Monday, October 16, 2017

Enforcement of Foreign Judgments in Oman

It is not uncommon for disputes emanating from commercial transactions to have cross-border effect. Quite often parties to a transaction are located in different jurisdictions. It is also not uncommon for commercial agreements to grant jurisdiction to the courts of a place where one or more of the parties are not domiciled or located. This may be for a variety of reasons. It is hence extremely important for a party having a foreign judgment in its favour (“Judgment Creditor”) to fully appreciate its ability to enforce that foreign judgment in another jurisdiction against the judgment debtor.

The enforcement of foreign judgments in Oman is governed under provisions of the Civil and Commercial Procedures Law issued pursuant to Royal Decree 29/2002 (as amended) (the “Civil Procedures Law”). Generally, while foreign arbitral awards can be readily enforced in Oman under the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1954, commonly referred to as the New York Convention, the same is not the case with judicial decisions.

Foreign judgments are, in theory, enforceable in Oman. It is possible to seek ready enforcement of foreign judgments in Oman, in particular under (a) the 1983 Convention on Judicial Co-operation between States of the Arab League (the “Riyadh Convention”), and (b) the 1995 Protocol on the Enforcement of Judgments Letters Rogatory, and Judicial Notices issued by the Courts of the Member States of the Arab Gulf Co-operation Council (the “GCC Protocol”). Both the Riyadh Convention and the GCC Protocol provide that each member state will recognise the judgments of the courts of any other member state, subject to fulfillment of prescribed conditions, that had proper jurisdiction over the case and where the judgment had been finally adjudged.

A judgment issued by a special court of a member state to either the Riyadh Convention or the GCC Protocol, such as the Dubai International Financial Centre Courts in the United Arab Emirates, is treated as a domestic member state judgment. Hence, that judgment would also be enforceable in Oman under the relevant treaty.

The enforcement of foreign judgments of countries that do not have mutual enforcement arrangements with Oman are subject to a judgment to be issued in compliance with the usual procedures followed in suits before the Primary Court. To enforce a foreign judgment in Oman, the Judgment Creditor is required to approach the competent Primary Court. Before enforcing that foreign judgment, the Omani courts will satisfy themselves that the conditions set out in Article 352 of the Civil Procedures Law have been met. Article 352 sets out the requirements for enforcement of foreign judgments, a translation of which is as follows:

(a) that the judgment or the order is issued by a competent judicial body pursuant to the principles of international rules of judicial competence determined by the domestic law of the country in which it was delivered and has become final according to that law and was not delivered on basis of deception;

(b) that the litigant parties to the case in which the foreign judgment was delivered had been rightfully notified and represented;

(c) that the judgment or order does not contain a request which breach an operative law in the Sultanate;

(d) that the judgment or order does not contradict a previous judgment or order delivered by a Court in the Sultanate, and does not contain something against public order or decency; and

(e) that the country in which the foreign judgment was delivered accepts the enforcement of judgments delivered by Oman Courts within its own territories.

At times, a Judgment Creditor seeking to enforce a foreign judgment in Oman may not be able to satisfy all the requirements prescribed by Article 352 of the Civil Procedures Law. However, should a foreign judgment not be enforceable pursuant to the above rules, then it is possible that such a judgment would nevertheless be of evidentiary value and the matter may be litigated de novo in Oman in a full hearing before the competent Omani court.

Arabic is the official language of Oman. In case a foreign judgment that is sought to be enforced in Oman by a Judgment Creditor has been issued in a language other than Arabic, the judgment together with all other documents should be translated into Arabic.

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Monday, October 9, 2017

What's New in the 2017 FIDIC White Book?

In March 2017 the Fédération Internationale des Ingénieurs Conseils (“FIDIC”) issued the Fifth Edition of the White Book, or the Client/Consultant Model Services Agreement to give it its full name. The White Book forms part of the FIDIC suite of documents and is one of the most commonly used professional services agreements in the world.

