Enforcing an Arbitration Award in Oman: Key Considerations

Many commercial contracts in Oman contain arbitration clauses.  The types of arbitration clauses often encountered include arbitration pursuant to well-known procedures such as the LCIA Arbitration Rules or ICC Arbitration Rules, or ad hoc arbitration under Royal Decree 47/1997 (the “Arbitration Law”).

The outcome of any method of arbitration is the publication of a final award by the arbitral tribunal.  However, as the arbitral tribunal is not a court, it is sometimes necessary for the successful party to take steps to enforce the final award against the unsuccessful party.
It is important to obtain legal advice in relation to the enforcement of any arbitral award.  Generally, the process for the enforcement of the arbitration award is as follows:

1. Firstly a party should check if there are any errors in the final award, such as typographical or mathematical errors, that affect the outcome.  It may be possible to have mere typographical or mathematical errors corrected by applying to the arbitral tribunal under Article 50 of the Arbitration Law.  Any such error must be corrected within 30 days. 

2. It is a good idea for the successful party to send a letter of demand to the other party stating that, per the arbitration award, the other party should pay the amount of the award.  This may save the need for any enforcement proceedings.  The letter should specify a time period for payment.  Often the contract will specify such a time period.  However, bear in mind that little can be done in the first 90 days if the other party fails to pay, irrespective of what the contract states.

3. If the other party fails to pay within 90 days from the date of the award, then a party should deposit the arbitration award with the Commercial Court for registration.  If the award is not in Arabic, an official Arabic translation must be included.  The Commercial Court will typically stamp the award within one week from the date of depositing the award. 

4. Thereafter, a party should arrange for its lawyer to submit an enforcement application to the Commercial Court.  The Commercial Court will then notify the other party about the enforcement application and will direct the other party to deposit the award sum per the award within seven days of being notified.

5. If the other party does not deposit the award sum within seven days of being notified, then the successful party should submit a letter to the enforcement department requesting the Court to issue a warning notice to the other party to make payment per the arbitration award.

6. After submitting the letter, the enforcement department will inform the party of further steps, which may involve physical seizure of the other party’s assets.

In the interim, a party should bear in mind that the other party may file an application for nullity of the arbitration award (i.e., set aside the award) within 90 days from the date of receipt of the award. Such an application will usually be accompanied by an application to stay enforcement proceedings. The grounds for doing so are limited, but such an application has to be fought before the award may be enforced.

Overall, the process can take considerably longer than 90 days in hard-fought proceedings.  However, arbitral awards have an advantage over court judgments in that, apart from applying for nullity, there is no right of appeal against an arbitral award.