:

a)   Administrative manager:  In its capacity as administrative manager, the engineering consultant’s responsibility may include administering the tendering process, managing contractors and sub- contractors on behalf of a project owner, as well as reviewing and approving contractor’s variation requests.   In some instances, engineering consultants may also be tasked with reviewing any potential disputes that arise between contracting parties.

b)  Technical expert:  Engineering consultants are often called upon to provide technical, engineering and/or quantum expertise on a specific project.   In this regard, the scope of an engineering consultant’s responsibilities may include conducting and interpreting feasibility studies, such as soil and/or rock investigation, producing the detailed project design, and resolving any potential design related issues that may arise.

In light of the number of large-scale construction projects in Oman, engineering consultants, perhaps unbeknownst,   play   a   pivotal   role   in   the   Sultanate’s   long-term   economic   and   infrastructural development plans.  It is in this context that the Omani legislature considered it necessary to appraise and, ultimately, to modernize the Engineering Consultancy Law in Oman.

The new Engineering Consultancy Law – Royal Decree 27/2016

Until very recently, the primary legislation which regulated Engineering Consultancy profession was the Engineering Consultancy Law of 1994, promulgated by Royal Decree 120/1994 (“Previous Law”). However, on 22 May 2016, the Omani legislature issued a new, and more comprehensive, Engineering Consultancy Law, under Royal Decree 27/2016.   The Engineering Consultancy Law replaces the Previous Law, and thus provides a new and comprehensive framework to regulate the engineering consultancy profession.
The Engineering Consultancy Law in many ways resembles the Previous Law.   However, there are many new and noteworthy features in the new law, some of which we discuss below:

Credentials necessary to register an Engineering Consultancy Office

Significantly, Article 7 of the Engineering Consultancy Law has raised an applicant’s credentials required to establish an engineering consultancy office.

The legislature now draws an important distinction between an “Engineering Office” and an “Engineering ‘Consultancy’ Office” under the aforesaid Article 7.  In order to qualify to open an Engineering Consultancy Office, an applicant must first have a registered Engineering Office.  The applicant must also meet one of the following criteria: (i) gained a minimum of five years of specialized work experience after having obtained a BSC (Bachelors); (ii) gained three years of specialized work experience after having obtained an MSC (Masters); or (iii) gained two years of specialized work experience after having obtained a PhD in the same area of specialization.

However, as mentioned above, an applicant for an Engineering Consultancy Office must first have an established Engineering Office.  In order to establish an Engineering Office, Article 7 provides that the applicant must have either: (i) obtained at minimum three years of specialized work experience after having obtained a BSC (Bachelors); or (ii) gained one year of specialized work experience after having obtained a PhD in the same area of specialization.

The qualifications set out above are more stringent than what was provided under the Previous Law. Under Article 3(c) of the Previous Law, an applicant only needed to have either: (i) gained five years of specialized  work  experience;  (ii)  gained  three  years  of  specialized  work  experience  after  having obtained a BSC (Bachelors); or (iii) obtained a PhD in order to open an Engineering Consultancy Office.

Chapter 3 – “Working Engineer”

The Engineering Consultancy Law has introduced new provisions intended to elevate professional engineering standards under Chapter 3, Working Engineer.   For example, Article 17 restricts the right to sign off on key documents, including schemes, graphics, designs, specifications, project report samples, and supervision bonds, to only the licensee, and to engineers who: (i) are registered as authorized signatories with the MOCI; (ii) have met the requirements to obtain the professional degree from the authority; and (iii) work exclusively for the specific office.

Chapter 5 – Violations Committee

Chapter  5  of  the  new  Engineering  Consultancy  Law  has  introduced  a  formalized  Violations
Committee, to be chaired by the undersecretary of the MOCI.  Once formed, the Violations Committee will be comprised of four experienced engineers, with two of the four serving as representatives of the Omani Engineer’s Association, each for a five-year term.

