International Arbitration

The relevant legislation on arbitration in Oman is the Arbitration Law, issued by Royal Decree 47/1997 and amended by Royal Decree 3/2007. There are no significant limitations to the scope of the statutory regime. However, under Omani law, an arbitration agreement must be executed in writing. Oral arbitration agreements are not recognised in Oman. The written arbitration agreement must be quoted in any arbitral award as a condition for its validity and enforceability.

Omani law differentiates between domestic and international arbitration. Article 3 of the Arbitration Law provides that the arbitration will be considered international if:

• the subject of the dispute relates to international trade; and
• the parties have their principal place of business in two different countries.

The rules governing domestic and international arbitrations are essentially the same, except for some rules that address specific jurisdiction issues.

Yes, the Arbitration Law is predominantly based on the UNCITRAL Model Law. However, there are certain differences between the two instruments, including in relation to interim measures and preliminary orders. For example, the UNCITRAL Model Law:

• does not specify a timeframe for the issuance of the award; and
• requires the arbitral tribunal to comply with any filing or registration requirements within the timeframe mandated by the law of the country in which the award is made.

By contrast, the Arbitration Law provides that arbitral awards must be issued within 12months of the commencement of arbitration, unless:

• the parties have agreed otherwise; or
• the court grants an extension at the request of one of the parties.

The arbitral tribunal has limited power to extend the period allowed for the issuance of a final award by a maximum of six months.

The Arbitration Law follows the concept of Sultan Aleradah, or ‘power of will’. Most of its provisions begin with or contain the proviso: “Unless otherwise agreed by the parties.” The Arbitration Law allows the parties to agree on the adoption of different arbitration rules, such as those of international arbitration centres – for example:

• the International Chamber of Commerce;
• the London Court of International Arbitration; or
• the International Center for the Settlement of Investment Disputes.

We are not aware of any plans to amend the arbitration legislation in Oman.

Oman ratified the New York Convention through Royal Decree 36/1998 without any reservations to the general obligations under the convention.

Oman is a signatory to several arbitration-related treaties, including:

• the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965;
• the Riyadh Arab Agreement for Judicial Cooperation 1983;
• the Gulf Cooperation Council Convention for the Execution of Judgments, Delegations and Judicial Notifications 1987;
• the Hague Convention for the Pacific Settlement of International Disputes 1907; and
• Arbitration under the Organisation of the Islamic Conference Investment Agreement.

Under Omani law, disputes involving the following issues cannot be the subject of arbitration:

• matters which are incapable of reconciliation;
• public order matters (eg, criminal matters);
• tax matters; and
• labour matters.

There are no restrictions on the choice of seat of arbitration or institution.

In order for an arbitration agreement to be considered valid, it must be executed in writing. This means that the contents of the agreement must be recorded in any form. Additionally, if an arbitration clause is mentioned in a contract and is made part of that contract through a reference to another document, this will be considered to constitute a written arbitration agreement.

Article 23 of the Arbitration Law provides for the separability of arbitration agreements. Under this provision, an arbitration agreement is considered as an independent agreement separate from the other conditions of the contract; and the nullity, recission or termination of the contract will have no effect on the arbitration clause contained in the contract as long as the clause is itself correct.

If the parties fail to agree on the place of arbitration, the arbitral tribunal may determine the place of arbitration, taking into account:

• the circumstances of the case; and
• the suitability of the place for the parties.

As for the language, the arbitration will be conducted in Arabic unless:

• the parties have agreed otherwise; or
• the tribunal determines that the proceedings should be conducted in another language or languages.

Any party that objects to the jurisdiction of the tribunal must submit a plea of objection by no later than the deadline for submission of the defence by the respondent. Accordingly, the tribunal will either:

• decide on the plea of objection before making any decision on the subject matter of the dispute; or
• join the plea of objection to the subject matter of the dispute and decide on both matters together.

The arbitral tribunal has the authority to decide on pleas relating to its jurisdiction, including those based on:

• the non-existence, invalidity or annulment of the arbitration agreement; or
• the irrelevance of the arbitration agreement to the subject of the dispute.

Such pleas must be made by the deadline for submission of the defence by the respondent, as stated in Article 22 of the Arbitration Law.

