Tips For Handling Disputes in Oman

Successful resolution of disputes can require significant investment of money, time and energy. Navigating disputes in Oman can be greatly simplified if a company implements a comprehensive, in-house programme to manage any dispute as it arises.

Disputes in Oman generally require a significant investment of time in preparing documentation, as the Courts give preference to well-organized documentary evidence. Pursuing Court action without adequate preparation may not only delay the procedure, but will also prove expensive and may not help the disputing parties to arrive at a satisfactory resolution. Based on our many years of advising and representing companies from multiple industry sectors, we set out below the key suggestions for the successful management of disputes.

Designate one person as the ‘disputes manager’

In order to efficiently manage a dispute, we recommend that companies designate one person within the company to manage the dispute. The individual should be familiar with the facts of the dispute, but it is advantageous if the person was not directly involved in the dispute. By delegating all responsibilities to one individual, that person will be able to efficiently carry out the necessary tasks, including fact gathering, evidence and document retention, and liaising with outside counsel.

Document retention

In Oman, heavy emphasis is placed on a party proving its case by way of documentary evidence. Therefore, a contracting party should carefully consider what documentation it should retain in order to prove its case should a dispute arise in the future.

It is of utmost importance that a company retains all contract documentation, relevant correspondence, and any information which can potentially be used as evidence. Relevant documentation will vary based on the particular contract and surrounding circumstances; however as a general rule, all correspondence, including text messages, minutes of meetings, site notebooks, delivery vouchers, emails, and documents exchanged in relation to the dispute should be retained. Further, if the dispute relates to some physical object, i.e., construction site or sale of goods, it is useful to obtain photographs of the subject matter as documentary evidence as soon as practicable.

Integrity of evidence

Procedural rules of discovery and document production are not as routinely followed as in many common law jurisdictions, such as the United Kingdom and the United States. If you suspect that a key piece of evidence has been removed or, for example, deleted from a counterparty’s computer, any such issues should be brought to the presiding tribunal’s attention, which may appoint a forensic expert to investigate or to retrieve the document from a computer.

“Without prejudice” concept does not apply in Oman

Beware of assuming that the common law concept of “without prejudice” applies. In many common law jurisdictions, it is usual practice for parties to make off the record concessions for the purpose of seeking a settlement. In exchange, your opponent agrees not to use any adverse admissions as evidence. This concept does not officially apply in Oman, and therefore it is recommended not to make any concessions against your interest to the opposing party. However, we are able to recommend “creative solutions” to this conundrum.

Gather witness statements as soon as possible

In commercial claims, it is advantageous to gather witness statements as soon as possible for the following reasons: individuals will have fresher recollections of the dispute, and will be able to give accurate and reliable testimonies; many expatriate workers are often in Oman for a limited period of time, and may very well return home or pursue an opportunity in another country; local employees who played a crucial role in the dispute may also leave the company and head elsewhere.

The situation is different in criminal proceedings, and you should consult with your legal advisor before preparing any written statements.

Post-dated cheques or performance guarantee

It is common practice in Oman to provide a contracting party with a post-dated cheque or a performance guarantee at the beginning of the contractual term. If your business has entered into such an arrangement, your contract will most likely contain certain conditions which trigger the opposing party’s right to encash the cheque or, alternatively, exercise the guarantee. However, if a dispute arises, your company cannot unilaterally prevent the opposing party from exercising one of the above options.

It is important to note that a dishonoured cheque (when provided as a guarantee of future payment) is a criminal offense in Oman. The signatory on the cheque may be subject to criminal charges if the cheque is dishonoured, and imprisonment can be imposed until the amount due as per the cheque is paid in full.

Termination of employment often leads to court action

Employees are granted high levels of protection under the Oman Labour Law (promulgated by RD 35/2003). As a general rule, employers are not at liberty to terminate an employee without establishing a causal link to an employee’s breach of Article 40 of the Oman Labour Law. We cannot stress enough the importance of obtaining legal advice prior to dismissing an employee.

Read before signing

If you are requested by any authority to sign a document, be sure to know exactly for what it is that you are signing, even for correspondence delivered by certified mail. It is important to keep track of all correspondence between your company and the opposing side, as receipt of correspondence may be used as confirmation that certain allegations or positions of fact and law were conveyed. This is particularly important for court-related documents, such as service of process. We are familiar with cases in which service of process was deemed properly fulfilled, even when a signature was not obtained, as the company’s reception centre failed or refused to sign for a delivered package. Beware of such issues and implement the appropriate in-house protocols.

Involve lawyers early

The importance of involving legal advisors early in a dispute cannot be understated. This is particularly true when operating in a jurisdiction in which you are likely unfamiliar. Further, there are several provisions which, if not properly adhered, may prevent the case entirely from being heard on its merits. For example, falling outside the time limits or an improperly executed power of attorney may very well permanently prevent a claim from being commenced.

Lawyers will also be able to help you properly evaluate your case, and help you develop a comprehensive strategy to realise a favourable, cost-effective outcome. Most importantly, lawyers may be able to help you find a resolution without formal legal action, which will help your company maintain its business relationship with the disputing party.