Wednesday, December 9, 2020

The Marketing And Promotion of Banking, Insurance, and Investment Products and Services in Oman

We are often asked to advise on the restrictions on foreign entities marketing and promoting financial services in Oman. Below we set out the position with respect to marketing in three key areas.

Banking services

 Under article 52 of the Banking Law, promulgated by Sultani Decree 114/2000, as amended (the “Banking Law”):

“No person shall engage in banking business in the Sultanate as either a domestic or foreign bank, or practice any other banking activity whatsoever, unless such a person has been granted a licence by the Central Bank…”

 However, article 50 of the Banking Law provides that:

“… a foreign bank may use its name and publicize its business activities if such use and publicity clearly establish that such foreign bank does not engage in the banking business within the Sultanate.”

To the extent that a foreign bank’s contact with customers is restricted to servicing their accounts in the country where the bank is registered, or in the bank’s overseas branches or offices, this should not constitute a violation of Omani law.

When offering the foreign bank’s services or products to customers, so long as the bank makes clear to customers that it is not offering such products and/or services in Oman, this should not constitute a breach of Omani law.


Insurance in Oman is regulated by Insurance Companies Law promulgated by Sultani Decree 12/1979, as amended (the “Insurance Law”). 

Except for the provision of life insurance to non-Omanis, the Insurance Law prohibits insurance contracts with foreign companies which are not commercially registered in Oman.

Therefore, a foreign entity may promote life insurance policies provided by third parties to nonresident expatriates in Oman. However, the entity may only promote third-party insurance products (other than life insurance) to non-resident expatriates in Oman if those policies do not cover risks that (a) are situated in Oman; (b) originate in Oman; or (c) are connected with property in Oman.

If such third-party insurance products (other than life insurance) cover risks that (a) are situated in Oman; (b) originate in Oman; or (c) are connected with property in Oman, then they may be offered or provided only by entities licensed to offer such products in Oman.


The main legislation that governs all forms of marketing and sale of foreign securities in Oman is the Capital Markets Law promulgated by Sultani Decree 80/1998 (the “CMAL”) and the Executive Regulations of the Capital Markets Law Decision 1/2009 (the “Executive Regulations”).

“Securities” are defined in the CMAL as “shares and bonds issued by joint stock companies and the bonds issued by the Government and its Public Authorities, treasury bonds and bills and other securities negotiable in the Market.” Despite the apparent restricted scope of this definition, the Capital Markets Authority (the “CMA”) in practice regulates any kind of investment product that is offered or marketed in Oman.

Article 117 of the Executive Regulations contains a general restriction on the offering and marketing of non-Omani securities within Oman without the approval of the CMA.

In our opinion, the marketing of mutual funds without the approval of the CMA would be a violation of Omani law.


In conclusion, a foreign bank may contact its customers in Oman to service their accounts and to offer products and services as long as in doing so it makes clear that the bank does not conduct any banking business in Oman. 

A foreign entity may promote third-party insurance policies (other than life insurance) to non-resident expatriates, provided it does not cover risks that (a) are situated in Oman; (b) originate in Oman; or (c) are connected with property in Oman.

The marketing of mutual funds is not permissible without the approval of the CMA.


Tuesday, November 3, 2020

Changes to Income Tax Law by Sultani Decree 118/2020

The provisions of the Income Tax Law (“ITL”) have been amended by Sultani Decree 118/2020. This change partially comes within the framework of the Sultanate’s accession to a number of international agreements on tax affairs related to information exchange, which were signed on 26 November 2019 at the OECD headquarters in Paris.

Significant changes to the ITL include:

  • introduction of a new section titled tax residency
  • requirement to file only one tax return but within four months from the end of the relevant tax year or accounting period; and
  • enabling provisions to facilitate Automatic Exchange of Information (“AEOI”) between tax jurisdictions.

The general rule is that the financial information of an individual cannot be disclosed to anyone but the concerned person; however, Article 29 of the amended law specifies the cases wherein the appointed person in the Tax Authority can disclose financial information, data or documents:

  • The concerned person explicitly consented to the disclosure,
  • Implementation of a decision issued by the Income Tax Committee,
  • Implementation of a decision or judgment issued by a competent judicial authority, and implementation of a fatwa request, or
  • Decision issued by an official body legally authorised to do so.
In accordance with AEOI, the Tax Authority has the right to obtain any financial data, information or documents from any person for the purposes of implementing the provisions of international bilateral or multilateral treaties concerned with tax affairs, including requesting any information related to any person from any licensed bank in the Sultanate. Furthermore, the bank is legally not authorised to notify its client of the search, and refusal to oblige to the Tax Authority’s request may result in administrative penalties.

This provision comes as an exception to Article 70 of the Banking Law and Article 29 of the amended ITL. The Tax Authority is also authorised to conduct search proceedings at the concerned person’s residence to obtain any relevant information.

The tax residency was introduced in the amended ITL to define the persons subject to the provisions of the ITL. The amended law provides that the persons that are legally considered tax residents are:

  • Natural persons residing in the Sultanate who are present in the country for more than 183 continuous or intermittent days within a tax year
  • Legal persons if they are either an established entity in the Sultanate or if their headquarters or actual place of management is in the Sultanate
Furthermore, all appeals against the Tax Authority objection decisions shall now be filed with the Tax Grievance Committee. The appeal to a decision should be submitted in writing to the Committee, including the complainant’s request and the reasons on which the complaint are based, within 45 days from the date of his notification of the objection decision issuance or from the date of the expiration of the period specified for adjudication.

These measures will support the Sultanate’s participation in international efforts aimed at curbing tax evasion and tax fraud crimes.


Wednesday, October 28, 2020

VAT To Be Introduced In Oman From April 2021

On 12 October 2020, Sultani Decree 121/2020 in relation to the implementation of value added tax (“VAT”) in Oman was issued (the “VAT Law”). Following the introduction of VAT in Saudi Arabia, the United Arab Emirates and Bahrain, Oman will be the fourth GCC country to implement VAT in the region.

The VAT Law will set out the general principles for the application of VAT in Oman in line with the Unified GCC Agreement for Value Added Tax. The VAT Law is expected to be published in the Official Gazette on 18 October 2020 with an effective date for the introduction of VAT in April 2021.

The VAT Executive Regulations will provide more detail on specific areas of the Law and are expected to be published by December 2020.

