Wednesday, December 11, 2019

Misrepresentation under Omani Law

“Misrepresentation” is a concept of wide importance in common law jurisdictions.  In English contract law and tort law, a misrepresentation is a false statement of past or present fact made by one contracting party to another, which has the effect of inducing the other party to enter into a contract.
It is often used as an alternate cause of action to breach of contract, because the remedies for a successful claim for misrepresentation are different from those available for breach of contract.  Importantly, among the possible remedies for misrepresentation is rescission, where the contract is annulled and the parties restored to the position they were in before the contract was entered into.
Misrepresentation, under English law, does not necessarily require intent to deceive.  “Negligent” and even “innocent” statements may constitute misrepresentation if they are false and their effect was to induce the other party into the contract.
Entire agreement clauses in common law jurisdictions typically aim to exclude liability for misrepresentation, but carve out liability for fraudulent misrepresentation.  In other words, the parties agree not to claim for “negligent” or “innocent” misrepresentation in connection with the agreement, but also state expressly that they are not seeking to limit or exclude claims for fraudulent misrepresentation.
The Civil Code does not, then, on a literal interpretation, recognise negligent or innocent misrepresentation: there must be an intention to deceive. The onus is on the party alleging misrepresentation to establish that (a) they were deceived by the misrepresentation; and (b) the deception was intentional.
It must be borne in mind, however, that the Omani courts have a large degree of judicial discretion, with scant case law to reference, so it is not impossible to exclude the possibility that they could find misrepresentation without intent having conclusively been demonstrated.
Nevertheless, the wording relating to misrepresentation in standard entire agreement clauses should be drafted bearing in mind the more narrow definition of the term under Omani law. Any attempt to limit or exclude liability for negligent or innocent misrepresentation could be at best superfluous and at worst confusing; and any attempt to exclude liability for fraud would be void under Article 182 of the Civil Code.


Tuesday, December 10, 2019

Centre for the Protection of Competition and Prevention of Monopoly

Under the Protection of Competition and the Prevention of Monopoly Law (the “Competition Law”), Sultani Decree 67/2014, the role of the Competition Authority was originally assigned to the Public Authority for Consumer Protection (the “PACP”) and specifically to the Department of Competition and Monopoly Prevention.  On 9 January 2018, the Centre for the Protection of Competition and Prevention of Monopoly (the “Centre”) was established by Sultani Decree 2/2018 (the “CPC Law”) and took over the role of the Competition Authority from PACP.  The establishment of a dedicated Centre emphasises the importance of competition in the Oman business landscape.  The main purpose of the Centre is to monitor the application and implementation of the Competition Law and to promote free competition in the Omani market.
The Centre falls under the supervision of the Ministry of Commerce and Industry and the CPC Law provides for the appointment of a Chairman, Board of Directors and CEO.  Accordingly, the Centre has recently appointed the Board of Directors under the Chairmanship of His Highness Dr Adham Al Said.
The Chairman of the Centre is appointed, inter alia, to draft the Executive Regulations of the Competition Law, which will clarify and determine the actual applicability of a number of provisions.  Such Regulations will be subject to approval of the Board of Directors of the Centre and of the Ministerial Cabinet.  Following the issue of the Regulations, the Centre will be able to pursue its objectives in a better defined legal framework.  The implementation of a number of procedures (including the temporary exemption which may be considered by the Board of the Centre whenever such exemption pursues higher interests by encouraging development and competition) is entrusted to the Regulations.  We have no indication of their envisaged content; therefore, in the current circumstances and pending the publication of the Regulations, the only procedure that appears sufficiently defined is the request of approval for acts leading to economic concentration.  We expect that until the Regulations (or other applicable legislation) are issued, the Centre would not be in a position to exercise some of its competences.
The objectives are set out in Chapter Two of the CPC Law and include:  protect the market from anti-competitive practices, publish and promote studies that focus on monopolistic practices that affect the free market, undertake measures regarding the prevention of practices that are in violation of competition, study the suggestions and recommendations received by the Centre with regards to the protection of competition and the prevention of monopoly, and represent the Sultanate of Oman in regional and international conferences and meetings related to the Centre’s scope of work.
To share information on its activities, the Centre has published an official website which sets out as the general goals of the Centre:  (a) supporting domestic companies in order to enable them to compete in the international market and (b) attracting foreign investment to Oman.
Article 17 of the Competition Law states that any person may report to the Centre any agreement, procedure or practice which may be in breach of the provisions of the Law.  The Centre is responsible for receiving complaints pertaining to anti-competition and monopoly practices and, in connection with each complaint, conduct research, investigations and evidence collection.  The penalties stated in Chapter Four of the Competition Law are enforced by the personnel appointed jointly by the competent authority and the Chairman of the Centre.
As of today, there is little information available on actual proceedings.  The most important indication of how competition laws are interpreted and implemented worldwide can be found in anti-trust judgment and other similar decisions, which are customarily published.  The Competition Law provides that in the event of a violation, “the final decisions and provisions shall be published in two daily newspapers, one of which shall be Arabic, or by any means of advertising at the expense of the violator.”  This implies that, over time, it should be possible to follow the evolution of the decisions of the Centre and possibly the courts where applicable.


