Public Prosecution Investigations and Criminal Complaints within the Commercial Context

In Oman, corporations may find themselves involved in commercial disputes that end up in arbitration or litigation. Within that context, it is not unusual to find that a party in those disputes has chosen to separately lodge a criminal complaint at the Royal Oman Police (“ROP”). The supposed rationale behind such an action is that a criminal complaint may place commercial pressure on another party and could lead to a settlement within the commercial dispute.

However, what makes the above scenario slightly unusual is that, pursuant to the Omani Penal Code, crimes in Oman are treated as strictly personal. As such, corporate entities – faceless abstract giants as they are – cannot be named as the accused. To be rendered valid, a criminal complaint must be lodged against an individual employed by the corporation in question and not against the corporation itself. Sadly, to what extent a named particular individual is personally responsible for the grievance for which they are charged is less important than the extent of their proximity to that grievance.

To this end, the ROP and Public Prosecutor are tasked with ascertaining which person or persons are closest to the crime at hand. The Public Prosecutor is the pivotal figure in cases of this nature. He/she holds the power to decide whether or not the complaint brought forward against a corporate entity can be filed as a criminal court case. In effect, the Public Prosecutor exercises his/her discretion. Whilst they are meant to identify the face of the corporate entity, they can elect to name any employee they so deem as being a person of interest. For example, if an individual is injured at a playground due to a faulty slide, the criminal investigation could be against the maintenance manager of the playground apparatus.

The Public Prosecutor and ROP may move to confiscate travel documents at an early stage. Even though the legal system is known to operate in a more flexible manner, ample precedent exists for seizing travel documents. Passports may be taken early on during investigations to curtail all movements of the accused until a decision is reached.

The matter becomes even more convoluted when the accused is not an Omani citizen. Expatriates can find themselves embroiled within a criminal judicial system that they do not understand and that causes them great anguish. This can be especially crippling for the accused. It then becomes vital for a lawyer to conduct an exhaustive investigation of the case at hand and carry out a methodical examination of the known facts. Documentary evidence, witness statements and third-party reports are often painstakingly obtained to protect a client’s interests, and ultimately to procure their freedom.

Expatriates often make the mistake of assuming that legal principles such as “burden of proof” and “innocent until proven guilty” apply within Oman. As stated earlier, the Omani legal system is far more fluid. Accordingly, a crime usually has to be proven beyond a measure of a doubt before any punishment is meted out to the accused on behalf of his/her employer. In practice, this is not always followed through, making any outcome difficult to predict in advance. However, an appeal system exists so as to offer an opportunity to remedy miscarriages of justice.

From a practical perspective, the procedural timeline with regards to a criminal complaint within a commercial setting is as below:

1. A criminal complaint is made to the ROP or the Public Prosecutor against an individual attached to a company.

2. The ROP/Public Prosecutor carries out his/her own investigation of the complaint and decides whether the individual is the appropriate person to be investigated. This step may involve inviting the individual to attend an interview. The individual MUST attend. Failure to attend may result in an arrest warrant being issued and/or a travel ban being imposed. The Public Prosecutor may allow the individual to be accompanied by a lawyer or may refuse to do so.

3. The Public Prosecutor documents the investigation and decides whether to file a criminal case with the Primary Court or not.

4. If there is to be no criminal case, the ROP/Public Prosecutor will inform the individual and may keep the file open. However, no further action would be taken at this stage.

5. The entity which reported the complaint has a mechanism whereby it can seek to have the decision not to proceed overturned. This would be by way of an ex parte application to the Appeal Court asking the Court to look into the decision and explaining why the decision is wrong. The Appeal Court can then provide an order to the ROP/Public Prosecutor to continue investigating or to investigate in a different manner or to file a criminal case.

6. If there is to be a criminal case, the individual may need representations being made for bail and evidence must be gathered quickly.

7. Expert and witness testimony must be examined immediately as the case must be rigorously defended.

As can be seen, lawyers play a critical role in relation to Public Prosecution investigations and criminal complaints within the commercial context. It is vital to engage the assistance of a lawyer from the outset so that all matters can be dealt with expeditiously and so that all avenues are explored with the client early on.

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Courts versus Arbitration

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There is often a lack of understanding about how Oman’s Arbitration Law (Royal Decree 47/97 as amended) works. The truth is that this law provides a viable alternative to having a dispute heard by the Omani courts.

The fundamental difference between the Omani court system as opposed to the Omani arbitration system is that an Omani court case may go through three tiers of justice (Primary, Appeal and Supreme), whereas an arbitral award is final, with no right of appeal, and it is extremely unlikely that the Omani Courts would nullify an arbitral award. This means that almost certainly an arbitral award will lead to the end of the dispute, without any ability to appeal or overturn the arbitral award.

The best time to agree on arbitration is in the contract at the start of the relationship with your counter-party. For instance, if party A desired to have any dispute heard by an arbitral panel, using Omani Arbitration Law as the procedure for such arbitration, it is best for the contract to state: “Any dispute will be finally settled via arbitration in accordance with Omani Arbitration Law (Royal Decree 47/97 as amended).”

However, the above clause can be further fine-tuned to states how many arbitrators will be on the arbitral panel. Article 15 of Oman’s Arbitration Law states that if the parties have not agreed on the number of arbitrators, the number of them will be three. Accordingly, if the parties wanted a sole arbitrator to hear any dispute, they should say so in the contract.

It is worth bearing in mind that with a panel of three arbitrators, a majority 2-1 decision is sufficient, unless the parties had agreed otherwise in writing before the commencement of the arbitration.

Article 17 states that the Court would decide the identity of the sole arbitrator, if the parties cannot agree on whom it should be. If the panel is to consist of three arbitrators, one party states his nominee as arbitrator, and the other party must then state his nominated arbitrator within the following 30 days. The two arbitrators thus chosen should select a third arbitrator within 30 days after the nomination of the second arbitrator. However, either party can apply to Court if these 30 day deadlines are breached.

An important part of the Omani Arbitration Law is what it states about the time procedural framework for an arbitration case. It is often forgotten that Article 27 says that – unless the parties have agreed otherwise - the arbitration clock starts ticking on the day the defendant receives a letter from the claimant stating that a dispute exists and that, as per the contract, it must be resolved via the agreed arbitration procedures. Article 45 requires that the arbitral award must be forthcoming within 18 months after the clock started to tick, unless the arbitral panel and the parties agree otherwise.

Another salient aspect of Omani arbitration is that the arbitral panel can appoint one expert or more to present a written or verbal report. The Law states that the parties will be afforded the opportunity to present their views on the expert reports. In addition, each party has the right to examine the documentation upon which the expert based his report. The parties are also granted the right to bring their own experts to an arbitral hearing, to present their views on the contents of the reports prepared by the expert appointed by the arbitral panel.

As mentioned at the start of this article, an arbitral award should be viewed as final as there are no rights of appeal and very limited scenarios where an application can be made to the Omani courts to try to have the arbitral award nullified. To the best of my knowledge, the Oman courts have never nullified an Omani arbitral award.

What, then, drives certain parties to agree in their contract to arbitration? The decision may be due to enforceability issues or due to a desire to have the dispute heard by specific arbitrators. The time frame is perhaps also more certain in arbitration as compared with Omani court cases. But weighing up the advantages and disadvantages of the courts as opposed to arbitration is always a complex matter which can only be determined after careful legal study of the specific facts in question at the time of contract preparation.

-James Harbirdge, Partner (Oman)

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