Although the information currently available is limited, the Oman Tax Authority has begun to issue some information on the VAT Law through its social media channels, including that the following categories will not be subject to VAT at the standard rate of 5%:
  1.  Basic food commodities.
  2. Medical care services and associated goods and services.
  3. Education services and associated goods and services
  4. Requirements for people with disabilities.
  5. Supplies for charities.
  6. Financial services.
  7. Undeveloped lands (vacant lands).
  8. Resale of residential properties.
  9. Passenger transport services.
  10. Renting out real estate for residential purposes.
  11. Supply of medicines and medical equipment.
  12.  Supply of investment gold, silver and platinum
  13. Supplies of international transport and interchange of goods or passengers, and the supply of associated services; the supply of marine, air and land transportation means intended for the transport of goods and passengers for commercial purposes, and the supply of goods and services associated with transport.
  14. Supply of rescue and aid aircraft and vessels
  15. Supply of crude oil, petroleum derivatives and natural gas.
The issue of the Royal Decree is a significant and long-awaited step in the introduction of VAT in Oman. Although further guidance is expected over the coming days and weeks, businesses should consider immediate steps on how to best prepare and assess the impact of VAT on their business activities in Oman.


Tuesday, September 22, 2020

Overview of the Excise Tax Law

The Excise Tax Law (the “Excise Law”) was promulgated on 13 March 2019 by Sultani Decree 23/2019, and came into effect 90 days after its publication. The Sultanate is the fifth Gulf Cooperation Council (“GCC”) country to introduce an excise law, thereby implementing the unified GCC Excise Tax Agreement. 

The Tax Authority issued the Executive Regulations of the Excise Law on 19 July 2019. The regulations address details and rules of aspects of the Excise Law, including the process of registration, tax warehouse conditions of operation and procedures, tax suspension, tax exemption and penalty articles.

Excisable goods as defined by the Excise Law are “[g]oods that are harmful to human health or the environment; or luxury goods, whether such goods were produced locally or imported, and are subject to Tax in accordance with the provisions of this Law.” The broadness of the definition is narrowed down by Ministerial Decision 112/2019, published on 2 June 2019, which categorises excisable goods as: tobacco products, carbonated drinks, energy drinks, pork products and alcohol drinks. The rate applied on the excise goods is 50% on carbonated drinks and 100% on the rest. Currently there is a temporary reduction rate on alcohol drinks imposed by the Secretariat General of Taxation, Ministry of Finance. The Ministerial Decision has yet to be amended to reflect the change.  

The Excise Law differentiates between three types of persons:

  • Responsible Person: any individual that is associated with the person liable to tax, and shall replace the liable person in fulfilling his obligations related to the implementation of the provisions of this law.  
  • Registered Person: an individual registered with the Secretariat General. As an exception, importers who bring in excisable goods on an “irregular basis” (e.g., only once every two years or so) are exempted from the registration requirements. 
  • Person Liable to Tax: a registered person or any other person liable to pay tax. 
Registered Persons may appoint Responsible Persons and must notify the Secretariat General of the appointment in accordance with the Executive Regulations. Individuals required to be registered shall be subject to the Excise Law, even if they do not comply and register.

Examples of exemption from Excise Tax include excisable goods received by diplomatic bodies, consulate bodies, certain international organisations and the like, as well as excisable goods carried or transported for non-commercial purposes by individuals coming to Oman. 

Furthermore, the Excise Tax can be suspended if the excisable goods are stored or received in a tax warehouse, the transfer or movement of excisable goods is from one tax warehouse to another within Oman or across the GCC countries, and the transfer of excisable goods is to designated exit points for export. 

Administrative penalties imposed on individuals that do not comply with the Excise Law range from OMR 500 to OMR 20,000 and an imprisonment period of not less than two months and not exceeding three years.

The introduction of the Excise Law highlights the Sultanate’s shift in economic policy, specifically in the form of a growing appetite for imposing new taxes - a policy direction that the Sultanate’s neighbouring states have already taken. It is expected that the Sultanate may introduce other tax laws in the near future.  


Wednesday, August 19, 2020

Executive Regulations of the Foreign Capital Investment Law

The Ministry of Commerce and Industry issued Ministerial Decision 72/2020 (“MD 72/2020”) issuing the Executive Regulations of the Foreign Capital Investment Law (Sultani Decree 50/2019). The Executive Regulations repeal all that previously contradicts MD 72/2020 and will be published in the Official Gazette and come into effect from the day following its publication date, 14 June 2020.

Sultani Decree 50/2019 promulgating the new Foreign Capital Investment Law (“FCIL”) came into force six months after the date of its publication, removing the requirement of an Omani partner and reducing shareholding limitations on foreign investors, thus allowing 100% foreign investor-owned companies. The FCIL and the Executive Regulations bring emphasis to the Sultanate’s commitment to further economic progress through permitting the establishment of wholly owned non-Omani companies, exemptions and incentives. 

The Executive Regulations introduce us to the investment license, defined under MD 72/2020 Article 1 as the approval issued by the competent authority for the foreign investor to establish the investment project; the foreign investor may only establish the investment project after obtaining the investment license. In order to obtain the investment license, an application must be submitted to the electronic system detailing and consisting of: the name of the investor and its nationality, its place of residency, bank details of the investor, the activities that the investor wishes to practice, previous experience of the foreign investor (if any), the total number of employees that are expected to be employed in the investment project, the expected time frame of the project, the date of commencement of the project, an economic feasibility study of the investment project, a certificate of approval that is issued by the bank/office pursuant to Article 7 and any other information or documents that the competent authority may deem necessary. 

Upon the submission of the application, the competent authority is responsible for reviewing and examining the submitted application in regards to obtaining the license required for the establishment of the investment project, and is required to reach a decision within 14 working days from the date of submission. If there is no feedback/response within this period, this would indicate approval of the application. Following this, the competent authority will issue the license within a period of three days from the date of obtaining/satisfying all approvals, permits and licenses that are required for the investment project. 

In addition to the further clarifications that the Executive Regulations have provided of the FCIL application and submission process, they also provide incentives and benefits for foreign investors wishing to establish wholly owned non-Omani companies. Such incentives include exemptions that are permitted through a decision from the council of ministers for investment projects that are to be establishment in less-developed regions in Oman. The exceptions are as follows: 

(i) Exemption from the rental value or the return of the right to use the land and real estate that is necessary for the investment project, for a period not exceeding five years from the date of the operation of the project. 

(ii) An exemption from the current Omanisation requirements for a period of two years from the date of the operation of the project. 

(iii) Exemption from all or part of the fees. 

While the new FCIL and Executive Regulations aim to enhance and promote foreign investment in the Sultanate of Oman, there is a negative list of activities that restricts foreign investors from practising activities in those areas, typically small-scale industrial activities. 


Tuesday, July 21, 2020

Oman Abolishes the No-Objection Certificate

The Sultanate has announced its decision to abolish the No-Objection Certificate (“NOC”) for expat workers who wish to transfer their services to different sponsors upon the termination of their services with existing sponsors. The decision to cancel NOCs will be enforced from the start of 2021 with the aim of making the labour market more attractive and competitive, as well as correcting its conditions.