Any plea relating to the jurisdiction (or lack thereof) of the tribunal will be resolved by the tribunal itself. However, if the tribunal dismisses the plea, the applicant may, once the final award has been issued, file a suit for nullification of the arbitral award on the basis of its plea.

Under Omani law, only natural or legal persons with the legal capacity to exercise their rights may enter into arbitration agreements. Further, any disputes that cannot be resolved through reconciliation are not eligible for arbitration.

The parties usually have the freedom to determine the duties and standards that will be enforced. However, arbitration institutions will mandate certain requirements that must be adhered to, such as codes of conduct that apply to all arbitrations administered by them.

Although the Arbitration Law lacks explicit provisions on multi-party arbitration or the inclusion of third parties through joinder or intervention, these steps are feasible within the framework of arbitration, as this is a private dispute resolution method. In such cases, the parties can engage in multi-party arbitration, provided that all parties involved have mutually consented to this approach.

Under the Arbitration Law, the parties can decide on the law that will govern the subject matter of the arbitration. If no agreement is reached between the parties on the applicable law, the tribunal has the discretion to apply any law it deems appropriate to the subject matter of the dispute after reviewing the provisions of that law.

In terms of substantive law, the tribunal will uphold any agreement between the parties. If there is uncertainty as to the applicable substantive law or if the parties have not decided which law should apply, the tribunal will apply the substantive law determined by the conflict of laws rules that it considers to be relevant.

The Arbitration Law has no specific provisions on the consolidation of separate arbitration proceedings. Nevertheless, as arbitration is a private dispute resolution method, there appears to be no inherent prohibition against the consolidation of arbitration proceedings.

As the Arbitration Law does not explicitly regulate consolidation, there are no predefined conditions in this regard. However, in the case of institutional arbitration, the rules of the relevant institution will apply accordingly.

The Arbitration Law lacks explicit provisions on the inclusion of additional parties. Article 117 of the Civil and Commercial Procedure Law (Royal Decree 29/2002), which governs the inclusion of parties in judicial proceedings, outlines the essential conditions, stipulating that a party’s presence is necessary to resolve the underlying dispute.

However, as arbitration is a private dispute resolution mechanism, the consent of all parties involved and the approval of the arbitration tribunal are essential prerequisites before a party can be added to the arbitration proceedings.

The Arbitration Law does not specifically cover this issue. When it comes to assignees, whether the arbitration agreement binds them will depend on the precise language used both in the arbitration agreement itself and in the assignment agreement. As for third parties, as arbitration is a private dispute resolution method, third parties generally cannot be compelled to participate without their explicit consent.

Typically, the selection of arbitrators adheres to the procedure outlined in the arbitration agreement, as mutually agreed upon by the parties. However, if a deadlock arises on the appointment of a sole arbitrator, the court will step in to appoint one. Likewise, the court will intervene to designate an arbitrator if:

• a party fails to nominate its co-arbitrator; or
• the co-arbitrators are unable to reach a consensus on the choice of a chairperson.

The number of arbitrators should always be an odd number. The parties can decide on the number of arbitrators; otherwise, Article 15 of the Arbitration Law dictates that the number of arbitrators will default to three.

There are no specific qualifications mandated for arbitrators. Any natural person is eligible to serve as an arbitrator, with the following exceptions:

• minors;
• persons with a felony or misdemeanour conviction relating to moral turpitude or dishonesty; and
• persons that have been declared bankrupt.

There are no requirements relating to nationality or gender, unless the parties have mutually consented to such criteria.

As a general rule, the appointment of an arbitrator can be challenged only if there are circumstances that raise serious doubts and suspicions about the arbitrator’s independence and impartiality.

If a party has nominated an arbitrator or has been involved in the arbitration nomination process, that party cannot seek the removal of the arbitrator unless it can prove that the circumstances causing serious doubts and suspicions regarding the arbitrator’s independence and impartiality were not known to it at the time of the nomination and were only discovered later.

Furthermore, parties can request the court to remove an arbitrator if the arbitrator is not diligently fulfilling his or her duties.

Where an arbitrator’s assignment ends due to dismissal, resignation, recusal or any other cause, a replacement will be designated following the same procedure as was initially employed for the selection/nomination of the arbitrator whose assignment has now concluded.