The Violations Committee is to serve as a quasi-adjudicatory board, to consider any complaints and/or potential violations of the Engineering Consultancy Law.  The Violations Committee will be authorized to levy one of the following penalties: to issue warnings, to suspend a licence up to one year, or to cancel  a  licence  altogether.    Any  adverse  decisions  issued  by  the  Violations  Committee  may  be appealed to the Minister within 60 days from the date of the Violations Committee’s decision.

Chapter 6 – Penalties

Perhaps most notably, Article 29 of Chapter 6, Penalties, introduces criminal culpability for acts of “gross negligence,” or for having failed to “take necessary precaution which jeopardized the safety of the people or the properties or the environment” by an engineering consultant.  The Previous Law does expressly provide for criminal culpability for any violations of its provisions.

It is reasonable to assume that the legislature has included criminal penalties for gross misconduct, as perpetuation of its firm commitment to protecting those who may be unnecessarily placed in harm’s way due to any compromised or unsafe civil structures.


Wednesday, October 5, 2016

Extending the Period of Arbitral Proceedings in Oman

Arbitration is one of the most popular types of alternative dispute resolution methods used by parties to resolve a dispute, both in the private and public sectors in Oman.  An often-cited reason for selecting arbitration is to reach a final resolution of a dispute in a timely, inexpensive and less formal manner.

Under the Omani Arbitration Law issued by Royal Decree 47/1997 (as amended), Article 4 defines “Arbitration” as the arbitration agreed upon by both parties to the dispute at their own free will, irrespective of whether the body that would be attending to the arbitration proceedings, in accordance with  the  agreement  between  the  parties,  is  an  organization,  a  permanent  arbitration  centre,  or otherwise.

To  ensure  that  disputes  are  resolved  expeditiously,  the  Omani  Arbitration  Law  (Sultani  Decree
47/1997) sets time limits within which an award must be issued.

Per Article 45 of the Omani Arbitration Law, the arbitral tribunal shall have to pass a final award in respect of a dispute within the time period agreed upon by the parties.  Article 45 further says that if the parties fail to agree on the timeframe for adjudicating the dispute, then the award shall be required to be passed within 12 months from the date of commencement of the arbitration proceedings.

Once an arbitrator is appointed, for the purposes of these timeframes, the commencement date of the arbitration proceedings can either be a date agreed between the parties in an arbitration agreement, or a date determined by the arbitral tribunal (in which case it will often be the date of service of notice of arbitration by one party to the other party).

Period of extension under Oman Arbitration Law

If the dispute is not settled by the arbitral tribunal within the initial timeframe described above, Article 45 of the Omani Arbitration Law allows the arbitral tribunal to extend the period of the arbitration proceedings for a further period of six months from the date that the initial arbitration period expired. The arbitral tribunal’s decision for an extension of a further period of six months must be in writing.

However,  parties  to  a  dispute  must  keep  in  mind  that  any  further  extension  of  the  period  for arbitration proceedings beyond the above-referred six months requires consent of the parties as per Article 45 of the Omani Arbitration Law.

Article 45 (2) of the Omani Arbitration Law says that if the arbitration award has not been passed within the period specified above, either party to the arbitration may request the President of the Commercial Court to pass orders prescribing an additional period or have the arbitration proceedings brought to an end. In such a case, either party may file their claims before the competent court.

If the arbitration award is not issued within the initial timeframe plus the six-month extension period, the parties should send written notice to the Arbitrator requesting a further extension of the arbitration period proceedings.  This must occur before the initial arbitration period plus the six-month extension period expires.  In this way, the parties can avoid the premature closure of the proceedings, or an application to the courts.

In summary, the most important points to note are:

  • clearly record the date of commencement of the arbitration proceedings in writing at the start of the arbitration; and
  • both parties should communicate their consent for an extension beyond the initial arbitration period  plus the six-month extension  period  before  expiration  of the extension  period  to the arbitral tribunal.