The cancellation of the NOC is largely due to the Sultanate’s accession to the International Covenant on Social, Economic and Cultural Rights, which the Sultanate agreed to join on 7 April 2020 in accordance with Royal Decree 46/2020 issued by his Majesty Sultan Haitham Bin Tarik.

Article (6) of the Covenant states that countries that are party to the Covenant shall recognise “the right to work,” which reserves to every individual a right to earn a living by practicing a work of his/her choice or accept it freely. The same article requires signatories of the Covenant to take necessary action to guarantee this right.

Article (7) of the Covenant states that the signatory countries that are party to the Covenant shall recognise the right of every individual to enjoy fair and satisfactory terms of employment.

The decision of the Royal Oman Police (ROP) amended some provisions of the Executive Regulations of the Foreigners Residence Law, issued by Royal Decree 40/15. Article (1) replaces the text of Article (24) of the Executive Regulations. The repealed article stated that an expatriate employee shall not be granted an employment visa if he or she has worked in Oman but has not completed two years from the date of his or her last departure; the employee can return to the same employer anytime within two years or he can join a new company, provided there is a NOC from the last employer. The new article states that “expatriate resident visas may be transferred from one employer to another who has a license to recruit workers, provided the evidence of the expiry of contract or termination of the employment contract is presented with proof.” There should be an approval of the competent government authority on the second employer’s contract with the expatriate, per the rules. The transfer of residence permits belonging to the expat’s family members to the new employer will be allowed.

It is hoped that this decision will achieve many positives for business owners, including the adoption of the principle of labour contracts that will regulate contractual relations between employers and workers in a manner that guarantees the rights and duties of both parties. Also, such contracts will provide an aspect of protection for employers in terms of keeping the confidentiality of their data with them, and to ensure that there is no competition if the employer wishes to leave.

One of the main advantages of implementing this decision is to enhance the competitiveness of the Omani workforce.  In addition, the decision will result in reducing costs and administrative burdens resulting from deportation procedures and the settlement of legal status.

It is expected that this decision will support the Sultanate’s efforts to combat black market trade, as it will reduce the ability of some employers to exploit the issuing of NOCs. Also, this decision will result in a local market for talents that enjoys the dynamics of supply and demand.

A grace period has been provided for the application of this decision extending until the beginning of 2021. As for the rights to confidentiality of the information the worker accesses during the contracting period, the law allows employers to conclude non-disclosure agreements to preserve confidential information even after the worker has moved to work with another employer. With regard to the possibilities of the worker moving to a direct competitor, employers may conclude a non-competition agreement to ensure that the worker does not move to a direct competitor after the end of the contractual period between them.


Tuesday, June 9, 2020

Coronavirus (COVID-19) and the Force Majeure Event: The English Law Perspective

The spread of coronavirus (COVID-19), which was declared a pandemic by the World Health Organization on 11 March 2020, is impacting business relationships around the world and has created novel legal issues which affect various areas of law from contracts to banking, regulatory issues, taxation, employment matters, disputes and many others.

This note focuses on the relevance of force majeure on contracts under English law.

i. Force majeure 

In general terms, force majeure refers to events outside the control of the parties, for example, natural disasters or the outbreak of hostilities, which render performance under the contract impracticable or impossible, or which delay performance. It is common for the parties to a contract to provide that such force majeure events will not make the defaulting party liable if they prevent it from performing its obligations.

The concept of force majeure is derived from civil law, and under English law it is wholly a creation of contract. There is no statute establishing the ability to rely on force majeure, and no statute which defines what will constitute a force majeure event. Instead, force majeure relies on the provisions specific to a particular contract. Therefore, under English law a party can only claim force majeure if the terms of the contract allow it. The details of the agreed contract are particularly important in this context.

Many contracts include force majeure clauses which contain a list of events beyond the control of the parties, such as wars, riots and other civil emergencies, as well as natural disasters such as floods, earthquakes and hurricanes. Parties can also agree to include a pandemic or epidemic as a force majeure event.

Whether COVID-19 falls within the scope of a force majeure clause will depend, therefore, on the language of the clause itself. Clearly, if the force majeure clause relieves a party from performing its obligations in the event of a pandemic or epidemic or government-imposed quarantine, COVID-19 is likely to be a qualifying event. Subject to the specifics of the clause, it may also be necessary to show that the contractual performance is actually being impacted or delayed by COVID-19.

 Even without an express reference to an epidemic or pandemic, the current situation may still be covered by other language in a clause. For example, it is common to have “an Act of God” as a force majeure event. In such a case, it will be important to properly evaluate the entire language of the clause and its specific contractual context in order to assess whether COVID-19 is covered by this term. Currently, the English case law provides little guidance on the point. As such, we consider it likely that there will be significant litigation on this issue in the coming months and years.

ii. How is performance affected?

There must be a fundamental causal nexus between the force majeure event and the ability to perform the contractual obligation. Most clauses operate such that the performance must be prevented, hindered, or delayed. It will usually not be possible to invoke force majeure just because the performance has been made more difficult or less profitable.

In addition, a party invoking force majeure will usually have to show the attempts it has made to mitigate the non-performance and reduce, for example, the damages or the delay in performance. As a matter of evidence, the burden of proof is with the party invoking force majeure.

iii. Consequences of force majeure

The precise effect of successfully invoking force majeure will vary from contract to contract. Often the successful invocation will result in some form of relief from the complete or timely performance of the contract. As well as being relieved from its obligations, the successful party may not be liable for damages as a consequence of its non-performance, or may get an extension of time to perform, or a suspension of certain other contractual terms.

iv. Other considerations

Adequate notices should be provided to the other party in accordance with the contractual provisions. Notices may have to be given within a certain period, and may require complying with certain formalities. The English courts strictly police compliance with such formalities.

In addition, going forward, businesses may consider including “pandemic” or “epidemic” in their force majeure clauses.

v. Compliance with law

It is common for contracts to have a general provision requiring compliance with the applicable law. It is possible that such clauses will provide protection to a party which has had its ability to perform the contract hindered by government-ordered action, even where there is no force majeure clause.

vi. Doctrine of frustration

When the contract is silent and does not contain any force majeure provision, it may be possible under certain circumstances to rely on the common law doctrine of frustration. For a contract to be frustrated, there must be a significant change in circumstances which is not the fault of either party, and which make the contract impossible to perform. In these circumstances, COVID-19 could be invoked as the supervening event.