The overarching obligation of impartiality is enshrined in Article 16(1) of the Arbitration Law. Furthermore:

• Article 20 prescribes that arbitrators must conduct themselves diligently; and
• Article 45 subjects arbitrators to a duty to expedite the arbitration process, typically requiring its conclusion within 12 months from commencement unless the parties have mutually agreed on a different timeline.

(a) Procedure, including evidence?

The parties can determine the procedure to be followed by mutual agreement. If the parties are unable to reach agreement on the procedure, the arbitral tribunal will select the procedure that it deems most suitable, taking into account the provisions of the Arbitration Law.

With regard to the presentation of evidence, Article 37 of the Arbitration Law grants the arbitral tribunal the authority to ask the president of the relevant court of appeal to impose a fine on an individual who fails to attend as a witness. However, the court does not have the authority to compel an appearance before the arbitral tribunal.

(b) Interim relief?

Under Article 24(1) of the Arbitration Law, the parties to arbitration may grant powers to the arbitral tribunal to order such temporary or preventive measures as the nature of the dispute may require.

(c) Parties which do not comply with its orders?

According to Article 24(2) of the Arbitration Law, if the party to which an order is directed does not adhere to or execute it, the tribunal, on the other party’s request, can authorise the requesting party to take the necessary steps to enforce the order. This authorisation is without prejudice to the requesting party’s right to seek court assistance in enforcing the order.

(d) Issuing partial final awards?

Article 42 of the Arbitration Law allows the arbitral tribunal to issue a partial award before making its final award in the dispute.

(e) The remedies it can grant in a final award?

The arbitral tribunal can grant a range of remedies in the final award, which may include, among other things:

• damages;
• specific performance;
• declaration of rights;
• restitution;
• interest;
• costs;
• arbitrators’ fees; and
• penalties or liquidated damages.

In awarding any remedy, the arbitral tribunal must stay within the boundaries defined by the arbitration agreement. Exceeding these limits could potentially lead to the annulment of the award under Article 53 of the Arbitration Law.

(f) Interest?

The Arbitration Law includes no provisions on interest and there are thus no limitations on the award of interest. The arbitral tribunal can award daily interest on the granted sum, both before and after the award is issued. The Ministry of Commerce, Industry and Investment Promotion has established a 6% interest rate for commercial debts.

No party involved in arbitration should obstruct the proceedings by abstaining from participation. If non-participation occurs during the selection or appointment of arbitrators, the courts can designate the arbitrator or co-arbitrator. If a party fails to attend after the arbitral tribunal has been established, the tribunal may continue the proceedings based on the available documents and evidence and render an award accordingly.

The Arbitration Law and other relevant royal decrees do not afford the arbitrators statutory immunity. Nevertheless, in practice, issues relating to the liability of arbitrators are typically addressed within the terms of reference.

Yes, the courts typically follow the principle of enforcing arbitration agreements. If a valid and enforceable arbitration agreement exists between the parties and one party initiates court proceedings relating to a dispute which is covered by that agreement, the Omani court is likely to stay the proceedings and refer the parties to arbitration.

The Omani courts have specific powers in the context of arbitration seated in Oman. Their role is generally one of limited involvement, primarily geared towards providing assistance and supervision. The Omani courts may intervene in Oman-seated arbitrations under the following circumstances:

• Stay of legal proceedings: The Omani courts can halt ongoing court proceedings where a valid arbitration agreement is in place.
• Temporary or preventive measures: The Omani courts may grant temporary or preventive measures to maintain the status quo during arbitration.
• Appointment of the arbitral tribunal: The Omani courts can assist in the appointment of the arbitral tribunal if the parties encounter difficulties in this regard.
• Violations of arbitral procedure: The Omani courts may intervene when there are violations of the agreed arbitral procedure.
• Challenge to the tribunal’s jurisdiction: If there are challenges to the jurisdiction of the arbitral tribunal, the Omani courts can address these issues.
• The tribunal’s inability to perform or neglect: The Omani courts can step in if tasks become impossible to perform or if the arbitral tribunal fails to fulfil its duties.
• Non-attendance of witnesses: The Omani courts may take action if a witness fails to attend as ordered by the tribunal.
• Delayed issuance of the arbitral award: If the tribunal does not issue an award within the agreed timeframe, the Omani courts can intervene.