Monday, December 9, 2019

Enforcement of Arbitral Awards, Part 3: Enforcement of Awards That Have Been Set Aside


As mentioned in a previous article, under certain circumstances if an award has been set aside (denied ratification) by the court where the award was rendered, in very limited instances that award may still be enforced by the courts in another country.  This is a particularly interesting occurrence as it goes against comity (the mutual recognition of legislative, executive, and judicial acts) as well as res judicata (a case in which there has been a final judgment and the matter is no longer subject to appeal).  When this takes place, it is the result of a court setting aside an award on spurious grounds.

As summarised in this article, the enforcement of an award that has been set aside at the seat takes place through the New York Convention (the “NYC”) (or other comparable convention) and is a considerably complex situation.  This is a particularly noteworthy issue as courts in particular in the GCC have had a reputation for occasionally setting aside awards on grounds that are not internationally recognised, notably based on “unique” public policy grounds; this article will demonstrate that it is not the end of the road for those awards set aside.

When an award becomes binding

In order for an award to be enforceable under the NYC, that award needs to be binding.  However, interestingly, the time at which an award becomes binding is not uniform across all countries.

Notably, under Omani law, an award is binding and final after the 90-day period to challenge the award has elapsed (Article 58, Sultani Decree 47/1997, the "Arbitration Law").   In some jurisdictions an award is binding only after the award has been confirmed by a court; in others, it is considered final when it is rendered.  In light of the fact that under the NYC the enforcement of foreign awards must not be given more onerous treatment than domestic awards, there is an argument that those courts must also treat an award that is rendered in Oman as binding and final when rendered despite the fact that the 90-day period under Omani law has not elapsed.  This is a peculiar application of the NYC and international law, in that a foreign court would treat an Omani award as final before an Omani court.  The counterargument to this is an award cannot be enforced until it is binding under the laws where it is made.  Nonetheless, following the above, a foreign court could enforce an award that is binding in accordance with its domestic law and disregard the law of where it is rendered as to whether it is binding and final.

Article V(1)(e) hurdle

Article V of the NYC lists the grounds on which a court may refuse to enforce an award.  Article V(1)(e) provides that:  “The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.”

This article is noteworthy as it underpins that an award should be considered final or it may be denied enforcement.

Article V(1)

Even though an award is set aside by the courts where it is rendered, there is no obligation on a court in a foreign country to give comity to the decision to set the award aside.

In this respect, Article V(1) of the NYC provides that a court may, but not must, refuse enforcement of an award if it falls under one of the five grounds to set aside an award that are listed under Article V(1).

The wording of Article V(1) is as follows:

“Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought ….”

The use of the word “may” is particularly important as it provides courts the discretion as to whether it will refuse enforcement.  The drafters of the NYC intentionally included the word “may” in Article V(1) to provide this discretion to courts.  This is also supported by case law from a number of jurisdictions.

Article V(2)(b)

In addition to the above is the local standards annulment provision:  under the NYC an award may be set aside based on local standards that are unique to a particular jurisdiction; generally, this falls under public policy grounds that are unique to a certain country.  When this takes place, an award that is set aside based on these unique standards may then be enforced in another jurisdiction that does not apply the same grounds for nullifying awards.

For a more in-depth discussion of this topic, see M. Dunmore, Austrian Yearbook of International Arbitration, Chapter III:  The Award and the Courts, Enforcement of Awards Set Aside in their Jurisdiction of Origin, 2014.


Sunday, December 8, 2019

In the Pipeline - November 2019

Sultani Decree 76/2019 promulgates the Civil Aviation Law.  The law applies to civil aircraft registered in the Sultanate of Oman, civil airports, commercial air transport and general aviation, air navigation services and any other activities related to civil aviation in the Sultanate.  Article 27 prohibits the use of remote-controlled aircraft, drones and any other flying object prior to obtaining approval from the competent authority.  In addition, Article 27 prohibits the transport of weaponry, explosives, ammunition and all hazardous or inflammable materials in a civil aircraft prior to obtaining consent/approval from the competent authority.  Sultani Decree 76/2019 repeals Sultani Decree 93/2004 and the law comes into force on the day following its publication.

The Law Governing the Practice of the Medical Profession and Associated Health Professions is promulgated by Sultani Decree 75/2019.  The Minister of Health is set to issue the Executive Regulations within a period not exceeding one year from the date of publication.  A technical committee shall be formed with the aim of preserving and maintaining the medical profession and to help it abide by its principles.  Medical practitioners and associated health practitioners are under an obligation to perform their duties with integrity as required by the profession, to comply with the rules and regulations governing the practice of medicine and to document patients’ diagnosis and treatment.  This law repeals Sultani Decree 22/1996 and comes into force on the day following its publication.

Please contact us if you would like more detailed advice on the above.