For example, depending on the type of contract, it may be possible to argue that either one or both of the government lockdown or the COVID-19 virus itself has frustrated the contract. Long-term contracts are less amenable to claims of frustration where the impact of COVID-19 may be severe but temporary. The consequence of frustration is that the contract comes to an end and the parties’ future contractual obligations are automatically discharged.

vii. Conclusion

Businesses which have been impacted by COVID-19 would be advised to carefully:

  • review their contracts;
  • review the force majeure clauses, if there are any, to determine whether the current situation falls within them;
  • analyse the notice provisions for invoking force majeure;
  • consider any compliance with applicable law provisions; and
  • consider whether the contract has been frustrated. 
In all cases the analysis should be targeted on the specific contracts and will have to be applied on a case-by-case basis. 


Wednesday, June 3, 2020

eSignatures under Omani Law

In 2008 the Electronic Transactions Law (the “Law”) was promulgated by Sultani Decree 29/2008 in order to regulate electronic commerce in Oman. Since then, eSignatures have become increasingly accepted and used by businesses in Oman.

eSignatures are valid, admissible in court and enforceable, subject to the conditions set out below.

The Law recognises three types of eSignatures:

1. Secure eSignatures (Article 22)

This category of eSignatures is best protected under the Law because reliance on such signatures is presumed to be reasonable. Consequently, protected eSignatures are accepted as valid and have probative value unless otherwise established.

An eSignature is considered “protected” if it is possible to verify, through (1) the implementation of precise authentication procedures as required by the Law (such as by way of an electronic authentication certificate); or (2) as commercially acceptable and agreed upon between the parties, that at the time of its execution, the eSignature is attributable only to the person who used it, and:

  • the signature-generating apparatus is used only by the signatory;
  • the signature-generating apparatus was, at the time of signing, under the control of the signatory and no other;
  • any alteration to the electronic signature after the time of signing is discoverable; and
  • any alteration to the information relating to the signature after the time of signing is discoverable. However, any concerned person may adduce evidence to prove that the electronic signature is reliable or not.

2. eSignatures which do not fall into the “protected” category (Articles 11 and 23)

eSignatures which are not considered “protected” pursuant to Article 22 may nevertheless also be recognised as having legal force and effect, as long as reliance on the eSignature is reasonable.

Reasonableness is not presumed in such cases; the court will, in order to determine whether reliance on an eSignature is reasonable, take into account several factors, including the following:

  • the nature, value and importance of the concerned transaction;
  • whether the person relying on the eSignature took appropriate steps to determine whether the eSignature or certificate is reliable;
  • any previous agreement or transaction between the originator and the approved party; and
  • any other relevant factor.
Reliance is not considered reasonable where the eSignature is enhanced with an electronic authentication certificate and the relying party fails to verify the validity, applicability and restrictions of the certificate. In such cases, the relying party will be responsible for all risks resulting from the invalidity of the signature unless otherwise established.

3. Foreign eSignatures (Article 42)

In determining whether a foreign eSignature is valid, any agreement between the parties in respect of the transaction in which that signature is used shall be considered, provided that it is not contrary to Omani law.

The Omani courts accept eSignatures as having legal force and effect as long as they meet the requirements of the Law. For example, in order to consider an eSignature valid, Omani courts will determine whether the eSignature is protected and/or the reasonableness of the reliance a person may have on the eSignature. The Omani courts will also consider available evidence including electronic evidence.

eSignatures in connection with electronic transactions and commerce have probative force. Article 2 of the Law provides that the Omani courts will not, however, accept eSignatures with respect to the following documents:
  1. transactions and matters concerning civil status such as marriage, divorce, and wills and endowments;
  2. court proceedings, judicial summons, proclamations, summons, search orders, arrest orders and judicial decrees; and
  3. any document required by law to be authenticated by a notary public.
With respect to the incorporation of the use of eSignatures, ‘protected signatures’ are the best protected type of eSignature under the Law. In order to avail the benefit of this protection, it is important to ensure the requirements in Article 22 (as listed above) are satisfied.

Steps to adopt in order to incorporate the use of eSignatures include:
  1. Determining a duly accredited person which issues electronic authentication certificates and any services or tasks related to it and to eSignatures as regulated under the Law. In order to be duly accredited, this person must hold a certification services provider license in Oman;
  2. Engaging this person to issue an eSignature tool and electronic authentication certificates for your use; and
  3. Implementing all due care and diligence in your use of the eSignature tool, in line with the directions provided by the certification service provider.
It is also important to ensure, when incorporating the use of eSignatures, that such eSignatures are not used with respect to the classes of documents excluded by Article 2 (listed above).

In summary, when deciding whether the use of an electronic signature will be recognised and enforceable, it is important to consider the following:
  1. Whether the type of document with respect to which the eSignature is used may be signed by way of eSignature under the Law.
  2. Whether the signature qualifies as a protected signature under Article 22;
  3. Where an eSignature is being relied on, other than pursuant to Article 22, whether such reliance would be considered reasonable by the courts; and
  4. The jurisdiction in which the agreement or document will need to be recognised and/or enforced. If a jurisdiction other than Oman is involved, it is important to consider its laws regarding eSignatures.
The use of eSignatures also imposes additional duties on a signatory, set out under Article 19. There may be repercussions if these duties are not fulfilled. These duties include notifying concerned persons, without any unjustifiable delay, in the instance of finding out the signatory’s signature tool was or may have been exposed to safety risks based on circumstances or facts made known to him/her.

What would be the risks of proceeding with eSignatures in the event that the law is vague or does not permit/recognise them?

As long as the requirements set out above are fulfilled, there should be no significant risk that the Omani courts will not consider the eSignatures valid.

That said, certain non-legal concerns that must be addressed, in particular with respect to the possible vulnerability of eSignature tools to cyber-attacks, security breaches or misuse. Misuse of an eSignature may result in significant damage to the authorised person to whom the eSignature is linked.

It is therefore extremely important, in order to protect the signatory from any external or internal misuse, to implement high security measures to ensure only the authorised person to whom the eSignature is linked may access and use the eSignature. Measures that may be undertaken include secure storage of the eSignature and authentication certificate, and not sharing access to the eSignature or authentication certificate with any other person.


Monday, May 11, 2020

COVID-19 Announcements by the Omani Government

Last updated: 23 July 2020

The below table sets out the decisions issued by the Supreme Committee and other branches of the Omani Government addressing the COVID-19 pandemic. The table will be updated on a monthly basis to include all key developments.

Updates Topic
(1) General
(2) Private Sector
(3) Public Sector
(4) Annual General Meetings

COVID-19 Updates: General Developments (1)
Date Updates
17 March 2021

The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to:

1. Impose a ban on all direct flights from the United Kingdom, except cargo flights, and prohibit entry of passengers arriving from the UK.  The ban takes effect from 19 March 2021 and continues until further notice.  Omani citizens are exempt from the ban.

