Monday, March 28, 2016

Enforceability of Omani Court Judgments in Foreign Jurisdictions

Pursuant to the Omani Civil Procedure Law (promulgated by Royal Decree 29/2002 as amended), it is stated that the Omani Courts will enforce a final and binding non-appealable foreign court judgment only if there is a bilateral agreement between Oman and a foreign nation whereby the countries have agreed to reciprocally enforce each other’s judgments. Stated differently, the Omani Courts will recognize and enforce a final, non-appealable foreign court judgment only if the courts of that very same country recognize and enforce final, non-appealable Omani Court judgments.

The members of the Gulf Cooperation Council (“GCC”) signed a bilateral treaty in 1996, titled the “Treaty for the Enforcement of Judgments, Judicial Delegation and Court Summons,” wherein the GCC member states agreed to reciprocally enforce all GCC-rendered final and binding civil and commercial court judgments without a review of the merits. Accordingly, any final, non-appealable civil and commercial court judgment rendered in any country within the GCC is per se enforceable (without review of the merits) within any other jurisdiction in the GCC.

Oman is also a co-signatory of the 1983 “Riyadh Arab Agreement on Judicial Cooperation,” known as the Riyadh Convention. The Riyadh Convention provides for reciprocal recognition and enforcement of final, non-appealable civil and commercial court judgments between Jordan, Bahrain, Tunisia, Algeria, Djibouti, Saudi Arabia, Sudan, Syria, Somalia, Iraq, Oman, Palestine, Qatar, Kuwait, Lebanon, Libya, Morocco, Mauritania and Yemen. Accordingly, any final, non-appealable civil and commercial court judgment rendered in Oman is theoretically enforceable in these jurisdictions.

The Omani Courts will, however, retain an overall discretion to refuse to enforce a foreign court judgment, regardless of any reciprocal recognition with the country in question. The most notable occurrence of this is when a foreign judgment is deemed to conflict with Omani “public order” or “public morality.” Public order is certainly relative and open to the Court’s interpretation and discretion.

Unlike the United Arab Emirates, which has entered into a reciprocal agreement with France under what is known as the Paris Convention of 1992, Oman has not entered into any reciprocal treaties with any prominent Western jurisdictions. Therefore, it is important to consider where a potential final Omani court judgment may be enforced at the time you are negotiating a contract with your contractual counterparty, as there may be little benefit in obtaining a final court judgment if the judgment cannot be enforced in a jurisdiction in which the adverse party possesses assets.

When drafting a contract, it should be considered whether any disputes arising under it should be resolved by way of arbitration, rather than by court litigation. The reason for this that Oman is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and, as such, any arbitral award rendered in Oman is enforceable in any country which is a co-signatory to the New York Convention. Equally, an arbitral award rendered in any co-signatory state should be automatically enforced in Oman.