The Fifth Edition contains some major amendments to the Fourth Edition, which was published in 2006. We consider below some of the more important changes introduced by the latest update.

Form of agreement 
The Fifth Edition introduces an order of precedence to the documents listed as forming and to be construed as part of the agreement, both under the Form of Agreement and in the General Conditions.

By omitting to do so, the Fourth Edition was unclear as to which document’s terms would take precedence in the event that provisions in one document contradicted those in any of the others. 

Standard of care 
The enhanced standard of care set out in clause 3.3.1 now conforms more closely with wording typically found in client-bespoke agreements. The new wording provides that the consultant must exercise the “reasonable skill, care and diligence to be expected from a consultant experienced in the provision of such services for projects of similar size, nature and complexity.”

Further, the consultant must “perform the services with a view to satisfying any function and purpose that may be described in Appendix 1 (Scope of services).” The above wording stops short of introducing a “fit for purpose” clause, though in Oman the absence of such wording will not affect the consultant’s statutory decennial liability for the collapse of a building.

The Fifth Edition makes clear that the standard of reasonable skill, care and diligence only applies to the performance of the services. Under the Fourth Edition, the consultant had “no other responsibility than to exercise reasonable skill, care and diligence” in the performance of all its obligations in the agreement, including commencement, completion dates, procurement and maintenance of insurance, and any reporting. In the Fifth Edition these are now treated as absolute obligations.

Intellectual property rights 
The new edition distinguishes between background intellectual property (intellectual property owned by either party prior to the commencement of the services) and foreground intellectual property (intellectual property created by the consultant during the performance of the services). Foreground intellectual property remains the property of the consultant, but the client will have a licence to use it for any purpose connected to the project. The licence is broad, however, and would allow the client to use the foreground intellectual property in any future extensions of the project.

Dispute resolution 
The dispute resolution provisions now include adjudication as part of a multitiered dispute resolution process. If a dispute cannot be resolved amicably, it must first be referred to adjudication before any arbitration proceedings can be commenced.

In Oman, it is likely that these provisions will be amended so as to refer any dispute straight to arbitration.

Good faith 
The Fifth Edition introduces a broad good faith obligation (applying to “all dealings”) which has the potential to be at issue in almost any dispute. The governing law and jurisdiction of the contract will have a significant bearing on the extent of this “good faith” obligation.

Good faith under Omani contract law can be interpreted as a requirement to act reasonably and moderately, not to use the terms of a contract to abuse the rights of the other contracting party, and not to cause unjustified damage to the other party.

In Omani law an act of bad faith by one party may constitute a cause of action for the other party to the contract. Accordingly, the duty of good faith is overarching, in contrast with the position at English law. Under English law the extent of the obligation depends on the context and how explicitly it is defined. However, it is clear that the English courts are reluctant to construe a good faith obligation as imposing a positive obligation on a party to act against its commercial interest, or to give precedence to such an obligation over an express contractual right.

Liabilities 
In the new edition, default must be not only “deliberate,” as was the case in the Fourth Edition, but also “manifest and reckless” in order for the exclusion of the cap on liability to apply.

The Fifth Edition also provides for the mutual exclusion of liability for a number of heads of loss or claim. This is favourable for the consultant, as in many jurisdictions, without express wording excluding liability for loss of profit, etc.; the consultant would be liable insofar as these constituted “direct losses.”

Programmes 
The Fifth Edition sets out more detailed requirements as to what programmes should contain. There are also more detailed provisions obligating the consultant to provide a programme within 14 days of the commencement date; specifying which information the programmes should include; and obligating the consultant to revise the programme if the client does not reasonably believe the project will be completed on time.

Variations 
The new edition expands on: the circumstances which could constitute a variation; the procedure for initiating variations and agreeing on their impact on the programme; and the consultant’s remuneration.