2. Downsize to 70% of the number of employees at the workplace in units of the State’s Administrative Apparatus with effect 21 March 2021 – 1 April 2021. 

3. Extend the closure of all commercial activities in all governorates until 3 April 2021.

4. Permit the use of the beach to practice sports for individuals only; the ban on gatherings still continues.

12 March 2021 The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to include home delivery services from restaurants and in relation to foodstuffs to the list of exempted activities.
25 February 2021 The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to extend the closure of all beaches and public parks until further notice.  Also, the Committee emphasised the ban on all gatherings.
22 February 2021 The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to suspend incoming flights from 10 countries, consisting of:  Sudan, Lebanon, South Africa, Brazil, Nigeria, Tanzania, Ghana, Guinea, Sierra Leone and Ethiopia.
07 February 2021 The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to extend the closure of the land border until further notice. 
24 January 2021 The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to extend the closure of the land border for a period of one week, until 1 February 2021.
17 January 2021 The Royal Opera House shall reopen from 17 January 2021.

Further, the Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to close the land border of Oman for a period of one week (extendable), from 18 January 2021.

The Ministry of Health has begun the second dose of the Pfizer-BioNTech Vaccination Campaign.
12 January 2021 The Supreme Committee tasked with tackling developments resulting from COVID-19 has reached the decision to gradually return to the System of Blended Learning from 17 January 2021 for students in schools.
19 November 2020 Primary Courts across different governorates in Oman have issued verdicts against offenders of the decisions of the COVID-19 Supreme Committee. Each offender shall be facing a fine of OMR 1,000 and six months’ imprisonment. Expatriate offenders shall be deported after serving their six-month prison sentence.
15 November 2020 The Supreme Committee tasked with tackling developments resulting from COVID-19 has reached the decision to re-open 700 mosques across Oman. In relation to mosques the capacity of which is 400 persons, it must be limited to only 30%.
10 November 2020 The Ministry of Labour has announced that expat workers in the Sultanate of Oman who wish to go back to their home country are permitted to do so as of 15 November 2020.

Provided that expat workers leave Oman between 15 November 2020 – 31 December 2020, the Ministry of Labour shall provide exemptions from fees/fines registered against licences in regards to practising professions.
01 November 2020 The Supreme Committee tasked with tackling developments resulting from COVID-19 has stated that individuals arriving into Oman from abroad must undergo a PCR test prior to their arrival, and the test must be taken 96 hours prior to arrival.

The same test shall be applicable upon arrival in Oman, as well as a seven-day quarantine. On the eighth day, the individual must undergo another PCR test.
28 October 2020 The Sultanate of Oman has reserved over one million doses of an expected vaccine in relation to COVID-19, upon confirming the safe use of the vaccine on a global level.
21 October 2020 The Supreme Committee tasked with tackling developments resulting from COVID-19 has reaffirmed that the school year in Oman shall begin from 1 November 2020. Additionally, the Committee supports and endorses the Blended Learning system in regards to education, which combines online studies.
14 October 2020 The Tax Authority has announced that it shall provide for an extension of the incentives that have been set for the private sector until the end of 2020, in order to help alleviate the economic impacts of the pandemic on the Omani economy.
09 October 2020 The Supreme Committee tasked with tackling developments resulting from COVID-19 has made four new key decisions as a result of the progression of COVID-19 in Oman:

  1. A lockdown and prohibition of movement shall take place from 8 pm-5 am on 11 October 2020 until 24 October 2020 in all public places and commercial outlets.
  2. All beach access has been banned until further notice.
  3. Some commercial activities will be facing re-closure; the details have not been announced as of yet.
  4. The names and photos of those who have been found in violation of the instructed precautionary measures shall be posted in the media.

05 October 2020 The old Muscat Airport has been transformed to a COVID-19 Field Hospital as of 5 October 2020. The aim behind the establishment of the COVID-19 Field Hospital in the Sultanate is to relieve the pressures that have been placed on hospitals across the Sultanate as a result of the progress of COVID-19.
28 September 2020 The Ministry of Awqaf and Religious Affairs has concluded that it will reach a decision regarding the re-opening of mosques and areas of worship by mid-November 2020, depending on the indications of the COVID-19 Supreme Committee.
27 September 2020 The Ministry of Transport, Communications, and Information Technology has decided to resume public transport services in Oman starting from 27 September 2020. Service will resume in Muscat from 4 October 2020.
22 September 2020 The COVID-19 Supreme Committee has decided to lift the lockdown of the Governorate of Dhofar, to take effect from 1 October 2020. Consequently, the Committee urges both individuals and establishments to abide by the preventive measures in order to ensure the safety of all.

Also, the Committee now permits all individuals holding a valid residency card to return to Oman, provided that they quarantine for a period of 14 days upon return and undergo the PCR laboratory test upon arrival, to take effect from 1 October 2020.
20 September 2020 Oman Air, the national carrier of the Sultanate of Oman, shall return to scheduled services starting from 1 October 2020, with scheduled flights, including both international and domestic flights.
26 August 2020
The Supreme Committee tasked with tackling developments resulting from COVID-19 has permitted further commercial activities, with the requirement that commercial outlets comply with the guidelines issued.
18 August 2020
The Supreme Committee tasked with tackling developments resulting from COVID-19 has permitted further commercial activities, with the requirement that commercial outlets comply with the guidelines issued.
07 August 2020
The Supreme Committee tasked with tackling developments resulting from COVID-19 has lifted the lockdown between governorates in Oman.
30 June 2020 The Supreme Committee tasked with tackling developments resulting from COVID-19 has decided to extend the lockdown in Wilayat Masirah and the Dhofar Governorate until 17 July 2020. Furthermore, the package of incentives supporting private establishments has been extended until the end of September 2020.
24 June 2020 The Royal Oman Police (ROP) has announced that it will be reopening its traffic, passport and residence services starting from 1 July 2020.  
23 June 2020 Pursuant to a Royal Order by His Majesty Sultan Haitham Bin Tarik, interest-free emergency loans shall be made available in order to assist businesses that have been impacted by COVID‑19.
14 June 2020  Pursuant to a Royal Order by His Majesty Sultan Haitham Bin Tarik, a committee has been formed addressing the developments resulting from the coronavirus (COVID‑19) pandemic and its impact (the Coronavirus Economic Impacts Rectification Committee).
10 June 2020 The COVID‑19 Supreme Committee has opened more commercial and industrial activities.
09 June 2020
The COVID‑19 Supreme Committee held a meeting and came to the decision to implement a lockdown on Al Jabal Al Akhdhar, Jabal Shams, Wilayat of Masirah and Dhofar Governorate.
Also, any assemblies, gatherings or tourism activities shall be prohibited from 13 June 2020 until 3 July 2020.
01 June 2020 Muscat Municipality shall waive fines in relation to the non-registration of tenancy contracts, for both residential and commercial properties.  Also, owners of commercial outlets are exempt from paying registration fees for municipal licenses.  Owners of restaurants and cafes are exempt from the payment of the municipality fee.
31 May 2020
The Capital Market Authority (CMA) has announced an initiative in relation to the provision of medical tests and treatment for expatriate individuals with insurance who have tested positive for COVID‑19.  Circular 579/2020 details the instructions that insurance companies are required to comply with:
  • Coverage of costs of medical tests and treatment of insured persons who have been infected with COVID‑19 to the extent of the annual benefit limits of their policies.
  • The adoption of treatment guidelines and a price list that has been approved by the Ministry of Health in relation to the coverage of costs of medical tests and treatments for persons infected with COVID‑19.
  • For insured persons currently receiving treatment in hospitals, the insurance companies shall bear the costs of medical tests and treatments, which shall be enforced from 31 May 2020.
  • Insurance companies are also required to bear the costs of medical services of insured persons who are showing symptoms of COVID‑19.