However, the Omani courts lack jurisdiction or authority to intervene in arbitrations seated outside Oman.

This question is not expressly addressed by the Arbitration Law. However, given that the powers of the court are of an oversight nature, with the primary aim of resolving deadlocks, any exclusion of the court’s powers by way of agreement will be void. Hence, the authority of the court to issue precautionary measures, extend the time for issuance of an award or nullify an award cannot be waived or excluded through any form of agreement.

The Arbitration Law does not specifically address the issue of costs, so the Procedure Law comes into play in this regard.

According to Article 183 of the Procedure Law, the default position is for the arbitral tribunal to award costs to the prevailing party. However, Articles 184 and 185 of the Procedure Law provide flexibility for the tribunal to deviate from the default practice and may require the winning party to cover the costs of the losing party if the winning party has:

• incurred unnecessary expenses; or
• withheld vital documents or information from its opponent.

Similarly, in case of partial success, the tribunal may instruct each party to bear its own costs.

In an arbitration seated in Oman, there are no limitations on what the parties can mutually agree upon with regard to costs. Therefore, the parties are free to include such terms either within the arbitration agreement or in the terms of reference.

There is no prohibition on third-party funding in Oman; but equally, no specific provisions explicitly govern third-party funding in Oman.

Procedural requirements: The final arbitration award must be in writing and bear the signatures of the arbitrators. In the case of a panel of arbitrators, the majority should sign it and the reasons for any missing signatures must be documented. Furthermore, the final award must include the following elements:

• the names and addresses of the disputing parties;
• the names, nationalities, capacities and addresses of the arbitrators;
• the text of the arbitration agreement;
• a summary of the claims presented by the parties, along with their submissions and supporting documents; and
• the date on which and place where the award was issued.

Substantive requirements: The final award should:

• resolve the dispute in its entirety; and
• provide clear reasoning for the decision.

The final arbitral award should be issued within the timeframe agreed between the parties. In the absence of such agreement, the award should be issued within 12 months of the date on which the arbitration commenced (ie, the date on which the respondent received the arbitration notice). In both circumstances, the arbitral tribunal can extend this period by six months; any further extension requires the consent of both parties.

Arbitral awards are capable of being enforced in Oman. The winning party can seek enforcement from the appropriate court once the period during which proceedings to challenge the award can be initiated has elapsed.

Under Article 53.1 of the Arbitration Law, an arbitral award can be challenged and declared invalid on any of the following specific grounds:

• There was no arbitration agreement, or the arbitration agreement has been or may be found void;
• A party lacked the capacity or competence to enter into an arbitration agreement;
• A party was unable to present its case due to inadequate notification of the appointment of the arbitrators or the commencement of the arbitration process, or for reasons beyond its control;
• The governing law as chosen by the parties in the arbitration agreement was ignored;
• The arbitral tribunal was constituted or the arbitrators were appointed in violation of the law or the parties’ agreement;
• The award resolves issues beyond the scope of the arbitration agreement or that exceed the limits of the agreement. However, if it is possible to separate those parts that exceed the scope of the agreement from the remainder of the award, the annulment will affect those parts only; or
• The arbitral award is void because it conflicts with Omani law or because its terms are affected by the voidness of the arbitration proceedings.

Article 53.2 of the Arbitration Law provides an additional basis for annulment. Specifically, it allows the court, when reviewing a request for annulment, to annul an arbitral award on its own accord if the award contains any provisions or elements that contravene Omani public policy.

A challenge for invalidity must be submitted to the competent court within 90 days of the date on which the parties are notified of the award.

Under Article 54.1 of the Arbitration Law, any waivers that restrict the right to challenge are not legally binding and cannot be enforced.

The Arbitration Law does not explicitly address confidentiality matters. Nonetheless, Article 44.2 stipulates that an award or any portion thereof should not be disclosed publicly without the consent of the parties.

Additionally, the principles on maintaining confidentiality in judicial proceedings and discussions, as indicated in Article 163 of the Procedure Law, can be applied by analogy to the arbitral tribunal.

Furthermore, Article 36 of the Advocacy Law prohibits lawyers from divulging any client information.

No, but the information provided to the arbitral tribunal may be utilised in subsequent proceedings involving the same parties.