Termination 
The Fifth Edition now explicitly provides that the client is not entitled to terminate for convenience in order to carry out the services itself or through a third party. In the Fourth Edition, this was not expressly stated.

The Fifth Edition now allows for immediate termination where there is corruption or insolvency. It also permits the client, with 28 days’ notice, to suspend the services for convenience.

There are more extensive rights of suspension, including an express right for the consultant to suspend if the client fails to demonstrate that it has made satisfactory arrangements to meet its payment obligations.

Summary 
The allocation of risk between the parties under the new edition of the White Book appears to remain broadly similar to that set out in the previous Fourth Edition. However, the Fifth Edition has gone a long way to remedying many of the shortcomings of the Fourth Edition.

 As a result of the changes, the parties should now be better able to understand and manage their risk allocation.

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Monday, October 2, 2017

Oman Becomes Fourth GCC Member State to Implement the Unified GCC Trademarks Law

Oman has recently become the fourth Gulf Cooperation Council (“GCC”) state to implement the Law of Trademarks for the GCC States (“GCC Trademarks Law”). Royal Decree 33/2017 was issued in Oman on 25 July 2017 with immediate effect. However, the nuances of how this new law will be implemented in Oman remain to be seen, as the implementing regulations have yet to be published.

The GCC Trademarks Law was approved by the GCC Trade Cooperation Committee in 1987, with further amendments made in 2006 and 2013. However, the Trademark Law only came into force upon the issuance of the Implementing Regulations in December 2015. Since then, Saudi Arabia, Bahrain, Kuwait and now Oman have fully adopted the GCC Trademarks Law to replace their respective national trademark laws.

Although Oman has not yet published the implementing regulations, the GCC Trademarks Law itself provides an instructive preview of the main features of the law.

Under the GCC Trademarks Law, once a party submits an application for a trademark the examination much be completed within ninety days of filing. Any requests for further information from the relevant Trademarks Office must be met with a response also within ninety days. The GCC Trademarks Law provides a period of sixty days for parties to oppose published trademark applications; note that currently the opposition period in Oman is ninety days. Applicants must respond to oppositions within sixty days of notification, or risk their applications being considered abandoned.

Following the applicant’s response is a hearing session, after which the Trademarks Office issues its decision within ninety days. Appeals to the Trademarks Office’s decision rejecting an application shall be filed within sixty days to the Objections Committee. The decisions of the Objections Committee are also subject to appeal to the competent court within sixty days. This is a shift from the previous Omani law, which provides that decisions in opposition were appealable to a Trademarks Office within the relevant Ministry, with a further opportunity to appeal to the competent court afterwards.

In the determination of well-known trademarks, the GCC Trademarks Law provides criteria similar to those provided by the World Intellectual Property Organization (“WIPO”). For a mark to be declared as well-known, the GCC Trademarks Law requires that the mark be widely recognisable by consumers due to the marketing efforts of the trademark owner; that the mark be registered and used widely across countries; and/or that the mark be widely valued or useful in promoting the products or services to which it is applied.

Along with an increase in application fees, an increase in penalties for trademark infringement will be seen in Oman. According to the GCC Trademarks Law, the penalties that apply “where a person counterfeits a registered trademark in a manner which misleads the public [or] in bad faith uses a counterfeit trademark and who affixes this mark to its products” include a fine between OMR 500 (USD 1,300) and OMR 100,000 (USD 260,000) and/or imprisonment for up to three years. Where a person “knowingly sells goods which contain a counterfeit or unlawfully affixed trademark,” a fine of between OMR 100 (USD 260) and OMR 10,000 (USD 26,000) and/or imprisonment for up to one year are applicable.

Although Oman has yet to publish the implementing regulations of the GCC Trademarks Law, it is clear that the adoption of a unified trademarks law is a beneficial development. Rights holders will take comfort in claiming similar levels of protection throughout the GCC, and new applicants and businesses will be attracted by the ease of a single set of provisions for the registration and enforcement of their trademark rights.

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