27 May 2020
The COVID‑19 Supreme Committee held a meeting on 27 May 2020 and issued new decisions.  The Committee urges establishments in the private and public sectors to set out policies and regulations that are aimed at protecting the employees at the establishments, beneficiaries and customers.  No less than 50% of employees shall attend the workplace, which will be implemented from 31 May 2020.
Furthermore, the Committee gives discretion to heads of units and Ministers to set precautionary measures in order to combat the spread of COVID‑19 at the workplace in order to continue the flow and provision of services (applicable to the public sector). 
The Muscat lockdown shall be lifted as of 29 May 2020.
21 May 2020  ROP has issued Decision No. 151/2020 in relation to the criteria and controls in dealing with those found in violation of the decisions issued by the COVID-19 Supreme Committee. The decision states that ROP is responsible for  monitoring the extent in which individuals and public and private sector establishments are in compliance with the decisions issued by the supreme committee. ROP are permitted to stop those that they suspect may be in violation of the decisions and to take the procedure they see necessary with the violators.
18 May 2020 The COVID-19 Supreme Committee has issued the following decisions:
  •           All Eid Al Fitr gatherings are banned.
  • ROP has been entrusted to monitor the commitment, the public sector and the private sector. ROP has the authority to impose fines on those who are held in violation of these decisions. 
  • More commercial activities have been reopened.
  • Everyone is obliged to wear a face masks in commercial outlets, public spaces and all workplaces in both the public and private sector and public transport. 
The Ministry of Finance issued Circular No. 16/2020 in relation to the reduction of ministerial and governmental budgets. This circular comes as a result of the financial measures addressing the slump in oil prices by decreasing spending in order to reduce budget deficit. 
13 May 2020
The Ministry of Finance issued Circular No. 16/2020 in relation to the reduction of ministerial and governmental budgets. This circular comes as a result of the financial measures addressing the slump in oil prices by decreasing spending in order to reduce budget deficit. 
07 May 2020 The COVID-19 Supreme Committee has announced the end of the school year of 2019-2020. 
05 May 2020 The COVID-19 Supreme Committee has stated that the lockdown in Muscat has been extended until 29 May 2020, 10 pm. 
04 May 2020
The Ministry of Commerce and Industry (MOCI) permits the transfer of ownership of commercial registries to be implemented via Sanad offices, advocates offices and auditing offices.

The application is submitted online through the InvestEasy Portal, once the application is reviewed and approved by an MOCI employee, the buyer and seller must visit Knowledge Oasis, 4th Building or departments that are affiliated to the ministry in order to complete the documentation of the application.  
28 April 2020
The COVID-19 Supreme Committee has stated that some commercial activities will be reopened. The list includes:
  •          Vehicle repair workshops.
  •           Fishing boat repair workshops.
  •       Car parts sale shops.
  •           Outlets selling spare parts of fishing equipment.
  •           Outlets selling electronic and electrical appliances and computers.
  •           Outlets repairing home electrical appliances/equipment.
  •           Satellite transmission equipment outlets.
  •           Car rental offices.
  •       Equipment and machinery rent offices.
  •           Sale in outlets specialized in stationary and office supplies.
  •           Printing presses.
  •           Sanad offices.
  •           Quarries and stone crushers.
  •           Money exchange.
      A limit of two customers is to be applied by the following commercial activities:
22 April 2020 The Central Bank of Oman (CBO) issued a circular addressing all banks and finance leasing companies to defer loan instalments by the low-income Omani workforce. This shall be effective for a period of three months from the date the loan is postponed and this will be implemented from May 2020 until further notice.

The repayment of the loans shall be with no interest or any additional fees; also, if seen necessary, the entities must reschedule the loans.
20 April 2020 The COVID-19 Supreme Committee held that Ramadhan gatherings are prohibited, and also emphasised that Taraweeh shall not take place at the mosques. Also, the lockdown on Muscat was extended until 10 am on 8 May 2020.
11 April 2020 The Ministry of Commerce and Industry (MOCI) has instructed commercial centres to adhere to the necessary preventive measures to combat the spread of COVID-19. MOCI further stated that there must be a distance of two metres at all counters and that all surfaces and trolleys must be sanitised. Legal action shall be taken if found in violation.
8 April 2020 The Oman Chamber of Commerce and Industry (OCCI) requested that landlords and the owners of commercial centres take into consideration the impact on their tenants during the ongoing spread of COVID-19. OCCI suggested that this takes place through exemptions, postponement of payments or reduction in rent.

Pursuant to the decisions of the COVID-19 Supreme Committee, Muscat shall be in lockdown from 10 am on 10 April 2020 until 10 am on 22 April 2020. Also, control checkpoints have been put in place to ensure compliance with the lockdown in Muscat.
2 April 2020 The COVID-19 Supreme Committee has stated that Muttrah shall be in lockdown from 2 April 2020.
31 March 2020 After the Royal Oman Police suspended renewal services, the Capital Market Authority (CMA) has requested that insurance companies provide coverage for vehicles with expired licenses until the end of the spread of COVID-19. Also, CMA has instructed that insurance is provided in case of traffic accidents, despite license expiration.

The Tax Institution undertook several procedures in order to mitigate the financial position of tax-governed entities during the spread of COVID-19. These include:
  • Disclosures and tax may be submitted/paid within a period not exceeding three months.
  • Tax may be paid in instalments.
  • The additional 1% of tax in the Tax Law will be waived.
  • In case of objections against modifications by the taxpayer, the objection must take place within a period of 45 days from the date of notification.
  • An additional grace period may be requested by the taxpayer for the submission of documents/clarification.
29 March 2020 During a meeting of the COVID-19 Supreme Committee, it was held that the suspension of all domestic and international flights shall take effect from 29 March 2020 (with the exception of air cargo and Musandam).
24 March 2020 The Ministry of Manpower (MoM) urged companies/establishments not to request that employees who are quarantined go to the workplace as legal action may be taken against them.
23 March 2020 The Telecommunications Regulatory Authority announced that it will allow the use of Skype, Voice Over Internet, Google Meet and Zoom in the Sultanate of Oman.
19 March 2020 The Financial Affairs and Energy Resources Council approved the following:
  • Budget cuts of 5% by ministries, the military and security units, which must be adhered to by the entities.
  • Revision of general spending articles in order to further minimise expenditure.
18 March 2020 The COVID-19 Supreme Committee held a meeting and took the following decisions, to be effective from 18 March 2020:
  • Banning entry to Oman through land, air and sea to Omani nationals only.
  • Omanis are currently suspended from leaving Oman.
  • Closure of all mosques (except for the Athaan).
  • Closure of all non-Muslim worship areas.
  • Suspension of all gatherings, conferences and activities.
  • Closure of all tourist sites.
  • Prohibition of assembling in public areas (including beaches, wadis, mountains, water springs, waterfalls and parks).
  • Closure of all shops in malls (except for those supplying food, pharmacies and optics).
  • Closure of traditional souq/markets (Muttrah, Nizwa, Al Rustaq, Sinaw).
  • Suspension of all weekly fairs/markets.
  • Hotels, restaurants and cafes are prohibited from serving food with the exception of take-aways.
  • Closure of all sports facilities, sports halls, sports courts, health clubs, barbers and salons for both men and women.
CBO issued incentive measures that include accepting deferment requests regarding loan instalments/profit/interest, particularly SMEs, for a period of six months.
17 March 2020 The Competition Protection and Monopoly Prevention Centre has advised all parties against the exploitation of the current global pandemic. The Centre has warned parties that The Law on Protection of Competition and Prevention of Monopoly shall be applied against offenders that are found to be increasing the prices of products that are high in demand as a means of exploitation. Legal action shall be taken through liaising with the relevant regulatory departments.
15 March 2020 The Public Authority for Consumer Protection (PACP) has reaffirmed that it is monitoring and regulating the markets all over Oman. PACP has formed teams in order to regulate the potential increase in prices by suppliers and to ensure the availability of supplies with standard prices.

PACP stated that legal action shall be taken against those that are exploiting the spread of the coronavirus.

The COVID-19 Supreme Committee held a meeting and took the following decisions, to be effective from 17 March 2020:
  • All non-Omanis are banned from entering Oman through land, sea and air, except GCC citizens.
  • Quarantine shall be imposed on all passengers arriving in Oman through land, sea or air (including Omanis).
  • Closure of all parks and play areas.
  • Suspension of Friday prayers.
  • Prohibition of all social gatherings (including weddings and funerals).
12 March 2020 The COVID-19 Supreme Committee was formed by orders from His Majesty and held its first meeting on 12 March 2020. During the meeting, the COVID-19 Supreme Committee took several decisions, to be applied for a period of 30 days:
  1. Stop the issuance of tourist visas.
  2. Suspension of all sports activities.
  3. Prohibition of all external student activities.
  4. Suspension of the entry of all cruise liners in Omani ports.
  5. Court sessions are limited to the concerned parties only.
  6. Banning of shisha at all outlets.
  7. The Committee recommends that travel abroad is limited to cases of emergency.
  8. Preventive measures must be implemented at gatherings and places of worship.
  9. The Committee recommends not going to the cinema frequently.

COVID-19 Updates: Private Sector (2)
Date Updates
10 May 2020
The Ministry of Manpower has urged the private sector to request their employees to go for a screening for the Coronavirus in the case that any employee is displaying symptoms. 
15 April 2020 A package of incentives has been announced in order to provide support to the private sector to enhance its ability to adjust to the conditions imposed as a result of COVID-19.
  • Private sector establishments are not permitted to terminate the Omani workforce and must maintain their stability.
  • The private sector is required to reconstruct their systems to enable them to function during the spread of the coronavirus.
  • Use of technology is urged as it allows employees to work remotely.
  • Safety measures must be taken to ensure that there is enough space between the employees at the workplace.
  • Employees that are quarantined are entitled to their salaries, as long as they provide a certificate for the end of their quarantine.
  • Private sector establishments that have shut down as a result of COVID-19 may offer advanced annual paid leave for the workers.
  • Companies in the private sector that have been affected by COVID-19 may negotiate a reduction in the salaries of employees for a period of three months in exchange for reduced working hours; this is applicable after an employee’s outstanding paid leave has been exhausted.
  • For companies in the private sector that have shut down as a result of COVID-19, the company is entitled to grant annual paid leave to the workers, to be implemented from May 2020, if seen necessary.
  • For the Omani workforce facing a reduction in their salaries, their bank and financing loans shall be postponed, the loans are to be paid back after rescheduling, and will be paid back with no interest or additional fees; also, their water and electricity bills shall be postponed until June 2020.
Non-Omani Workers
  • In relation to the non-Omani workforce, the private sector may terminate contracts with non-Omani workers if the company has been affected by COVID-19 and provided that the company adheres to all its payments due to the employees prior to their departure from Oman.
  • If the establishment has shut down, the employee’s annual leave may be paid in full advance.
Incentives Offered by the Government to the Private Sector:
  • There will be a reduction in the renewal fees of labour cards from OMR 301 to OMR 201 for expatriate workers.
  • Fees and delayed fines shall be exempt.
  • Extension of MoM expat licenses.
  • Temporary approval and provision of preliminary work permits to expats.
  • In case of an emergency, secondment of workers from the private sector for another entity may take place.
MOCI Incentives for the Private Sector:
  • MOCI is offering exemptions for the payment of fees for the renewal of Commercial Registrations from 15 April 2020 until late June 2020.
  • MOCI has also stated that public sector companies shall abide by their contracts with the private sector in the field of services.
  • SMEs that have been affected by COVID-19 may pay water and electricity bills in instalments or postpone payments for a period of three months.
  • Exemptions shall be provided for the renewal fees of licenses and fines for a three-month period for governmental units.
  • Exemptions and flexibility measures shall be offered to government projects that have been completed.
  • The Public Authority for Social Insurance shall postpone subscription fees for the months of March, April and May. These may be paid in instalments.
Water and Power Sector:
  • For establishments in the private sector that have been affected by COVID-19, they may postpone the payment for water and electricity for a period of three months.
  • SMEs may pay in instalments.
  • Workers facing a reduction in their salaries shall be given National Fuel Subsidy Cards.
1 April 2020 MoM has stated that establishments in the private sector are required to take the steps they see necessary in order to decrease the number of employees at the workplace to the minimum, without impacting business performance.
31 March 2020 The private sector establishments are required to decrease the number of employees to a minimum and should also put in place necessary preventative measures. These measures take effect from 1 April 2020.
24 March 2020 MoM has requested that companies in the private sector inform their employees to not go out during holidays and weekends and to stay home. The employees must be told in all applicable languages to avoid any language barriers. MoM stressed that all labour gatherings shall face legal action.

COVID-19 Updates: Public Sector (3)
Date Updates
02 June 2020 The Ministry of Finance has issued Financial Circular 17/2020.  The circular applies to the governmental sector and it states that the status of retirement shall be applied to all employees who are over 60 years of age. An extension of employment shall not be permitted unless deemed necessary within limited parameters.
31 March 2020 The COVID-19 Supreme Committee held that for those working in the public sector, employees are not required to go to the office and should work remotely except for employees whose nature of works requires their physical presence.

The heads of governmental departments/units are required to ensure that standard procedures are not impacted by the downsizing of workforce and must also put in place necessary preventive measures.

The above is enforced from 1 April 2020.
23 March 2020 The COVID-19 Supreme Committee has taken a decision to limit the number of employees in the public sector to only 30%, enough to provide their services and for the remaining employees to work remotely.

COVID-19 Updates: Annual General Meetings (4)
Date Updates
05 May 2020
MOCI has issued rules on convening general meetings for closed joint stock companies (SAOC) via Ministerial Decision 65/2020.
26 April 2020 The Muscat Clearing Depository (MCD) issued Circular 2/20200F detailing the user manual for electronic AGM-EGM management services for public joint stock companies and investment funds; EAGM.
20 April 2020 The CMA has announced that annual general meetings of SAOGs and investment funds shall be resumed through an electronic portal of MCD. The rules include the following:
  • Attendance and voting shall take place through an electronic portal.
  • MCD shall administer the electronic portal and will send the agenda to the shareholders.
  • Board of director nomination forms shall be submitted five days before the date of the meeting.
  • For an elected board member, the company shall be required to provide his CV through the Muscat Securities Market (MSM) website three days before the date of the meeting.
  • Shareholders are entitled to vote through the electronic portal three days before the date of the meeting.
  • All voting shall remain confidential until the meeting.
  • Authorisation of the shareholder may be cancelled only 24 hours prior to starting the meeting.
  • Quorum: this will be counted when the shareholder activates the general meeting’s page when the meeting begins. Also, those who have voted during the three days prior to the date of the meeting shall be included in the quorum.
  • A time period not exceeding five minutes for voting on each item, except for the items in relation to the election of board directors which shall be given a time period not exceeding ten minutes.
  • Under the current circumstances, the publication of the agenda shall take place ten days prior to the meeting.
  • If there is a reduction in a shareholder’s balance, his voting prior to the meeting shall be void. He may vote again.
  • If a proposal in the agenda is changed, the voting of the shareholder shall remain valid unless the shareholder changes his vote on the day of the meeting.
18 March 2020 CMA issued Circular 3/2020 addressing all public joint stock companies and investment funds to suspend AGMs until further notice. The CMA also issued Circular 4/2020 approving the dividends set out in the agendas to shareholders.
17 March 2020 MOCI extended the time period for Annual General Meetings to take place for Closed Joint Stock Companies (SAOC) until June 2020. In addition, MOCI has announced the suspension of all exhibitions, seminars and conferences until June 2020.
16 March 2020 CMA extended the time period for convening AGMs until 30 April 2020 rather than 30 March 2020. For companies that wish to postpone the convening of the AGM, this must be disclosed on the MSM website.

CMA instructs all public joint stock companies, legal advisors and auditors to adhere to the preventative measures in order to prevent the spread of the coronavirus during AGMs.

Circular 1/2020 includes a list of the preventive measures that must be taken by the companies that still wish to convene their AGMs, including limiting the attendees of the meetings to stakeholders and shareholders only; providing sanitisers; avoiding handshaking during the meetings; and limiting the time of the meeting. Also, shareholders have been urged to only ask questions that are directly related to the matters discussed at the meeting.


Wednesday, April 8, 2020

Considering Dispute Resolution Clauses in Oman Part 1: Courts or Arbitration

Often, when parties enter into a new agreement, the dispute resolution clause is not considered as carefully as other important terms of the contract.  There are numerous considerations that, depending on the context, both parties should bear in mind when drafting their dispute resolution clause.  This series of articles will take a look at a number of these considerations in the context of entering into contracts in Oman.
This first article considers the issue of whether parties should choose courts or arbitration to determine their disputes.  Some of the main considerations are as follows.
If parties decide that their dispute will be resolved by the Omani courts, the following will apply:
  • Proceedings will be held in Arabic.
  • Parties will have several rights of appeal of decisions.
  • The costs paid to the court will be much lower than costs paid to a tribunal.
  • A court decision will be enforceable in Oman as well as other countries that are party to the Riyadh Convention on Judicial Cooperation 1983.[1]
If parties choose arbitration to resolve their disputes, some of the key characteristics are as follows:
  • Proceedings will be held in the language agreed to by the parties, which is often English.
  • There is no right of appeal; however, an application will need to be submitted to the court to have the award enforced, even if the arbitration is held in Oman and subsequently enforced in Oman.
  • There are higher administrative costs related to arbitrations; however, a tribunal has the authority to award the successful party these costs, though it is not certain that a successful party will have all of its costs paid.
  • An award is enforceable in the 161 countries that are party to the New York Convention.
Building on the points above, parties will need to consider many factors when deciding what type of dispute resolution mechanism they will choose.  If contracting with a counterparty that has little assets in Oman but significant assets in other countries, it will be critical that any award or decision can be enforced against the counterparty; therefore, where an award or judgment is going to be enforced also needs to be taken into consideration when choosing a dispute resolution mechanism.
Another key consideration is that the process in arbitration and in courts can be very different.  In Oman, all submissions are made through documents rather than through oral arguments and witness testimony.  If parties choose arbitration rather than courts, the parties will determine with the arbitrator what the arbitral process will entail, often a more common law style of proceeding with oral arguments and oral witness testimony being adopted.  However, some arbitrations, particularly those where the parties choose Arabic as the language of the arbitration, more often follow the procedures of Omani courts.
Overall it can be said that depending on the nature of the dealings between the parties as well as any potential dispute that may arise will determine whether courts or arbitration is most appropriate.  Unfortunately, it will not be possible for parties to opt for courts or arbitration at the time a dispute arises; therefore, careful consideration of a number of factors must be weighed up at the time of entering into a contract when deciding what dispute resolution mechanism the parties should choose.

[1]  Algeria, Bahrain, Djibouti, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, UAE, Yemen.